Henri Fayol’s Management Theory and 14 Principles of Administrative Management

What is Henri Fayol’s management theory?

Fayol is known as the “father of modern management” because his theory tasked leaders with setting the tone for the rest of the organization. Fayol believed managers should interact with personnel in five basic ways to control and plan production:

1. Planning: Managers must plan and schedule every part of the industrial process.
2. Organizing: Management must ensure that all of the necessary resources, such as raw materials and personnel, come together at the appropriate time of production.
3. Commanding: Management must encourage and direct workers’ activity.
4. Coordinating: Management must ensure that workers collaborate.
5. Controlling: Managers evaluate and ensure that personnel follow management’s commands.

This video breaks down Henri Fayol’s research and how it changed workplace management.

Fayol’s role in administrative management theory

Henri Fayol’s groundbreaking contribution to administrative management theory lies in his systematic approach to defining what managers actually do and how organizations should be structured for optimal performance. Unlike his contemporaries who focused primarily on worker productivity or technical processes, Fayol developed the first comprehensive framework that addressed management as a distinct professional discipline with teachable principles and functions.

Fayol’s theory established the foundation for modern administrative science by codifying universal management principles that could be applied across industries and organizational types. His work shifted management from an art based on intuition and experience to a science with defined processes, making it possible to train managers systematically and evaluate organizational effectiveness through consistent standards.

The 14 principles of management explained

Fayol’s management theory included 14 key principles:

1. Division of work: Dividing work among employees helps improve productivity, accuracy and efficiency.
2. Authority: Managers have the authority to enforce processes that make employees work as efficiently as possible; they are responsible for their team’s output.
3. Discipline: It is up to managers to discipline workers to ensure compliance and collaboration. 
4. Unity of command: To streamline the chain of command and avoid confusion, employees should answer to only one manager. 
5. Unity of direction: Everyone in an organization should work toward the same goal.
6. Subordination of individual interest: All employees, including managers, should set aside their personal interests and focus solely on the company’s success. 
7. Remuneration of employees: Managers need to reward their employees, monetarily or otherwise, for their efforts.
8. Centralization: Management’s authority should be centralized, but decision-making should be divided equally among leaders so no single entity has the autonomy to make decisions unilaterally.
9. Scalar chain: Managers must communicate the leadership hierarchy across the company so everyone knows whom they report to.
10. Order: Maintaining order across the business increases productivity and output.
11. Equity: All employees should be treated equally and it is managers’ responsibility to protect their teams from discrimination.
12. Stability: Employees who feel secure in their positions perform better and managers are responsible for providing job security to their teams.
13. Initiative: Managers should encourage employees to be proactive whenever possible.
14. Esprit de corps: Managers are responsible for motivating their teams and setting a positive, supportive and collaborative tone. 

“Implementing Fayol’s principles creates structure and clarity, laying the foundation for effective management,” Joan Denizot, founder of inclusivity organization Body Ready, told us.

How Fayol’s administrative theory compares to other management theories

If Fayol’s management theory doesn’t seem like a good fit for your business, there are other approaches you can try. Here is how Fayol’s theory compares to some other successful management theories.

Fayol vs. Taylor’s scientific management theory

Frederick Taylor’s management theory, also known as classical management theory, is based on his mechanical engineering experience. He believed that simplifying roles to increase overall efficiency and praising workers for their contributions were vital to a company’s success. Taylor’s theory focused on four main principles: All work should have an element of science; employers should incorporate the scientific approach in their hiring practices; collaboration between leaders and employees is vital; and managers should equally divide responsibilities among their employees.

Here’s a quick look at how Fayol and Taylor’s theories compare:

• Focus: Fayol provides a broad administrative blueprint for how managers should run organizations; Taylor concentrates narrowly on optimizing individual tasks and worker efficiency at the shop-floor level.
• Methods: Fayol emphasizes managerial functions and principles (e.g., planning, structure, unity); Taylor relies on time-and-motion studies, standardization and incentive pay to raise output.
• People and structure: Fayol balances structure with morale (e.g., equity, esprit de corps); Taylor treats labor as a system to engineer, often reducing worker autonomy.
• Best use: Fayol suits organization-wide governance and coordination; Taylor suits repetitive, measurable processes needing productivity gains.

