Ref: Online available: www.managementinnovations.wordpress.

com

Management Principles developed by Henri Fayol:

1. DIVISION OF WORK: Work should be divided among individuals and groups to ensure that effort and
attention are focused on special portions of the task. Fayol presented work specialization as the best way
to use the human resources of the organization.
2. AUTHORITY: The concepts of Authority and responsibility are closely related. Authority was defined by
Fayol as the right to give orders and the power to exact obedience. Responsibility involves being
accountable, and is therefore naturally associated with authority. Whoever assumes authority also
assumes responsibility.
3. DISCIPLINE: A successful organization requires the common effort of workers. Penalties should be
applied judiciously to encourage this common effort.
4. UNITY OF COMMAND: Workers should receive orders from only one manager.
5. UNITY OF DIRECTION: The entire organization should be moving towards a common objective in a
common direction.
6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS: The interests of one person
should not take priority over the interests of the organization as a whole.
7. REMUNERATION: Many variables, such as cost of living, supply of qualified personnel, general business
conditions, and success of the business, should be considered in determining a worker’s rate of pay.
8. CENTRALIZATION: Fayol defined centralization as lowering the importance of the subordinate role.
Decentralization is increasing the importance. The degree to which centralization or decentralization
should be adopted depends on the specific organization in which the manager is working.
9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each manager, from the
first line supervisor to the president, possesses certain amounts of authority. The President possesses
the most authority; the first line supervisor the least. Lower level managers should always keep upper
level managers informed of their work activities. The existence of a scalar chain and adherence to it are
necessary if the organization is to be successful.
10. ORDER: For the sake of efficiency and coordination, all materials and people related to a specific kind of
work should be treated as equally as possible.
11. EQUITY: All employees should be treated as equally as possible.
12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should always be a high
priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are
usually associated with hiring new workers.
13. INITIATIVE: Management should take steps to encourage worker initiative, which is defined as new or
additional work activity undertaken through self-direction.
14. ESPIRIT DE CORPS: Management should encourage harmony and general good feelings among
employees.
Ref: Online available: www.mindtools.com

Henri Fayol's Principles of Management

Early Management Theory

Fayol's "14 principles" were first published in 1914, but are still relevant to today's managers.

Today's managers have access to an amazing array of resources which they can use to improve their skills. But
what about those managers who were leading the way forward 100 years ago?

Managers in the early 1900s had very few external resources to draw upon to guide and develop their
management practice. But thanks to early theorists like Henri Fayol (1841-1925), managers began to get the
tools they needed to lead and manage more effectively. Fayol, and others like him, are responsible for building
the foundations of modern management theory.

Background

Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an engineer at a large mining
company in France. He eventually became the director, at a time when the mining company employed more
than 1,000 people.

Through the years, Fayol began to develop what he considered to be the 14 most important principles of
management. Essentially, these explained how managers should organize and interact with staff.

In 1916, two years before he stepped down as director, he published his "14 Principles of Management" in the
book "Administration Industrielle et Generale." Fayol also created a list of the six primary functions of
management, which go hand in hand with the Principles.

Fayol's "14 Principles" was one of the earliest theories of management to be created, and remains one of the
most comprehensive. He's considered to be among the most influential contributors to the modern concept of
management, even though people don't refer to "The 14 Principles" often today.

The theory falls under the Administrative Management school of thought (as opposed to the Scientific
Management school, led by Fredrick Taylor).

Fayol's 14 Principles of Management

Fayol's principles are listed below:

1. Division of Work – When employees are specialized, output can increase because they become
increasingly skilled and efficient.
2. Authority – Managers must have the authority to give orders, but they must also keep in mind that
with authority comes responsibility.
3. Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
4. Unity of Command – Employees should have only one direct supervisor.
5. Unity of Direction – Teams with the same objective should be working under the direction of one
manager, using one plan. This will ensure that action is properly coordinated.
 6. Subordination of Individual Interests to the General Interest – The interests of one employee
should not be allowed to become more important than those of the group. This includes managers.
7. Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes
financial and non-financial compensation.
8. Centralization – This principle refers to how close employees are to the decision-making process. It
is important to aim for an appropriate balance.
9. Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or
chain of command.
10. Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have
its place.
11. Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and
acting with kindness where appropriate.
12. Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel
planning should be a priority.
13. Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
14. Esprit de Corps – Organizations should strive to promote team spirit and unity.
Fayol's Six Functions of Management

