Managerial contribution to the organisation theory

Henri Fayol (1841-1925)

Henri Fayol, mining engineer and disciple of Saint-Simon-follower Stephane Mony, held different managerial positions before being appointed managing director of a mining company in difficulty. His business success and the fact that he recognised the legitimacy of trade unions made him a popular and admired figure. When he reached retirement age, he created a centre for research into administration in order to formalise and pass on knowledge about people management, which was a kind of pragmatic theory based on experience. In 1916 (at the age of 75), he published Industrial and General Administration, in which he presented the general principles of organisational management. He is considered the inventor of modern management; his work gave rise to many debates about administration/management principles. These principles concern the following points:

- The number of direct subordinates that a manager can really supervise (span of control). Supervision becomes difficult when the number is greater than seven.

- The division of labour and the grouping together of activities: here the idea is to bring together similar activities within the same department of an organisation.

- Unity of command: each subordinate should be placed under the authority of a single boss. Dual control is a source of conflict.

- Hierarchy: all members of an organisation are brought together within a pyramid structure. The hierarchy must be followed and respected, except when it may cause corporate damage, in which case a certain distance should be set up. If there are two processes to choose between, individuals must have the courage to choose the one that best serves the general interest.

- Subordination of individual interest to collective interest must be applied to cases of conflicting interest. Management must set an example by adopting as fair an approach as possible with respect to conventions binding employees to an organisation and by constantly supervising the way the organisation is run.

- Decentralisation and responsibility: subordinates must deal with routine problems while managers deal only with exceptional problems. Managers must spread the courage to shoulder responsibilities.

- Fair pay for effort. This must encourage staff morale without leading to excessive remuneration.

- Staff stability. This must enable skills to be developed.

- Stimulation of individual initiative. This must be encouraged at all levels of the organisation.

Staff union: this must facilitate harmony and be a source of collective strength.

Fayol defines the role of general management as being to plan ahead, command, coordinate and control. This definition of the managerial role was to be constantly referred to by organisational theoreticians, right up to the work of Henry MiNTZBERG in the 60's. The job of management is to:

- Define the goal of the company (products, markets, performance, etc.), and make sure it is constantly adapting to its economic environment.

- Mobilise a coalition of synergies within the organisation, in order to outline specific goals and manage all entities.

- Set up a strategy and allocate resources, organise communication networks and plan future development.

- Make sure that structures operate properly and different elements are well coordinated and ensure organisational maintenance.

- Assess and monitor company activity, making sure especially that the results are in line with the objectives.

Although FAYOL recommends rational and impersonal management principles (linked to status and not to individuals), he never sees an organisation simply in terms of its organisation chart and its regulations. He defends the idea of authority based on competency and respect, as well as fair pay. He insists on the notion of esprit de corps between members of the organisation. A feeling of unity contributes to an organisation's harmonious operation.

Fayol is not the only manager to formalise the knowledge he gained from experience within successful organisations. In the United States, F.W. MOONEY and, in England, Colonel Lyndall URWICK did the same.

These three authors were to turn organisational management into a process made up of planning, management, division and coordination of labour, as well as control. The major idea behind this conception of the organisation comes from the conviction that using these organisational principles and this rigging, orders issued at the top of the organisation will filter down to the lower ranks and thus produce a determined and foreseeable effect.

The recommendations of these organisational thinkers were also to be transposed to the principles behind various modern techniques of management, planning, control and budget rationalisation. Later, in the 20^th century, they can be found in the conception of decentralised, instrumented organisations (target-based management, rationalisation of budget choices, information systems) enabling an entire organisation to structure and guide action in partly autonomous entities.

The idea of designing rational and efficient organisations seduces a great number of authors and organisers. Most approve of it, and even wish to implement it. Generally speaking, there is little opposition to the principle as it stands. However, it does seem that such an ideal is relatively simple to defend, as is defining appropriate recommendations.

Actually putting it into practice, on the other hand, is a lot less easy and produces mixed results.