Theories of Management - Early Management Theory - Chapter 1 - Part 6

Theories of Management

A. Early Management Theory/ Administrative Management school of thought:

Today's managers have access to an amazing array of resources which they can use to improve their skills. But what about those managers who were leading the way forward 100 years ago?

Managers in the early 1900s had very few external resources to draw upon to guide and develop their management practice. But early theorists like Henri Fayol (1841-1925), managers began to get the tools they needed to lead and manage more effectively. Fayol, and others like him, are responsible for building the foundations of modern management theory. Through the years, Fayol began to develop what he considered to be the 14 most important principles of management.

Fayol's principles are listed below:

·         Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.

·         Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.

·         Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.

·         Unity of Command – Employees should have only one direct supervisor.

·         Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.

·         Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.

·         Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.

·         Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.

·         Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of command.

·         Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.

·         Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.

·         Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.

·         Initiative – Employees should be given the necessary level of freedom to create and carry out plans.

·         Esprit de Corps – Organizations should strive to promote team spirit and unity.

Fayol's six primary functions of management, which go hand in hand with the Principles, are as follows:

·         Forecasting.

·         Planning.

·         Organizing.

·         Commanding.

·         Coordinating.

·         Controlling.