Administrative theory or approach of management is Henry Fayol. He is considered as the ‘Father of Modern Management’. Fayol was a french industrialist and a mining engineer. He had worked at all the positions of the mining company before becoming the Managing Director of the company. He portrayed his ideas based on real-world experiences in his book, ‘Administration Industrialle at Generali’ in French language printed in 1916. It was translated in English as ‘ General and Industrial Management” in 1929 and was later on published in U.S.A. in the year 1949.
Henry Fayol explained the importance of managerial efficiency in an organization and focused on the management point of view in dealing the company issues whereas Taylor focused on the workers point. All the industrial activities were divided by Fayol into six groups, i.e., technical, commercial, financial, security, accounting and managerial. These activities are applicable to organisations whether big or small in size. He entirely concentrated on the sixth activity, i.e., m,managing.
Features of Administrative Theory
- Formalized Administrative Structure: Every organization has a formalized administrative structure having define lines of authority from highest to lowest rank. This is also termed as the ‘hierarchical structure’. Ex:- In a large organisation, at the top management is the Board of Directors who is the supreme authority in the company.
- Division of Labour: In an organization there are many departments like marketing, production, finance, etc. Each department performs a specific task in order to achieve the organizational objectives. Therefore, a clear division of labour is very essential, which leads to specialization, and thereby enhancing the organizational performance.
- Delegation of Power and Authority: The power and authority of managers must be equivalent with their responsibilities in the organization. Proper delegation of authority leads to successful execution of the responsibilities. Ex:- The board of Directors is responsible for making all the policy decisions and it is the responsibility of CEO to implement those policies. The CEO delegates the work to the departmental heads that are responsible to get the work done from the respective supervisors and so on. Management as well as the managers should keep in mind that a proper balance between authority and responsibility is always maintained.
Fayol’s Principles of Management
- Division of labour
- Parity of Authority and Responsibility
- Unity of command
- Unity of Direction
- Fair Remuneration to Employees
- Centralisation and Decentralization.