>> Learn more: The Management Theory of Frederick Taylor

Fayol vs. Mayo’s human relations management theory

The late Harvard Business School professor George Elton Mayo is considered the “father of HR” and the “father of scientific management.” Before Mayo’s contributions to the field of human resources, workplace management theory centered around the belief that workers were motivated solely by compensation. However, Mayo’s human relations management theory concluded that employees are far more motivated by a collaborative culture and positive feedback than by how much they are paid.

Here’s a quick look at how Fayol and Mayo’s theories compare:

• Focus: Fayol centers on managerial control and structure; Mayo spotlights social needs, motivation and group dynamics as performance drivers.
• Methods: Fayol codifies top-down principles; Mayo encourages supervisor support, communication and participative climates to elevate morale and output.
• People and structure: Fayol includes equity and esprit de corps but remains managerial; Mayo prioritizes worker engagement, informal norms and psychological safety.
• Best use: Fayol provides clarity and alignment; Mayo complements it by improving motivation and retention. Together, they enable order and engagement.

>> Learn more: The Management Theory of Elton Mayo

Fayol vs. Weber’s bureaucratic management theory

German sociologist Max Weber developed a management theory that advocated for power distribution and well-enforced rules throughout an organization. Under his theory, the most productive bureaucratic environment involves treating everyone equally and dividing the work equitably based on employees’ areas of expertise.

Here’s a quick look at how Fayol and Weber’s theories compare:

• Focus: Fayol outlines what managers should do and the principles guiding them; Weber designs the ideal organizational form based on rules, hierarchy and impersonal authority.
• Methods: Fayol blends flexibility (e.g., initiative and unity of direction) with control; Weber prioritizes formal rules, clear roles and merit-based appointment to minimize favoritism.
• People and structure: Fayol acknowledges morale and cohesion; Weber emphasizes predictability and legal-rational authority, which can curb discretion.
• Best use: Fayol helps leaders orchestrate strategy and coordination; Weber fits large, compliance-heavy entities needing consistency and accountability.

>> Learn more: The Management Theory of Max Weber

Modern applications of Fayol’s principles in business

Although Fayol developed his management theory based on his experience running a coal mining company, the guiding principles can be adapted to modern small businesses. 

“Fayol’s principles work best in more structured industries and organizations but can be adapted for more modern circumstances if done appropriately,” said Catherine Rymsha, management lecturer at the University of Massachusetts Lowell and author of The Leadership Decision.

The following tenets of his theory translate to modern-day best practices.

Create teams and division of labor based on employee expertise.

Encourage division of work and consider organizing your employees into teams that complement their strengths. 

“Specialize tasks to enhance productivity and efficiency,” said Denizot. “For instance, assign employees roles that match their expertise and training.”

If you create a group where everyone excels in different areas, the team members can rely on and support each other, thus strengthening their work. To achieve this, you’ll need a thorough understanding and appreciation of each employee’s unique expertise. 

Unite employees through shared goals.

Fayol encouraged a team mindset where workers had common goals. Denizot echoed this sentiment by suggesting that organizations practice unity of direction.  

“Align all team efforts toward a common objective,” she said. “For example, launch collaborative projects with well-defined goals and shared responsibilities.”

Working together to achieve a goal will unite team members, thus strengthening their rapport and ability to collaborate in the future. Strong teamwork also encourages everyone to take responsibility when they make mistakes, without fearing repercussions or retribution. 

Motivate employees with compensation.

In Fayol’s method, employers are expected to compensate their workers when they perform beyond expectations. Requiring your employees to work long hours or take on additional responsibilities is unrealistic and could cause tension and resentment. Whether you use bonuses, overtime wages or vacation time, recognize and reward your employees for their work. 

