BCom Notes Part II Management Administrative Theory of Management

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Administrative theory of Management

Describe in brief the administrative theory of Management? OR

Briefly explain the Fayol’s general principles of Management.

OR

To arrange is to forecast and plan, to organize, to command, to coordinate and to control, Discuss

OR

Discuss the contribution of Fayol to the science of Management.

Henri Fayol – Father of Management

Fayol was a French mining engineer in his early thirties, but after that he switched over to general management and was Managing Director from 1888 to 1918. He wrote his book General and Industrial Management in 1916 in French, which was translated in English in 1949, only when American Management writers came to know about his ideas.

Fayol is known as the father of management or the founder of the classical management. Not because he was first to investigate managerial behavior, but because he was the first to systematize it. He was contemporary to Taylor. Taylor was basically concerned with organizational functions, whereas Fayol was interested in the total organization. It may be noted that Taylor is known as the father of scientific management, i.e. supervisory or lower management, while Fayol is recognized as the father of management, i.e. the higher management or the general management.

Division of Business Activities

According to Fayol, business activities in any organization consist of six interdependent operations as follows:

1. Technical – activities concerning production.

2. Commercial – activities concerning buying, selling and exchange.

3. Financial - activities concerning optimum use of capital.

4. Security – activities concerning protection of property.

5. Accounting – activities concerning final accounts, costs and statistics. And

6. Managerial – activities concerning planning, organizing, commanding, coordinating and controlling.

According to him, the first five activities were well known and as such to devoted his attention to the description and explanation of the managerial activities. Also he analyzed the nature of such activities and skill requirements, which were so far given little scattered attention by thinkers.

Universality of Management: (Elements of Management)

Fayol considered the process of management to be of universal application and distinguished between five elements of the process. He regarded these elements of management as the function of management, which were being performed by all managers universally and at all the levels of organization. He divided management functions into five parts as follows:

1. Forecasting and planning
2. Organizing
3. Command
4. Coordination
5. Control

Thus, according to Fayol, management means to forecast and plan, to organize, to command, to co-ordinate and to control. The management was defined as the process of performing these functions. It may be noted that the present pattern of management functions follows broadly the lines set by Fayol.

Fayol emphasized that management involved the application of certain skills, which could be acquired by persons on the basis of systematic instructions and training. Once acquired the skills could be applied to all kinds of institutions including church, schools, political as well as industrial organization.