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Updated Feb 21, 2023

Management Theory of Henri Fayol

Henri Fayol's management theory is a simple model of how management interacts with personnel.

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Sean Peek, Senior Analyst & Expert on Business Ownership
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Henri Fayol’s management theory is a simple model of how management interacts with personnel. It covers concepts in a broad way, so almost any business can apply his theory of management. Today, the business community considers Fayol’s classical management theory as a relevant guide to productively managing staff.

What is the management theory of Henri Fayol?

The management theory of Fayol includes 14 principles of management. From these principles, Fayol concluded that management should interact with personnel in five basic ways in order to control and plan production.

  1. Planning. According to Fayol’s theory, management must plan and schedule every part of the industrial processes.
  2. Organizing. In addition to planning a manufacturing process, Fayol argued that management must ensure all of the necessary resources (raw materials, personnel, etc.) come together at the appropriate time of production.
  3. Commanding. Fayol’s management theory states that management must encourage and direct personnel activity.
  4. Coordinating. According to his theory, management must make certain that personnel work together in a cooperative fashion.
  5. Controlling. The final management activity, according to Fayol, is for the manager to evaluate and ensure that personnel follow management’s commands.
FYIDid you know
If you’re looking to change up your management style but don’t connect with Fayol’s methods, you may be more interested in the theories of Henry Mintzberg, who suggested reorganizing management roles for clarity and optimization.

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

Group employees into teams.

Organize your employees into teams that complement their strengths in order to complete projects. If you create a group where everyone has different strengths and weaknesses, the team members can all support each other as needed, ensuring the work produced is as strong as possible. To achieve this, you’ll need to have a thorough understanding and appreciation of all of your employees and their skill sets. 

Fayol encouraged a team mindset where workers had common goals. Working together to achieve a goal will unite your team members, bettering their rapport and ability to continue working together in the future. Strong teams also minimize the role of blame in the workplace and encourage team members or whole teams to take responsibility when they make mistakes. 

Motivate employees with compensation.

In Fayol’s method, employers are expected to compensate their workers for any work or performance beyond expectation. Expecting your employees to work long hours or beyond their responsibilities is unrealistic and could cause tension and resentment. Whether you use bonuses, overtime wages or vacation time, recognize and reward your employees for all the work they do. If you appreciate an employee and their effort, you can also promote them and give them a raise. This demonstrates to them and the rest of your employees that you are as dedicated to them as you are asking them to be to you. Fayol also encouraged nonmonetary compensation, like awards, retreats or prizes. 

Clearly organize leadership.

Fayol’s management method stresses a top-to-bottom hierarchy of power where supervisors ensure employees are following the rules as closely as possible. Although that may not be a good fit for every small business, you can incorporate a clear organization of your leadership. Individuals in a position of leadership — from vice presidents to team managers — should understand their roles and responsibilities to the business as well as to the employees they supervise. In turn, your team members should always know who they can turn to for any issue — whether that is you, a VP or HR. If they have an issue with a project, they should know clearly how to resolve it. 

You can make your leadership’s organization openly accessible for employees to reference as a contact list or communication flow chart. When everyone is on the same page about who does what, you can save time and confusion as well as minimize the likelihood of major issues. 

What are the criticisms of Henri Fayol’s management theory?

Keep in mind there are limitations to Fayol’s management theory. Since its publication in the early 1900s, Fayol’s theory of management has come under criticism. Some of the critiques include:

Limited point of reference

Fayol never conducted research; instead, he based his theory on personal experience running a coal mining company. As a result, the Fayol management theory may not work in every country, for every industry, or with every team size. While some of his advice may work for you, it’s likely much of it won’t. 

Additionally, he only focused on the experiences of managers and supervisors without any consideration for the workers own day-to-day operations. Therefore, Fayol’s management of his own business was not even informed by its different levels. Beyond being limited in his own time, Fayol’s management methods are outdated in many ways.

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 would be unlikely to check in with employees and get their input on management styles

Fayol stressed management’s need to command and control employees instead of working with them collaboratively. Now that workers generally have far more rights and are recognized as individuals, employing that aspect of Fayol’s theory might cause tension and a high turnover rate

TipBottom line
If you want to incorporate the experience of your employees as you improve the day-to-day operations of your business, consider the theories of Lillian and Frank Gilbreth, who tracked movements down to 1/2000 of a second to improve efficiency.

Overemphasis on efficiency 

All businesses need to be successful, but Fayol’s management theories have been criticized for stressing efficiency and profits above all else — including the people making that business succeed. While some management theories intend to benefit both workers and the bottom line, Fayol’s may be considered to sacrifice workers in the name of that bottom line. Without tweaking the methods or updating them to modern standards, a manager using Fayol’s method could harm their employees’ well-being and work-life balance. This approach will likely alienate good employees. After all, no one wants to feel underappreciated and used.

In some cases, over-adherence 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 you would never have considered before. 

How can you learn more about Henri Fayol’s management theory?

Find summaries of Fayol’s management theory online

For the easiest way to view information on Fayol’s management theory, look up online summaries that delve into Fayol’s 14 principles of management.

Use consulting services to tailor Fayol’s management theory to your business

Management consultants can help you work on new ideas and plans into your current work environment. Believe it or not, many management consulting companies specialize in the classical management theory of Fayol.

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 the title “Project Management.” So if you’re looking for courses or workshops to help you better understand his theory and 14 principles of management, try looking for project management courses, and ask the instructor for a syllabus before you sign up. This will ensure that you enroll in a class with the right focus.

The University of New England and Watermark Learning both offer extensive online training in project management that covers Fayol’s theory as well.

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Sean Peek, Senior Analyst & Expert on Business Ownership
Sean Peek co-founded and self-funded a small business that's grown to include more than a dozen dedicated team members. Over the years, he's become adept at navigating the intricacies of bootstrapping a new business, overseeing day-to-day operations, utilizing process automation to increase efficiencies and cut costs, and leading a small workforce. This journey has afforded him a profound understanding of the B2B landscape and the critical challenges business owners face as they start and grow their enterprises today. In addition to running his own business, Peek shares his firsthand experiences and vast knowledge to support fellow entrepreneurs, offering guidance on everything from business software to marketing strategies to HR management. In fact, his expertise has been featured in Entrepreneur, Inc. and Forbes and with the U.S. Chamber of Commerce.
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