organisation is a complex entity

32 manager spring 2011
By Jacqueline McLean
management matters
An organisation is a complex entity. It is an intricate mix of diverse
individuals, corporate cultures, structures, systems, technologies
and processes. Managers are tasked with the responsibility
of ensuring that human resources are recruited and deployed
throughout the organisation, in the right place at the right time. In
addition, they are expected to allocate, utilise and control material
and financial resources in cost effective ways. Furthermore, they
are accountable for co-ordinating the organisation’s business
activities, to ensure there is synergy between its micro and macro
environments. Managers clearly face a challenge to effectively and
efficiently manage both the organisation and the people working
within it. Arguably, they may face these challenges and identify
ways in which they can manage better by referring to the guiding
principles of past and present management theorists. One such
theorist is Jules Henri Fayol (1841-1925).
Henri Fayol is widely acknowledged as the earliest pioneer and
advocate of the task of management (Parker and Ritson, 2005).
His name is synonymous with a bygone era when management
was an emerging discipline and the modern world was in the throes
of the industrial revolution. As an early management practitioner
and theorist, Fayol has been credited with laying the foundations
upon which contemporary management theory and praxis has been
built. His principles and functions of management have attracted
discourse and debate in fields ranging from strategic management
to historical principles of management. His theories have been
critiqued and compared with some of the business and academic
worlds’ greatest thinkers, including John Kotter, Henry Mintzberg
and Michael Porter (Pryor and Taneja, 2010).
Fayol’s theories were espoused during a time of great change,
environmental and societal uncertainty, innovation and economic
growth (Burnes, 1996). The transmutation from an agrarian to
industrial society engendered a steep rise in factorisation, the
like of which the world had never witnessed before. This sparked
large-scale theorisation into the organisation and how it should
be managed (ibid). Fayol’s contribution to classical management
theory came from his extensive analysis of the management task,
principally based on observations, personal insights and hands-on,
practical experience of undertaking the job; much of which was at
a senior level (Pugh and Hickson, 2007).
Managing Organisational Activities
Fayol is widely recognised as having developed the ‘administrative
school’ of management, which proposed that managers are
responsible for administering the affairs of the whole organisation,
regardless of its size and the markets in which it operates (Davidson
and Griffin, 2000). Based on this view, Fayol professed that an
organisation’s business life comprised of an amalgamation of six key
activities (Parker and Ritson, 2005; Pugh and Hickson, 2007:97):
l Technical activities: production, manufacture, adaptation
l Commercial activities: buying, selling, exchange
l Financial activities: search for and optimum use of capital
l Security activities: protection of property and people
l Accounting activities: stocktaking, balance sheet, costs,
statistics
l Managerial activities: planning, organisation, command, coordination, control
Fayol attested that the six activities were present in most jobs,
albeit in varying degrees. However, he claimed that as managers
climb the hierarchy, the importance of their managerial abilities
would increase and the emphasis on their technical abilities
would decrease (Parker and Ritson, 2005). Thus, this stressed
the need for managers to possess the requisite knowledge, skills
and competencies to proficiently carry out their roles. In fact,
Fayol was the first advocate of management education (Pryor
and Taneja, 2010).
A Defining Moment in History
Through his experience as a managing director, Fayol empiricised
about what constituted the task of ‘management’; how it could
be better executed; how management practice (and ostensibly,
theory) could contribute to more efficiently and effectively run
organisations. This led him to conclude: “to manage is to forecast
and plan, to organise, to command, to co-ordinate and to control”
(Pugh and Hickson, 2007:96). Thus in 1916 the first, and most
enduring, definition of management was born. This later became
known as the ‘five functions of management’.
Application of Fayol’s Theory to Contemporary
Management
Although it was proposed ninety-five years ago, Fayol’s definition
of management remains one of the most cited of modern times.
The bedrock of his theory is its applicability and generalisability to a
variety of managerial and organisational contexts (Rees and Porter,
2001), and it spans essential aspects of each manager’s job, albeit
in varying degrees. Fayol’s five functions, and their application to
contemporary management practice, is outlined below (Pugh and
Hickson, 2007:98; Rausch, 2005; McLean, 2005).
Fayol – standing the
test of time
Jules Henri Fayol (1841-1925) has left an indelible mark on management history.
Jacqueline McLean looks in detail at his pioneering theories and discovers how
relevant they are to Administrative Management in the 21st Century.
summer 2010 spring 2011 manager 33
Jacqueline McLean FInstAM is a Senior Lecturer in HRM (Human
Resources Management) at Manchester Metropolitan University.
She has worked with the IAM in many different roles since 1992
and is currently a Trustee.
1. To forecast and plan. According to Fayol, forecasting
(‘prévoyance’ in French) involves analysing the future
and drawing up a plan of action (Pugh and Hickson,
2007). Arguably, managers engage in an element of
forecasting, analysis of the environment and appraising the
microenvironment of the organisation through strategic
planning (Hall and McShane, 2008). The globalised
knowledge economy and the presence of ubiquitous change
and competition make forecasting, planning and strategising
key managerial activities.
