MBA and class notes

Tuesday, 8 January 2013

Principle of management:- Contribution of Henri Fayol, Administrative Management theory in classical theory of management

 Evaluation of management
  • The Classical theory of management         

Administrative Management
(Contribution of Henri Fayol)

Henri Fayol was real father of modern Management. Henri Fayol is the French industrialist in 1841-1925. He was a mining engineer in.  Henri Fayol spent his entire working career in French industry; French cool and iron combine of commentary fourchambault. Henri Fayol developed a general theory of Business Administration.

Henri Fayol was concerned the principles of organization and the function of management. Fayol laid the foundation of management as a separate body of knowledge. He always insisted that if scientific forecasting and proper methods are used in management than company can get satisfactory results.  According to Fayol, management was not personal talent; it is a knowledge base skill. 
Henri Fayol’s Administrative Management is based on six admin activities. They are-
1.     Technical : Production and manufacture
2.     Managerial : Planning, controlling, co-ordination
3.     Commercial : Purchasing and selling
4.     Financial : Use of capital
5.     Accounting : Asset, Liabilities, cost, profits
6.     Security : Protection of goods and Person

Fayol’s fourteen Principles of management

Fayol derived the following fourteen principles.-
·        Division of work: Division of work means specialization. Each job and work should be divided into small task and should be assigned to specialist of it.    
·        Authority and responsibility: Authority means right to give order and command while responsibility means to accomplish objective.
·        Discipline: Discipline is required at every level in every organization. Fayol stated discipline in terms of obedience, application, and respect to superiors.
·        Unity of command: A subordinate should receive order from only one boss.
·        Unity of direction: It means that all the works of an organization must work together to accomplish a common objective in under one plan and head.
·        Subordination of individual interest to common interest: Worker follows the common interest of organization rather than individual.
·        Remuneration: Remuneration should be fair and adequate. It includes both types of incentives financial as well as non financial.
·        Centralization: There should be one central point in organization which exercises overall direction and control of all the parts.
·        Scalar Chain: Scalar chain is the chain or line of command from superior to subordinates.
·        Order: Only proper order can give an efficient management.
·        Equity: Equity creates loyalty and devotion among the employees.
·        Stability of tenure personnel: Security of job for an employee in an organization is very important and pre-requisite condition. Retaining productive employee should always a higher priority of management.
·        Esprit de corps: Management should encourage harmony and proper understandings between workers. Fayol said that in union there is strength. Whole organization should work as a team.
·        Initiative: Manager should be encouraged the employees Initiative for creative working.

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