Fayol's six primary functions of management, which go hand in hand with the Principles, are as follows:

1. Forecasting.
2. Planning.
3. Organizing.
4. Commanding.
5. Coordinating.
6. Controlling.

Key Points

Henri Fayol's "14 Principles of Management" have been a significant influence on modern management theory.
His practical list of principles helped early 20th century managers learn how to organize and interact with their
employees in a productive way.

Although the 14 Principles aren't widely used today, they can still offer guidance for today's managers. Many of
the principles are now considered to be common sense, but at the time they were revolutionary concepts for
organizational management.
Ref: Online available: www.academia.com

Henry Fayol's 14 Principles of Management

Henry Fayol, a French industrialist, developed the theory of management. According to him, managerial
excellence is a technical ability and can be acquired. He developed theories and principles of management
which are universally accepted and make him universalistic. He was pioneer of the formal education in
management. Fayol's principles of management meet the requirements of modern management. Henry Fayol,
offered fourteen principles of management for the first time in 1916. During the period of 1920-40 in the
U.S .many authors did hard work in developing and testing various principles of management. Today, there is a
very lengthy list of management principles and it is not possible to give an exhaustive lot of these management
principles. Here, we are giving some important principles of management.

1. Division of Work:

According to Henry Fayol under division of work, "The worker always on the same post, the manager always
concerned with the same matters, acquire an ability, sureness and accuracy which increases their output. In
other words, division of work means specialization. According to this principle, a person is not capable of doing
all types of work. Each job and work should be assigned to the specialist of his job. Division of work promotes
efficiency because it permits an organizational member to work in a limited area reducing the scope of his
responsibility. Fayol wanted the division of work not only at factory but at management levels also.

2. Authority and Responsibility:

Authority and responsibility go together or co-existing. Both authority and responsibility are the two sides of a
coin. In this way, if anybody is made responsible for any job, he should also have the concerned authority.
Fayol's principle of management in this regard is that an efficient manager makes best possible use of his
authority and does not escape from the responsibility. In other words when the authority is exercised the
responsibility is automatically generated.

3. Discipline:

According to Henry Fayol discipline means sincerity about the work and enterprise, carrying out orders and
instructions of superiors and to have faith in the policies and programs of the business enterprise, in other
sense, discipline in terms of obedience, application, energy and respect to superior. However, Fayol does not
advocate warming, fines, suspension and dismissals of worker for maintaining discipline. These punishments
are rarely awarded. A well-disciplined working force is essential for improving the quality and quantity of the
production.

4. Unity of Command:

A subordinate should take order from only one boss and he should be responsible and accountable to him.
Further he claimed that if the unit of command is violated, authority is undermined, disciplined in danger,
order disturbed and stability threatened. The violation of this principle will face some serious consequences. In
this way, the principle of unity of command provides the enterprise disciplined stable and orderly existence. It
creates harmonious relationship between officers and subordinates, congenial atmosphere of work. It is one of
the Fayol's important essential principles of management.
5. Unity of direction:

Fayol advocates "One head and one plan" which means that group efforts on a particular plan be led and
directed by a single person. This enables effective co-ordination of individual efforts and energy. This fulfills the
principles of unity of command and brings uniformity in the work of same nature. In this way the principle of
direction create dedication to purpose and loyalty. It emphasizes the attainment of common goal under one
head.

6. Subordination of individual interests to general interests:

The interest of the business enterprise ought to come before the interests of the praise individual workers. In
other words, principle of management states that employees should surrender their personnel interest before
the general interest of the enterprise. Sometimes the employees due to this ignorance, selfishness, laziness,
carelessness and emotional pleasure overlook the interest of the organization. This attitude proves to be very
harmful to the enterprise.

7. Fair Remuneration to employees:

According to Fayol wage-rates and method of their payment should be fair, proper and satisfactory. Both
employees and ex-employers should agree to it. Logical and appropriate wage-rate and methods of their
payment reduces tension and differences between workers and management, create harmonious relationship
and a pleasing atmosphere of work. Further Fayol recommends that residential facilities be provided including
arrangement of electricity, water and facilities.

