Management & Organisation Assessment: Essay

“Critically analyse Fayol’s principles of Management and their relevance to post-capitalist ideas of Management.”

Introduction

Henri Fayol is viewed as an avant-garde in the field of management, a trailblazing classical theorist who pioneered many of the ideas, principles and functions upon which the study and application of this subject is built today. Fayol devised an approach to management that looked at its activities from the perspective of the entire organisation and came up with fourteen principles of management that are still a general base for more modern theorists when looking at the running of a firm.

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These days, there is a continued debate as to the relevance in the modern workplace of the views of old management theorists, out of which Fayol was a huge player. The advancement of markets, technology, communication systems, and perspectives mean that new age commentators are entitled to question whether his values and theories are still applicable in 21st century management. What is required from a manager these days is far less easily defined as it was in the day of classical theorists such as Fayol, with the frequent changing of jobs and the variance in sizes and natures of contemporary enterprises. So, the question is, do Henri Fayol’s principles have a bearing on post-capitalist ideas of management?

Fayol’s Management Theory

Henri Fayol (1841-1925), was a French industrialist who worked for the same institution his entire working life. Fayol became the director of this organisation ( a large mining company) in 1888, where he was struck by the lack of organisation and management in the workplace and he began to develop what he considered to be the fourteen most important principles of management, which explained to managers, who at that time didn’t use an administrative and well thought out approach to management, how they should organise and interact with their staff. ” Administration Industrielle et Generale” (1916) was created and based upon Fayol’s working career, and specifically the experiences and observations that he felt worked well. However, the state of the modern-day economy and political scene is very different compared to those when Fayol’s principles were published in 1916.

Fayol also identified five central elements of the management process: planning, organizing, command, coordination and control. These were his Fayolian functions of management.

Fayol’s principles have been criticised for promoting an unrealisable and often unattainable approach to management, and not being applicable in certain situations. This criticism arises from the fact that Henri Fayol based his theories on his own personal experience, which, as more modern theorists have argued, limits the effectiveness and relevance of Fayol’s teachings.

 The classic school of management has been challenged by various academics who criticise their writings for being vague, unsophisticated and biased from a managerial perspective based on views acquired from experience as opposed to study and observation. There are two perspectives which challenge the traditional view of management. The theoretical view challenges the classical view based upon the views of management from other schools of theory who regard their view of management as superior. The empirical view on the other hand is where researchers conduct studies observing managers whilst at work and using their findings to support their claims.

Fayol v Mintzberg

 Mintzberg says managerial work is enormously convoluted, far more than so than a mere reading of literature on the topic would suggest. There is a need to study it methodically and to avoid the desire to try and find simple solutions for its difficulties. By doing some research, Mintzberg managed to realise that managers do not just control, coordinate, plan or organise, they also attempt to keep interpersonal relationships with employees, with this communication being at the forefront of the duty of a manager. Fayol put forward through his fourteen principles that it was paramount for workers to take directions from only one person. However, he later seems to slightly contradict himself by advocating a hierarchical chain of command. So, if each worker only takes orders from one person then everyone above that worker theoretically would not have control of them. On the other hand, Mintzberg suggests that managers have interpersonal roles and are just an intermediary for the owners of the entire organisation. They are used purely to get across the main objectives of the business and to get the workers to do what they are supposed to do, so they are also motivators. While Fayol just looks at internal factors that influence managers, Mintzberg takes a wider view by looking at external factors using the systems approach. Managers do not just spend their time organising, coordinating, commanding, planning and controlling, they also carry out important tasks such as forging interpersonal relationships, attending important meetings and handling customers.

Rather than functions Mintzberg proposed there were ten roles which could be placed into three categories that managers undertake to a degree but is dependent upon the nature of their work. Interpersonal roles, informational roles and decisional roles. According to Fayol a manager’s function was to plan and organize however Mintzberg found this view did not correlate in accordance with reality, in addition to the fact that what managers did not actually do what they say they do. Many studies into managerial work draw conclude that the reality of management differs vastly from the image proposed by classical theorists. This has led to classic writings being portrayed as “folklore” by Mintzberg who describes them as a reflection which “served to label our areas of ignorance” and therefore found his own work to be more superior as it was based upon studies, and not just personal experience.

Both Fayol and Mintzberg agreed that planning was of foremost importance in a manager’s function. However, Fayol saw the organisation as a closed system, focusing on only the internal factors within an organisation and mainly ignoring interpersonal relationships and interactions with customers and employees. Mintzberg saw the organisation as an open system, placing focus and emphasis on both internal and external influences on an organisation. In conclusion, Fayol’s five principles merely describe the manager’s job, not the actual nature of how a manager should work as is outlined in Mintzberg’s principles.

Fayol v Drucker

Peter Drucker is considered as perhaps the most influential modern management theorist, who is said to have made the first contribution to post-capitalist ideas of management that we are aware of today.

One of the main ideologies pioneered by Drucker is the Management by Objectives (MBO). The idea of MBO is based on making sure that everybody within the organisation has a clear understanding of the objectives of that organisation, as well as having an awareness of their own responsibilities and roles in achieving those aims. The ideal MBO system is to get managers and employees acting to implement and achieve their plans, which automatically achieve those of the organization.

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Clarity of goals was the main function of all of Drucker’s principles, and with MBO, came the concept of SMART goals (Specific, Measurable, Achievable, Relevant, and Time bound goals). This is a concept that is used widely in the present day, not only across firms and organisations but also by people during their daily lives.  According to Drucker, managers should “avoid the activity trap”: getting so involved in their day today activities that they forget their main purpose or objective.

MBO managers don’t focus on the activity, they focus on results. This focus on results is perhaps the biggest difference between Fayolian theory and Drucker’s more modern, goal-oriented principles. While Fayol and his management theories were criticised for being too broad and sweeping rather than pinpoint the actual activity of managers, Drucker’s MBO was solely set up for the benefit of moving the organisation forward, and nothing else.

However, something that Fayol and Drucker shared belief in was decentralisation. Drucker favoured decentralisation as he wanted each and every employee to feel valued and to feel they had a wider purpose, so by creating many ‘small ponds’, he allowed employees to feel satisfaction about their and inspiration toward their task, while also allowing young leaders and managers to make mistakes without heavily harming the organisation. Fayol strived for decentralisation as it ensured a balance between the decision makers at the top of the chain and the workers at the bottom of the chain, and he felt that sharing this authority through top and middle management would provide the best orchestration to any organisation.

Conclusion

Henri Fayol, and most other classical theorists, saw organisations as closed systems. They thought that they should only have to concentrate on what’s happening on the inside of the organisation, whilst not considering the external influences. But the more recent and modern theorists like Mintzberg and Drucker see organisations as open systems, so they would also take into account not only the internal factors but the external factors as well. Therefore, there are some contrasting differences between Fayol’s work and the work of Mintzberg and Drucker, with the modern theorists providing a more complete and up to date view of not only the manager’s responsibilities, but also the activities they actually undertake.

A manager’s role is dependent on the type of organisation they are working for. Organisations run in different ways to one another, and subsequently give out different roles and responsibilities to their managers. Therefore, this means that it is not possible to have one management theory apply to every single organisation, as no management theory is sufficiently broad, not even Fayol’s quite comes close.

As a final point, I would add that Fayol’s fourteen principles and five functions remain extremely usable as a very solid foundation for each and every study on the subject that has succeeded it, and without it, each and every modern manager would have lacked a sufficient starting point from which to develop their theory. For this very reason, Henri Fayol’s principles still remain relevant today.

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