Lecture The evolution of management thought (6th edition) - Chapter 10: Emergence of management and organization theory

The emergence of management and organization theory had two forms: Fayol’s principles and elements of management, Weber’s rationalized organization structure for efficiency. Fayol stressed: planning and organizing , and education for management. Weber sought leadership based on rational-legal authority, not tradition or charisma.

THE EVOLUTION

OF MANAGEMENT

EDITION

Electronic Resource by:

Regina Greenwood and Julia Teahen

Emergence of Management and Organization Theory

CHAPTER 10

Emergence of Management and Organization Theory

 Henri Fayol – Modern approach to

general management theory through the management process

 Max Weber – Bureaucracy to provide a formal approach to organization theory

Henri Fayol (1841-1925)

 Jules Henri Fayol was born

to French parents in Constantinople.

 His experiences as the Managing Director of Comambault formed his conception of

management as the general activity of integrating functions of the firm in order to intelligently use resources

to attain the objectives of the firm.

 While Taylor was more production oriented, Fayol’s viewpoint was that

of general management.

Henri Fayol, circa 1872

Source: La Societe de Commentry­Fourchambault et Decazeville, 1854­1954, Paris : Brodard et Taupin,

1954, p 160.

Henry Fayol’s Conclusions

 Managerial abilities differed from technical ones, and the success of the firm depended to a

greater degree on good managers than good technicians

 Fayol felt that every organization required

management regardless of whether it was

“commercial, industry, politics, religion, war, …”

 This statement suggests the universality of

management in that this activity is necessary in all organizations.

 It does not mean that managers are universal.

Fayol’s List of Managerial

Qualities

 Physical qualities: health, vigor, address

 Mental qualities: ability to understand and learn, judgment, mental vigor, and adaptability

 Moral qualities: energy, firmness, willingness to accept responsibility, initiative, loyalty, tact

dignity

 General education: general acquaintance with matters not belonging exclusively to the function performed

 Special knowledge: that peculiar to the function,

be it technical, commercial, financial, managerial, etc.

 Experience: knowledge arising from the work

proper; the recollection of lessons a person has derived from things

Henry Fayol’s Conclusions

 Managerial abilities become more important as a person moves up in the hierarchy

 Technical abilities are less essential for upper level managers.

 Management could be taught in schools and

universities but was not because of the absence

of management theory

 Fayol defined management theory as “a

collection of principles, rules, methods,

and procedures tried and checked

by general experience.”

(Fayol, 1949, p 15)

Fayol’s Principles of Management

guides, not absolutes

or universals

 We will not stress each principle…the following is a

discussion of a few key ones

Henri Fayol

Fayol’s Principles of

Management

 Division of Labor – Fayol is rather

traditional here regarding work design However, he also used job enlargement when appropriate.

 Authority – Fayol distinguished between formal authority and personal authority

He was aware of the need to combine and complement the authority of

position with leadership qualities

 Authority must be commensurate with responsibility.

 Centralization – This is not centralized decision making Instead it is finding where decisions

should be made depending on the factors Fayol mentioned (See Wren text for Fayol’s excellent discussion.)

Scalar Chain and the

through the President

(A) can use a

“gangplank to bypass

organizational red

tape

Figure 10.1 - Scalar Chain and the

“Gangplank”

 Plans needed to have the characteristics

of unity, continuity, flexibility, and

precisions.

 Long range planning was a unique idea for his time but a valuable contribution to the evolution of strategic management.

Fayol’s Elements of

Management

 Organizing – Fayol included both the design

of the organization and the staffing job of the manager in this element.

consistent with the objectives, resources,

and requirements of the firm

growth

greater at lower levels

managers

involved selection, evaluation, and training

of personnel

 Control – checking on performance to

identify and make corrections if

necessary

 These plans, people, and resources are

activated, led, motivated, and coordinated.

 As our information system brings us

performance data, the control element

enables management to renew the

elements by reorganizing or whatever is

indicated by our control system.

Fayol’s Elements of

Management

 Management is a continuous

process, not a neat set of

discrete elements and functions

that are performed without coordination of other elements.

 Fayol’s perspective was that of a

strategist.

What remnants of Fayol's ideas exist today in management theory and practice? How did Henri Fayol's approach to management compare with Taylor's?

Henri Fayol

(anti-trust laws limited

this in the U.S.).

Max Weber and

Bureaucracy

 His interest in the U.S Capitalistic spirit led him to ask:

 If a market oriented society could operate large

organizations on some rational, systematic basis?

as the “Founder of Organization

Theory.”

Three “Pure” Types of

Legitimate Authority

 Rational-legal – “right of those elevated to authority…to issue commands.”

 Traditional – rested on the belief “in the

sanctity of immemorial traditions and the legitimacy of the status of those exercising authority under them.”

 Charismatic – based on “devotion to the specific and exceptional sanctity, heroism,

or exemplary character of an individual

person.” (Weber, 1947, p 328)

authority must be the basis for a

bureaucracy

Elements of Bureaucracy

 The division of labor and

authority and

responsibility were clearly

defined for each member

and were legitimatized as

members were selected

on the basis of technical

Weber’s Elements of a

Bureaucracy

 Officials were appointed, not elected

 Administrative officials worked for fixed salaries and were career officials

 Administrative officials were not owners of the units they administered

 Administrators were subject to strict rules,

discipline, and controls regarding the conduct of their official duties These rules and controls were impersonal and uniformly applied in all cases

organization theory had two forms:

 Fayol’s principles and elements of

management

 Weber’s rationalized organization

structure for efficiency

 Fayol stressed: planning and organizing , and education for management

 Weber sought leadership based on

rational-legal authority, not tradition or charisma.