8. Centralization and Decentralization:

There should be one central point in the organization which exercises overall direction and control of all the
parts. But the degree of centralization of authority should vary according to the needs of situation. According
to Fayol there should be centralization in small units and proper decentralization in big organization. Further,
Fayol does not favor centralization or decentralization of authorities but suggests that these should be proper
and effective adjustment between centralization and decentralization in order to achieve maximum objectives
of the business. The choice between centralization and decentralization is made after taking into consideration
the nature of work and the

efficiency, experience and decision-making capacity of the executives.

9. Scalar chain:

The scalar chain is a chain of supervisors from the highest to the lowest rank. It should be short-circuited. An
employee should feel the necessity to contact his superior through the scalar chain. The authority and
responsibility is communicated through this scalar chain. Fayol defines scalar chain as "the chain of superiors
ranging from the ultimate authority to the lowest rank." The flow of information between management and
workers is a must. Business opportunities must be immediately avoided of. So we must make direct contact
with the concerned employee. Business problems need immediate solution, so we cannot always depend on
the established scalar chain. It require sthat direct contact should be established.

10. Order:

According to Fayol there should be proper, systematic and orderly arrangement of physical and social factors,
such as land, raw materials, tools and equipment and employees respectively. As per view, there should be
safe, appropriate and specific place for every article and every place to be used effectively for a particular
activity and commodity. In other words, principles that every piece of land and every article should be used
properly, economically and in the best possible way. Selection and appointment of the most suitable person to
every job. There should be specific place for everyone and everyone should have specific place. This
principle also stresses scientific selection and appointment of employees on every job.

11. Equity:

The principle of equality should be followed and applicable at every level of management. There should not be
any discrimination as regards caste, sex and religion. An effective management always accords sympathetic and
human treatment. The management should be kind, hone stand impartial with the employees. In other words,
kindness and justice should be exercised by management in dealing with their subordinates. This will create
loyalty and devotion among the employees. Thus, workers should be treated at par at every level.

12. Stability of use of personnel:

Principle of stability is linked with long tenure of personnel in the organization. This means production being a
teamwork, an efficient management always builds a team of good workers. If the members of the team go on
changing the entire process of production will be disturbed. It is always in the interest of the enterprise that its
trusted, experienced and trained employees do not leave the organization. Stability of job creates a sense of
belongingness among workers who with this feeling are encouraged to improve the quality and quantity of
work.

13. Initiative:

Under this principle, the successful management provides an opportunity to its employees to suggest their
new ideas, experiences and more convenient methods of work. The employees, who has been working on the
specific job since long discover now, better alternative approach and technique of work. It will be more useful,
if initiative to do so is provided to employees. In simple, to ensure success, plans should be well formulated
before they are implemented.

14. Spirit of Co-operation (Spirit de crops):

In order to achieve the best possible results, individual and group efforts are to be effectively integrated and
coordinated. Production is a team work for which the whole-hearted support and co-operation of the
members a tall levels is required. Everyone should sacrifice his personal interest and contribute his best
energies to achieve the best results. It refers to the spirit of loyalty, faithfulness on the part of the members of
the group which can be achieved by strong motivating recognition and importance of the members for their
valuable contribution, effective coordination, informal mutual social relationship between members of the
group and positive and constructive approach of the management towards workers' welfare.
Principles & Functions of Management

Henri Fayol, a French engineer and director of mines, was born in a suburb of Istanbul in 1841, where his
father, an engineer, was appointed Superintendent of Works to build a bridge over the Golden Horn. They
returned to France in 1847. Fayol studied at the mining school "Ecole Nationale Supérieure des Mines" in St
Etienne. At nineteen years of age he started as an engineer at a mining company "Compagnie de Commentry-
Fourchambeau-Decazeville" in Commentry. Although Fayol's career began as a mining engineer, he moved into
research geology and in 1888 joined Comambault as Director. Fayol turned the struggling Comambault
operation round with his entrepreneurial approach to management thinking. On joining the company in 1888,
the mine company employed over 1000 people; he held that position over 30 years until 1918. By 1900 the
company was one of the largest producers of iron and steel in France, and regarded as a vital national industry.
He was little known outside France until the late 1940s when Constance Storrs published her translation of
Fayol's 1916 work Administration Industrielle et Generale.

