Management Theory of Henri Fayol

What is the management theory of Henri Fayol?

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.

14 principles of Henri Fayol’s management theory

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 their 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. 

How does Henri Fayol’s management theory apply to small businesses? 

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

Group employees into teams.

Consider organizing your employees into teams that complement their strengths. 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. 

Fayol encouraged a team mindset where workers had common goals. Working together to achieve a goal will unite your 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. 

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. 

What are the 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 often 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. 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.

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. 

How can you learn 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.

What are alternatives to Henri Fayol’s management theory?

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

Follett management theory

Mary Parker Follett’s management theory advocated for empowering and collaborating with workers. Follett’s belief in fostering a collaborative environment with open lines of communication and support between managers and employees is vital to creating an empowering company culture.

Gilbreth management theory

Frank and Lillian Gilbreth’s management theory promoted workplace efficiency and consistency over anything else. The husband-and-wife team believed the best way to accomplish any task was to eliminate unnecessary steps and maximize output. They often evaluated an office’s physical layout to identify improvements that could boost productivity.

Kanter management theory

In her management theory, Harvard professor Rosabeth Moss Kanter states that leaders should always seek opportunities to improve their work environments through positive change. Her change management model posits that leaders’ actions and a company’s operating procedures affect employees’ attitudes, behaviors and resilience.

Mayo 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 studies concluded that employees are far more motivated by a collaborative culture and positive feedback than by how much they are paid.

Mintzberg management theory

Henry Mintzberg’s management theory is based on business organizational types and provides a tailored approach based on a company’s structure, industry and leadership objectives. Mintzberg’s theory recommends organizing a company by roles and responsibilities to help improve efficiency, employee engagement and retention.

Taylor 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.

Weber 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.