Evolution of Management Thought

EVOLUTION OF
MANAGEMENT THOUGHT
HENRY FAYOL’S ADMINISTRATIVE MANAGEMENT
Who was Henry Fayol?
 Henri Fayol developed the Administrative Management Theory. He

was born in Istanbul in 1841. At the age of 19, he started to work as an
engineer at a mining company located in France. Eventually, he was
appointed as the director of the company when the company employed
1,000+ people.
 During these years, he started developing the 14 key principles of
management. These principles explained the ways in which managers
should interact and organize the staffs.
What Is Administrative Theory?
• Henry Fayol’s Administrative Management Theory is said as one of the

earliest management theories.
• It is also one of the most important management theories. With these
Principles of Management and primary functions of management, he
is now considered as one of the most influential contributors in the
field of modern concept of management.
Fayol’s 14 principles of Management
1. Division of Work – Assign each employee a task that they can
become proficient at. Productivity increases as employees become
more skilled, assured and efficient.
2. Authority – Managers must possess the authority to give orders, and

recognize that with authority comes responsibility.
3. Discipline – Everyone should follow the rules. To help, you can

make agreements between the organization and employees clear for
all to see.
4. Unity of Command – Fayol wrote that "an employee should receive orders
from one supervisor only." Otherwise, authority, discipline, order, and
stability are threatened.
5. Unity of Direction – Teams with the same objective should be working

under the direction of one manager, using one plan.
6. Collective Interest Over Individual Interest – Individuals should pursue

team interests over personal ones – including managers.
7. Remuneration – Employee satisfaction depends on fair remuneration for

everyone – financial and non-financial. Fayol said pay should be fair and
reward "well-directed effort."
8. Centralization – Balancing centralized decision making (from the top) with
letting employees make decisions.
9. Scalar Chain – Employees should know where they stand in the

organization's hierarchy and who to speak to within a chain of command.
10. Order – Fayol wrote that, "The right man in the right place" forms an
effective social order. He applied the same maxim to materials: right one,
right place.
11. Equity – Managers should be fair to all employees through a "combination of

kindliness and justice." Only then will the team "carry out its duties with...
devotion and loyalty."
12. Stability of Tenure of Personnel – Organizations should minimize staff
turnover and role changes to maximize efficiency. If people are secure and
good at their jobs, they are happier and more productive.
13. Initiative – Employees should be encouraged to develop and carry out plans
for improvement. As Fayol wrote, "At all levels of the organizational ladder,
zeal and energy on the part of employees are augmented by initiative.“
14. Esprit de Corps – Organizations should strive to promote team spirit, unity,
and morale.
1. Planning – the need "to assess the future and make provision for it."
That includes a flexible action plan that considers a firm's resources,
work in progress, and future market trends.
2. Organizing – laying out lines of authority and responsibility for
employees. This covers recruitment and training, coordinating
activities, and making employees' duties clear.
3. Commanding – getting the most from people. So, managers must
know their employees' skills, delegate to tap into these skill sets, and
set a good example.
4. Coordinating – in a well-coordinated organization, departments
know their responsibilities, the needs of other teams, and their
obligations to them.
5. Controlling – continually checking that rules, plans and processes
are working as well as they should be.
Is Fayolism still Relevant today?
1. His Principles advocate teamwork and working together for the mutual
benefit of the business.
2. The Five Functions reveal the need for organizations to plan and be agile in
the face of changing market conditions.
3. Fayol was one of the first people to recognize that management is a
continuous process.
4. Before human resources management, Fayol wrote about motivating people
by inspiring initiative, commanding respect through values, and ensuring
that people have the time and training they need to be happy and productive
at work.
5. The manager who is respected for their values, leads by example , makes time
to get to know their employees, and gives them the training they need, sounds
a lot like a modern manager.
Criticism of Fayol’s Principles of Management
1. Too formal and Vague : the principle of division of work does not tell
how the task should be divided. Again, to say that an organization needs
coordination is merely to state the obvious.
2. Inconsistency Principles of administrative theory were based on personal
experience and limited observations. There is too much generalizations
and lack empirical evidence.
Importance to "commanding" and not "directing" the workers.
3. Pro-management Bias: Administrative theory does not pay adequate
attention to workers. Workers are treated as biological machines or inert
instruments in the work process.
4. Historical value: Fayol's theory was relevant when organizations
operated in a stable and predictable environment.
Thank You
Presented by:
Anirudh Aggarwal
Poushali Chakraborty
Tarun Barve
Ravi Teja
Sai Shanmukhi
Vaishnavi CA Muni
Shashank S Takbhaware

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EVOLUTION OF

 Henri Fayol developed the Administrative Management Theory. He

• Henry Fayol’s Administrative Management Theory is said as one of the

2. Authority – Managers must possess the authority to give orders, and

3. Discipline – Everyone should follow the rules. To help, you can

5. Unity of Direction – Teams with the same objective should be working

6. Collective Interest Over Individual Interest – Individuals should pursue

7. Remuneration – Employee satisfaction depends on fair remuneration for

9. Scalar Chain – Employees should know where they stand in the

11. Equity – Managers should be fair to all employees through a "combination of

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