On retirement he published his work - a comprehensive theory of administration - where he described and
classified administrative management roles and processes which led to his recognition by others in the
emerging debate about management. He is rightly seen as a key and early influential contributor to a classical
or administrative management school of thought (even though he himself, it is thought, would never have
recognized such a "school" - Jarvis 2005).
His theorizing about administration was built on personal observation and experience of what worked well in
terms of organization. His aspiration for an "administrative science" sought a consistent set of principles that
all organizations must apply in order to run properly.

F. W. Taylor published The Principles of Scientific Management in the USA in 1911, and Fayol in 1916 examined
the nature of management and administration on the basis of his French mining organization experiences.

Fayol synthesized various tenets or principles of organization and management and Taylor on work methods,
measurement and simplification to secure efficiencies. Both referenced functional specialization.

Both Fayol and Taylor were arguing that principles existed which all organizations - in order to operate and be
administered efficiently - could implement. This type of assertion typifies a "one best way" approach to
management thinking. Fayol's five functions are still relevant to discussion today about management roles and
action. He has proposed that there are five primary functions of management :

planning, organizing, commanding, coordinating, and controlling.

The five functions are set out below here and later in the paper some Industrial Engineering training
applications (Six Functions) from the 1960's adds further food for thought - (the author sees these Six
Functions as a pre-requisite to the management thinking of the day):-

to forecast and plan - prevoyance

examine the future and draw up plans of action;

to organise

build up the structure, material and human, of the undertaking;

to command

maintain activity among the personnel;

to co-ordinate

bind together, unify and harmonize activity and effort;

to control

see that everything occurs in conformity with policy and practice.

Fayol also synthesized 14 principles for organizational design and effective administration. It is worthwhile
reflecting on these and comparing the conclusions to contemporary utterances by Peters, Kanter and Handy to
name but three management gurus - Jarvis 2005. Fayol's 14 principles are:

specialization/division of labor

A principle of work allocation and specialization in order to concentrate activities to enable specialization of
skills and understandings, more work focus and efficiency, where efficiency is the direct ratio between INPUT &
OUTPUT - the author sees a further management development as a pre-cursor to this thinking whereby
'EFFECTIVENESS' should always prevail over 'EFFICIENCY' - simplistically EFFICIENCY can often mean JOB RIGHT
but 'EFFECTIVENESS' should always mean 'RIGHT JOB';

authority with corresponding responsibility

If responsibilities are allocated then the post holder needs the requisite authority to carry these out including
the right to require others in the area of responsibility to undertake duties. Authority stems from:

 that ascribed from the delegation process (the job holder is assigned to act as
the agent of the high authority to whom they report - hierarchy)

 allocation and permission to use the necessary resources needed (budgets,

assets, staff) to carry out the responsibilities.

 selection - the person has the expertise to carry out the responsibilities and the
personal qualities to win the support and confidence of others.

The Responsibility R = Authority A

relationship is important to understand. R = A enables accountability in the delegation process. How would we
cope with situations where R > A? Are there work situations where our R < A?

judgment demands high moral character, therefore, a good leader should possess and infuse, into those
around him, courage to accept responsibility. The best safeguard against abuse of authority and weakness on
the part of a higher manager is personal integrity and particularly high moral character of such a manager .....
this integrity, is conferred neither by election nor ownership. 1916
A manager should never be given authority without responsibility - and also should never be given
responsibility without the associated authority to get the work done.

discipline

The generalization about discipline is that discipline is essential for the smooth running of a business and
without it - standards, consistency of action, adherence to rules and values - no enterprise could prosper. in an
essence - obedience, application, energy, behavior and outward marks of respect observed in accordance with
standing agreements between firms and its employees. 1916

unity of command

The idea is that an employee should receive instructions from one superior only. This generalisation still holds -
even where we are involved with team and matrix structures which involve reporting to more than one boss -
or being accountable to several clients. The basic concern is that tensions and dilemmas arise where we report
to two or more bosses. One boss may want X, the other Y and the subordinate is caught between the two
schools.