If you appreciate employees and their efforts, consider promoting them and giving them raises. This shows your employees that they are highly valued members of the team. Fayol also encouraged nonmonetary compensation, like awards, retreats or prizes. 

Organize leadership clearly.

Fayol’s management method stresses a top-to-bottom hierarchy of power where supervisors ensure employees adhere to policies and procedures as closely as possible. Although that may not be a good fit for every small business, you can establish a clear leadership hierarchy. Leaders should understand their roles and responsibilities both to the business and the employees they supervise. In turn, your team members should always know which person to contact for different types of issues. 

“For clarity in the workplace, the theory encourages leaders in defining roles and responsibilities to ensure organizational alignment of work and tasks,” said Rymsha. “There is also a beauty in the push for unity amongst leaders and in maintaining order to ensure alignment of resources.”

Make sure your leadership team is accessible by creating a contact list or communication flow chart. When everyone is on the same page about who does what, you can save time and avoid confusion. 

Criticisms of Henri Fayol’s management theory

Since its publication in the early 1900s, Fayol’s theory of management has faced criticism. Here are some of those critiques.

Limited point of reference

Fayol never conducted research to develop his theory. Instead, he based it on his personal experience of running a coal mining company. As a result, Fayol’s management theory may not apply to a broad range of companies and teams and is sometimes considered outdated for today’s professional environment. Additionally, he often limited the principles to managers and supervisors and failed to consider workers’ experience. 

Subjugation of employees

When Fayol developed his theory, employers had complete control over employees. For example, Fayol’s theory requires employees to prioritize the company over their own needs and interests. Followers of Fayol’s methods may be unlikely to check in with employees and get their input on leadership styles. 

Fayol stressed managers’ need to command and control employees instead of collaborating with them. 

“[Fayol’s theory] places emphasis on management authority, potentially creating too much of an ‘us vs. them’ split between leaders and team members,” warned Rymsha.

Now that workers generally have far more rights as employees and individuals, many of Fayol’s guiding principles may seem out of touch by today’s standards, causing tension and a high turnover rate. This is especially true for millennial and Gen Z workers who prioritize autonomy, collaboration and work-life balance.

Overemphasis on efficiency 

All businesses strive to be successful, but Fayol’s management theory has been criticized for stressing efficiency and profits above all else, including the people responsible for the company’s success. While some management theories benefit both workers and the bottom line, Fayol’s theory sacrifices workers in the name of that bottom line. If you don’t update Fayol’s method to apply to modern standards, it could harm your employees’ well-being and work-life balance, alienate your top workers and have legal repercussions.

In some cases, overadherence to Fayol’s methods could even lead to diminished quality. As you rush to push out more products or take on more clients, you may be forced to cut corners that you never would have considered, which could end up harming your company’s reputation. 

“In the VUCA [volatility, uncertainty, complexity, ambiguity] environment that many organizations find themselves in, the theory may fail as rigid structures can also stifle innovation,” said Rymsha. 

Tips for learning more about Henri Fayol’s management theory

Here are a couple of ways to gain additional insight into Fayol’s management principles and approach: 

• Use consulting services to tailor Fayol’s management theory to your business: Management consultants can help you work on new ideas and plans for your current work environment. Believe it or not, many management consulting companies specialize in Fayol’s classical management theory.
• Locate workshops and online courses to help you make the most of Fayol’s management theory: Fayol’s classical management theory often gets absorbed under project management. If you’re looking for courses or workshops to learn more about his 14 principles, start by finding project management courses. Before you sign up, ask the instructor for a syllabus to ensure the class is a good fit for you.
• Examine case studies and real-world applications of Fayol’s principles: Learning how other organizations have successfully implemented Fayol’s 14 principles can provide practical insights and inspiration for applying them to your business. Look for case studies in business journals, industry publications or online forums. Pay attention to how these organizations adapted Fayol’s principles to modern challenges, such as technology integration and remote work.