Administrative Theory of Management

Administrative Theory

Also called as Fayolism. A theory of management that analyzed and synthesized the role of management in organizations.

Focused

on

managerial

practices

that

could

minimize misunderstandings and increase efficiency in organizations. The focus is on enlightened

managers on how to accomplish their managerial duties.

Contributors

Contributors

Mary

Parker

Follet

(1868-1993) -Management is Social Process. -It consists of motivating individuals and groups to work towards the common end. Chester I. Bernard (1886-1961) -Concerned with the optimal approach for administrators to achieve economic insufficiency.

Henri Fayol (1841-1925)

a French industrialist, widely regarded as The

Father of Modern Management. 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.

Division of Activities
Fayol found out that activities of an organization could be divided into six groups:

Techinical- activities concerning production. Commercial- activities concerning buying, selling and exchange. Financial- activities concerning optimum use of capital. Security- activities concerning protection of property and persons.

Accounting- activities concerning final accounts, costs and

statistics.

Managerial-

activities

concerning

planning,

organizing,

commanding, coordinating and controlling

Fayols Fourteen Principles of Management

Fayol formulated a set of fourteen as for principles guidelines

Division of Work Authority Responsibilty

Renumeration

& Centralization

Scalar Chain Order

Discipline Unity Command

implementing
process management:

the
of

of Equity

Stability of Tenure Initiative

Unity of Direction

Subordination
Individual General Interest

of Espirit de Corps to

Fayols Fourteen Principles of Management

Division of Work- This is the specialization that economists consider necessary for efficiency in the use of labor. Fayol applies the principles of all kinds of work, managerial and technical.

Authority & Responsibility- Fayol finds authority and responsibility to be related, the latter, arising from the former. He sees authority as a combination of official factor, deriving from the managers position, and personal factors composed of intelligence, moral worth and experience.

Fayols Fourteen Principles of Management

Discipline-

Fayol
for as

sees

discipline
which

as
are

respect directed

agreements achieving

obedience,

application and energy.

Unity

of Command This means that

subordinates should receive orders from

one superior only.

Fayols Fourteen Principles of Management

Unity of Direction- In this principle in each group of activities, the same objective must have one head and one plan. As distinguished from unity of command, this relates to the organization of the body corporate, rather than to personnel. He did not mean that all decisions should be made at the top.

Subordination of Individual to General InterestWhen the interest of management and the workers differ, management must reconcile them.

Fayols Fourteen Principles of Management

Remuneration-

The

remuneration

and

methods of payment should be fair. It should afford the maximum satisfaction to

employees and employer.

Centralization- Fayol refers to the extent to which authority is concentrated. Individual circumstances will determine the degree that will produce the best overall yield.

Fayols Fourteen Principles of Management

Scalar

Chain-

This

is

the

chain

of

superiors from the highest to the lowest

ranks.
Order-

Breaking this intomaterial and

social order, Fayol believes that there should be an arrangement of things and

people in an organization.

Fayols Fourteen Principles of Management

Equity- Loyalty and commitment should be

elicited from personnel by a combination of kidness and justice on the part of managers when dealing with subordinates.

Stability of Tenure- Fayol pointed out the unnecessary turnover to be both the cause and the effect of poor management and stressed its dangers and costs.

Fayols Fourteen Principles of Management

Initiative- is conceived to be the thinking out and execution of a plan and one of the satisfactions for an intelligent individual to experience. Fayol exhorts managers to sacrifice personal vanity in order to permit subordinates to exercise it.

Esprit de Corps- This is the principle that in unity, there is strength. This, in effect, is the extension of the principle of unity of command which emphasizes the need for teamwork and the importance of communication in obtaining it.