2. To organise. Fayol believed that an organisation’s structure
was important, as it facilitated the optimum conduct
of its business activities (Pugh and Hickson, 2007). In
contemporary terms, to organise requires managers to
implement an appropriate infrastructure, which will optimise
the organisation’s systems, resources, procedures, processes
and services and enable knowledge to be disseminated
to those who need it, when they need it (Stonehouse and
Pemberton, 1999). Furthermore, organising also incorporates
resourcing the organisation with appropriate human, financial
and material resources.
3. To command. In his original writing, Fayol used the term
‘command’ to illustrate a manager’s responsibility to lead and
direct employees towards the achievement of organisational
goals and strategies (Pugh and Hickson, 2007). ‘To command’
may sound rather draconian these days, but remember,
Fayol espoused his theory during a period of widespread
industrialisation and managers had a firm grip on how the
organisation was run (classical school). They may not have
exercised the participative management styles many of us are
familiar with today. In 21st Century terms, Hall and McShane
(2008) use the word leadership, instead of command, to
describe the process of directing, influencing and motivating
individuals to work towards the achievement of organisational
goals and objectives (Yukl and Lespringer, 2005). Moreover,
Fayol advocated that managers should develop a thorough
knowledge of their employees (Pugh and Hickson,
2007), which, arguably, can be by engendering a positive
psychological contract that engages employees with their jobs
and the organisation.
4. To co-ordinate. Fayol suggested that managers should
bind together, unify and harmonise all the organisation’s
activities and efforts. This translates to contemporary
management practice, insofar as managers are responsible
for ensuring that all the organisation’s business activities are
co-ordinated to maintain synergy and symbiosis between its
functions and processes and internal and external contexts.
Importantly, this includes the input-conversion-output
process. Hall and McShane (2008) posit that co-ordination
has now been subsumed into the function of organising, as
there is synergy between them.
5. To control. Fayol recognised the importance of control
within an organisation and espoused that it ensures
“everything occurs in conformity with established rules
and expressed command” (Pugh and Hickson, 2007:100).
Using 21st Century parlance, control is one of the most
important responsibilities of a manager and involves
exercising appropriate leadership to ensure that everything
is working according to plan and within budget, set
timescales and allocated resources. Control works hand
in hand with planning, strategising and organising (Hill
and McShane, 2008) and seeks to facilitate the alignment
of individual and organisational performance. In their role
as controllers, managers must ensure that appropriate
contingencies are in place to buffer deviations from original
plans and swiftly deal with system anomalies, to prevent
disruption to any of the organisation’s business activities.
Control could be seen as the underpinning function of
management because without it, carrying out the other four
functions would be extremely difficult.
As the above suggests, Fayol’s definition of management
translates into many of the contemporary issues managers are
faced with on a day-to-day basis in their organisations. Of course,
the utilisation of the functions could be viewed from a contingency
approach, insofar as engagement in some or all of the functions
may be dictated by the internal and external contexts of the
organisation during various stages of its lifecycle. For example,
experiencing periods of change, turbulence and uncertainty may
require transformational leadership and more extensive planning,
strategising and controlling. Times of stability may warrant more
emergent approaches to strategy formation and the exercising of
looser control. It all depends!
An Indelible Mark on History
Without doubt, Fayol has left an indelible mark on management
history. Ninety-five years on, his theory has stood the test of time
(Fells, 2000) and is still relevant and valuable to contemporary
organisational leaders (Pryor and Taneja, 2010) because he
‘walked the walk’ and lived the realities, challenges, highs and
lows of being a manager. Through his theory, Fayol has forged
an inextricable link between the manager and the organisation.
Of course, like any good theory, managers can interpret, apply,
evaluate and critique Fayol’s five functions of management
according to their own contexts.
Although his contribution to management and organisational
theory is unquestionable, Fayol has been accused of the
romanticisation of management (Merkle, 1980) and presenting
an almost ‘quasi-autobiographical’ approach to management
theorisation, which, consequently, remains a key part of
contemporary management literature in the 21st Century (Parker
and Ritson, 2005).
In tribute to Fayol’s contribution to historical and contemporary
management theory, Hales (1993:3) professes “if all philosophy
is a set of footnotes to Plato, management theory is, in large
measure, a reply to Fayol’s original memo.”
References
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Wiley and Sons, Queensland
Fells, M.J. (2000). Fayol stands the test of time, Journal of Management
History, Vol 6, No 8, pp 345-360
Hales, C. (1993). Management Through Organisation: The Management
Process, Forms of Organisation and the Work of Managers, Routledge,
London
Hill, C.W.L. and McShane, S.L. (2008). Principles of Management, McGraw
Hill, New York
McLean, J. (2005). Administrative Management in Context, MDP UK Ltd,
Gwynedd
Merkle, J.A. (1980). Management and Ideology: The Legacy of the
International Scientific Management Movement, University of California
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Parker, L.D. and Ritson, P.A. (2005). Revisiting Fayol: Anticipating
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175-194
Pryor, M.G. and Taneja, S. (2010). Henri Fayol, practitioner and theoretician
– revered and reviled, Journal of Management History, Vol 16, No 4, pp
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Pugh, D.S. and Hickson, D.J. (2007). Writers on Organisations, 6th Edition,
Penguin Books
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research, education and management development, Management Decision,
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Yukl, G. and Lespringer, R. (2005). Why Integrating the Leading and
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