unity of direction

The unity of command idea of having one head (chief executive, cabinet consensus) with agreed purposes and
objectives and one plan for a group of activities) is self explanatory, and requires no further examination here.

subordination of individual interest to the general interest

Fayol's line was that one employee's interests or those of one group should not prevail over the organization as
a whole. This would spark a lively debate about who decides what the interests of the organization as a whole
are. Ethical dilemmas and matters of corporate risk and the behavior of individual "chancers" are involved
here. Fayol's work - assumes a shared set of values by people in the organization - a unitarism where the
reasons for organizational activities and decisions are in some way neutral and reasonable. In later times the
author sees the 'political' implications of decisions for example in the Public Sector, should be the pre-requisite
of the Chief Executive and none other, since too early a consideration will both stifle and potentially 'corrupt'
later professional management judgments.

remuneration of staf
the price of services rendered. 1916

The general principle is that levels of compensation should be "fair" and as far as possible afford satisfaction
both to the staff and the enterprise (in terms of its cost structures and desire for profitability/surplus).

centralization

Centralization for Fayol is essential to the organization and a natural consequence of organizing. This issue does
not go away even where flatter, devolved organizations occur. Decentralization is frequently centralized, Jarvis
2005. The modes of control over the actions and results of devolved organizations are still matters requiring
considerable attention.

scalar chain/line of authority

The scalar chain of command of reporting relationships from top executive to any employee, whatever their
status, needs to be sensible, clear and understood - this understanding needs to be 'tested'.

order

The level of generalization becomes difficult with this principle. Basically an organization "should" provide an
orderly place for each individual member - who needs to see how their role fits into the organization and be
confident, able to predict the organizations behavior towards them. Thus policies, rules, instructions and
actions should be understandable and understood. Orderliness implies steady evolutionary movement rather
than wild, anxiety provoking, unpredictable movement - in a modern concept Job Evaluation, Job Specification
and particularly Job Analysis should both inform and influence Fayol's terminology of 'order'.

equity

Equity, fairness and a sense of justice "should" pervade the organization - in principle and practice.

stability of tenure

Time is needed for the employee to adapt to his/her work and perform it effectively. Stability of tenure
promotes loyalty to the organization, its purposes and values.

initiative
At all levels of the organizational structure, zeal, enthusiasm and energy are enabled by people having the
scope for personal initiative. (Note: Tom Peters recommendations in respect of employee empowerment -
Jarvis 2005)

esprit de corps

Here Fayol emphasizes the need for building and maintaining harmony among the work force, team work and
sound interpersonal relationships.

Certain principles stand out and are shared throughout the classical approach espoused by Fayol:

Scalar/ hierarchical principle

The chain of authority should be unbroken downwards leading from more authority to less. Managers carry
out authority, more higher and more overall, less lower down and more detailed in day to day terms.
Operations are lower, strategy is higher. This needs an upwards information chain, however, whereas people in
roles and organizations with rules can become important in themselves: the old saying is that the Pope is the
last person to know.

Unity of command

This is looking upwards. A subordinate receives orders from only one person just above (no matter how many
subordinates that person covers). This is so classical it is unrealistic, given the variety of operations in an
organization. Systemic theorists instead consider how different operations can communicated to people taking
their findings.

Span of control

This is about actual numbers of subordinates looking downwards. The direct control a manager has is fewer in
terms of people higher up the scale, and more people by managers lower down. The kinds of decisions higher
up are more varied and wide ranging, whereas the decisions taken lower down are predictable and repetitive
and cover more people. Each subordinate (that is, a manager or worker below) is managed in an overall
fashion by the super ordinate. The problem is whether specialization into levels of expertise allows a manager
above to have an overview based on equivalent information; the second problem is whether strategic
oversight can be step by step hierarchical. Overviews may be unevenly placed in organizations depending on
shat people do, know and understand.
Division of labor and specialization

The narrower the task, the more expert a person can become, and therefore the more efficient. It is Adam
Smith economics. What the classical approach does is fit this into organizations. The problem is alienation or
anomie, as one just ends up being a human robot.

