Organisational Behaviour - Fayol's Administrative Management Theory

Henry Fayol (1841-1925) was a French management theorist. He developed Administrative theory of management and wrote the book "General and Industrial Administration". This theory is also known as Fayolism. He developed 14 principles that can be used by management to coordinate the internal (administrative) activities of an organisation. Other theorists who contributed to to administrative management theory were James D. Mooney, Sheldon, Urwick, Luther H. Gulick.

Fayol's functions of management:

1. Planning
2. Organising
3. Commanding
4. Coordinationg and
5. Controling

Fayol classified business operations into six major activities:

1. Technical
2. Commercial
3. Financial
4. Security
5. Accounting and
6. Managerial

Fayol's 14 Principles of Management:

1. Division of work: Work of all kind must be divided and subdivided and then allotted to various persons according to their expertise in a particular area. Specialisation leads to efficiency and economy in business.
2. Authority: Authority and responsibility comes together. Managers must be given authority for performing tasks.
3. Discipline: Discipline means sincerity, obedience, respect of authority and observance of rules and regulations of the enterprise. It can be enforced by the effective leadership and punishment can be applied judiciously whenever required.
4. Unity of command: Subordinates should receive orders from only one superior at a time and they should be accountable to their orders only.
5. Unity of direction: There should be one plan for activities having similar objectives and these activities should be grouped together. They should also be under the command of a particular manager.
6. Equity: Managers should be fair and impartial while dealing with the subordinates.
7. Order: There should be systematic arrangement of things and people in the organisation.
8. Subordination of individual interest to the general interest: There should be harmony between individual and organisation's interests. Organisation's interest should prevail over individual interest.
9. Remuneration: Remuneration paid to the employees should be fair, reasonable, satisfactory and rewarding to the efforts.
10. Centralisation and decentralisation: Centralisation is concentration of power to the management and decentralisation is disseminionation of power to subordinates. Degree of centralisation and decentralisation depends on size of business, experience of superiors, dependability and ability of subordinates, etc.
11. Scalar Chain: It is the chain of authority from top most level to the lowest level. Normally communication is done following the chain of authority. But if there is urgency communication should be done directly between the sender and ultimate receiver cutting short the chain of authority which is known as Gang Plank.
12 Stability of Tenure: Tenure of employee at a particular job should be fixed so that he get used to that work and become efficient at it which will increase quality as well as quantity of his work.
13. Initiative: Management should provide healthy environment to his employees to take initiative, suggest ideas, experiences and new and improved methods of performing jobs. Monetary and non monetary incentives can be useful in this.
14. Espirit De' Corps: Encouraging team spirit, understanding, and trust among work groups helps them to perform better and they offer their best towards the organisation.