Correspondence of authority and responsibility

The more responsibility one has, the more in authority one is. As one goes down the organization, authority
reduces and so does responsibility. In more contemporary times, psychologists have argued for more
responsibility as it gives a greater sense of ownership and care over the task. It means more authority too, so
even the lowest worker should be listened to. The contradiction in the classical theory is that the lowest
worker is also a specialist, and more so than the supervisor, and therefore carries some authority from the skill
achieved.

(See Lucey, 1991, 70-71)

In the same way that Alfred P Sloan, the executive head of General Motors reorganized the company into semi-
autonomous divisions in the 1920s, corporations undergoing reorganization, to the current day, still apply
"classical organization" principles - very much in line with Fayol's observations.

Fayol's work has stood the test of time and has been shown to be relevant and appropriate to contemporary
management. Many of today's management texts including Daft (2005) have reduced the five functions to
four: (1) planning, (2) organizing, (3) leading, and (4) controlling. Daft's text is organized around Fayol's four
functions

Henri Fayol
STUDENTS MIGHT LIKE TO CONSIDER THIS FURTHER EXAMINATION OF FAYOL'S INFLUENCE FROM THIS
ANECDOTAL EVIDENCE OF THE AUTHOR'S TRAINING IN HNC BUSINESS STUDIES IN THE 1960' S:

Classification of Management Functions

Management (Organization & Administration) plays arguably 'the most important part' in the government of
undertakings: all undertakings, large or small, industrial, commercial, political or religious - this 'truism' might
seem like 'common sense' - Fayol in order to expand this view of 'common sense' defined management (the
attributes of managers) into SIX functions:

1. TECHNICAL - production, manufacture, adaptation;

2. COMMERCIAL - buying & selling - exchange (banking, insurance, warehousing,

advertising);

3. FINANCIAL - search for an optimum use of capital;

4. SECURITY - of property & personnel;

5. ACCOUNTING - stocktaking, balance sheets, costs, statistics;

6. MANAGERIAL - planning, organization, command, co-ordination & control.

These six groups of activities or essential functions were always present in a managerial post. Fayol argued that
ALL managers required capability in all six functions - the job (managerial position) determined the level of
each function where 100% covered the total job - varying percentages should be assigned to each function
Fayol insisted.

Employees have different qualities; physical, mental, moral, general & specialist knowledge, experience. The
possession of these qualities differ in degree between one employee and another - the implication is that one
employee may be more suited to a post which 'emphasises' the need for one or other of the six functions -

With a sole proprietor the span of abilities is likely to be narrow as all functions are required to be executed by
one person, whereas in a large undertaking the span of abilities is likely to be wide, but each 'shop floor'
employee is mainly concerned with one function only e.g. technical in the case of an electrical engineer of
accounting in the case of an auditor.
Table 1 gives Fayol's assessment of the relative importance of abilities needed by people engaged in industry
e.g. National Coal Board used as an illustration since Fayol's background was mining. Fayol went on to verify his
assessment, which at the time were of a general nature, and reached the following conclusion:-

In businesses of all kinds the essential ability of the lower ranks is the technical ability characteristic of the
business, and the essential ability of the higher ranks is managerial ability.

Scrutiny of abilities in the case of other functions (i.e. managerial, commercial, financial, security and
accounting) of a large industrial undertaking gives identical conclusions; the term 'technical ability' merely
requires to be replaced by that of the ability appropriate to the particular function. Whatever function is in
question, the most important ability required of the lower ranks is characteristic of the function viz. technical
on the industrial side, commercial on the commercial side, financial on the financial side etc.. - the outstanding
ability demanded of the higher ranks is without question the managerial ability.

Relative importance of requisite abilities of personnel (in charge - i.e. management) in industrial concerns -
by type of organization:

All these tables have as their object, the drawing of general attention to the importance of the managerial
function in industrial concerns. The technical function has long been accorded the due rank that it must retain,
but it is not sufficient of itself to ensure the smooth conduct of business affairs; assistance is needed from the
other essential functions and in particular the managerial function - this leads us neatly to 'managerial control'

Managerial Control

- What did Fayol mean by this?

Here we can start with the following statement:

To manage is to forecast and plan, to organize, to command, to co-ordinate and to control.

'Control', as used by Fayol, is a managerial term for the 'assessment and review' of performance in conjunction
with a particular work plan; this concept of control is a part of Fayol's definition of Management which, in turn,
is an integral part of the six functions displayed by Management in industry.

These are set out in the paragraphs above.

Control in this sense means, setting a target (and understanding the capability to achieve it), assessing at
regular intervals the advances made towards attaining that target and then analyzing the reasons for any
'difference' between 'intention' and 'achievement'. From this analysis the management exerts control to
encourage trends that lead more closely to achieving the target and to discourage trends that lead away from
the achievement of the target.

Quality Control:

The term quality control has been used widely and loosely. In some cases it represents conventional
acceptance screening inspection perhaps including records whereby defects can be assessed sooner rather
than later. In other cases the term applies to complaint investigations and explanations - without action both
control and quality fall away and both methods and quality organization deteriorate to become sterile
overhead expenses.

Furthermore improved quality and increased output can be directly opposed to one another. For this reason
before applying any incentive considerations a suitable quality control system needs to be developed so that
control can be exerted before quality is compromised in any way.

Quality Control then is the term used for the control of quality of a product and its components at all stages
from the raw material to completion.

Credit Control:

The ratio between what the customer can afford to purchase and what the company can afford to let the
customer purchase. Hence, it acts as a mean limit to a credit account. Naturally with credit charges of a higher
percentage, both the organization and the customer alike are bound to become wary of the potential of a high
inflationary tract. In summary, the term credit Control is both control and manipulation of the amount of
goods a customer can take on over a defined period of time.

Financial Control:

An aid to financial accounting concerned with overall results - an accounting form (ledger), setting out detailed
operating costs of each section of an organization, would be an indicator of financial control over the
organizations operating (variable) costs.
Even where perpetual inventories are in use as part of a financial accounting system, the resulting information
still falls short of meeting the production manager's requirements. This is because financial accounting (as a
part of financial control) is concerned with recording relationships to outsiders. It shows the results of values
added through manufacture, but cost accountancy (equally a part of financial control) traces the added value
through each stage of production. The accounts are so organized so as to show the internal flow of the
product, step by step, from the raw material stage to its final emergence as a finished product.

Cost Control:

Jackson defines cost control as the 'guidance and regulation of internal operations of a business, by means of
modern methods of costing through the measuring of manufacturing and sales performance'.

The definition emphasizes the fact that control is a matter of executive action: for such control to be effective,
the executive acts as on information obtained by a process of analysis. Hence, analysis and control represent a
cause and effect relationship.

Stores Control:

Usually used in conjunction with the purchase records system. Simply and ideally a format showing date, type
and name of article, requisition number, invoice number, quantity required and name of supplier. In addition,
the record acts as a reference when an item needs re-ordering. The information contained in the record
furnishes the purchasing department with all the necessary data, eliminates reproduction of requisitions and
avoids transcription errors. Thus the stores ledger clerk or other person charged with the responsibility for
keeping stock in balance needs only to look over the cards, forms or system to see the percentages over or
under the norm for each item.

Time Standards
Bibliography:

 Lucey, T. (1991), Management Information Systems, 6th Edition, London: DP

Publications.

 Adrian Worsfold

o Extract - Are classical theories any good? They do not exactly cater for
human needs. Weber saw organizations as a capitalist logic, and indeed
as a depressive future. Since then, however, the claim that these
organizations improve efficiency have been questioned: with the counter
claim that workers who feel a sense of empowerment and ownership, and
who take decisions, and where technical expertise determines some
management, produces a higher quality value added product where
individual and team psychology unites with the objectives of the
organization. Nevertheless, these classical theories showed that:
Organization and management are open to intellectual analysis Theories
and findings were established that were open to challenge and, by their
gaps, opened new routes of analysis (e.g. the use of psychology and
newer directions in sociology) (Compare with Lucey, 1991, 72) The result
therefore was the systemic approach (which describes the classical and
mechanistic) combined with the human relations approach.