Administrative Management Theory
1
Administrative Management Theory
Melanie L. Turner
Ball State University
Administrative Management Theory
2
Abstract
This literature review will focus on Administrative Management Theory, developed by Henri
Fayol, in response to the lack of management principles for organizations in the late 1800’s and
early 1900’s. The background, history, as well as main points of the theory will be discussed in
the introduction. A comparison of the literature to the theory will be discussed and major points
will be identified with each piece of literature. Fayol’s Administrative Management Theory will
lay the foundation for the administrative structure and principles.
Administrative Management Theory
3
Introduction and Background of Administrative Management Theory
According to Tompkins (2005), public and private institutions were growing rapidly
during the late 19th and early 20th centuries. Both in the United States and Europe, there was no
set of standards for managing a complex institution, a work environment that was growing by
leaps and bounds, both in Europe and the United States. There was a need for structuring
authoritative lines and responsibilities from the top down in an organization as well as explicit
separation of labor within the departments of the organization and the appropriate authority
given to administrators of the organization, depending on their level of responsibilities.
Henri Fayol’s background is that of an engineer. He was employed by a coalmining firm,
Commentry-Fourchambault, and stayed with this company until his retirement in 1918. During
his tenure, he brought the company through a near-bankruptcy and facilitated its growth through
the end of World War I. He attributed his success to basic principles of management; however,
no manual was available for general management in the early 1900’s.
According to Fayol, there are five managerial functions: planning, organizing,
commanding, coordinating and controlling. One of the main duties of a good manager is to
oversee the work of subordinates and maintain accountability but still give them a sense of
empowerment over their own abilities. Supervisors are responsible for these functions, not just
the CEO. He stressed that the responsibilities need to be flexible and available to be adapted to
each situation that may arise in an organization.
With these functions, Fayol introduced administrative methods for conducting daily
business within an organization: survey, action plan, statistical reports, minutes, and an
Administrative Management Theory
4
organizational chart. This keeps the organization moving in the right direction and promotes
improvement within the administration.
During his tenure with the mine, Fayol developed fourteen administrative principles
(p. 100) applying them to the management of employees in his position as the executive officer.
I have placed my comments regarding each principle in italics. They are:
1.
Division of work. All complex organizations must assign fixed tasks to its members to
profit from the advantages of specialization. (People will become skilled in areas when
they are assigned directly to something.)
2.
Authority and responsibility. Authority gives rise to responsibility; good leaders must
exercise both formal and personal authority and must sanction those who do not fulfill
their assignment responsibilities. (Supervisors/leaders are responsible for success of
their employees and make them accountable if they don’t fulfill those responsibilities.)
3.
Discipline. Leaders must maintain discipline if the organization is to function efficiently
and effectively; obedience, loyalty, and dedication must be obtained from all members in
accordance with employer-employee agreements. (Appropriate discipline is important to
maintain order which in turn leads to loyalty and dedication to the organization.)
4.
Unity of command. An employee should receive orders from only one superior, his or
her immediate supervisor; dual command undermines authority, discipline, and order.
(Receiving orders from more than one supervisor blurs the true authority of the
supervisor in charge.)
5.
Unity of direction. There should be one leader and one plan for a group of activities
having the same objective. (Leaders can be a collective group, but only one of them
should be the leader of the group when having shared activities.)
6.
Subordination of individual interest to general interest. The interests of any member
or group of members must not be allowed to prevail over the interests of the organization
as a whole; ways must be found to reconcile individual and general interests. (The
organization’s interest is most important; individual or group interest must be corralled
to reach a compromise with the interest of the organization.)
7.
Remuneration of personnel. Employees must receive remuneration that is fair and
encourages productive work effort. (Fair pay for what you’re worth!)
8.
Centralization. Directives must always come from a central source, but the optimal
balance between centralization and decentralization must be determined for each
organization separately; this is a question of how much discretion to allow members at
Administrative Management Theory
5
each level. (Each organization must decide how much comes from the very top and how
much comes from the supervisory level.)
9.
Scalar chain. Complex organizations require a chain of superiors from the highest to
lowest levels of authority; communications normally must ascend and descend through
each level, although authorized exceptions may be made in the interest of speed. (All
superiors in the top to bottom chain should be included in any communications; if
authorized, however, flexibility in relaying the communications may take place if
important.)
10.
Order. Smooth organizational functioning requires a place for everything and everyone,
and everything and everyone in its appointed place. (There is a place for everything and
everyone, and everyone and everything should remain in their place.)
11.
Equity. Retaining devoted and loyal employees requires that they be treated with
kindliness and fairness. (This is extremely important, especially with today’s transient
employee. Company loyalty is at a low point today.)
12.
Stability of tenure of personnel. Smooth organizational functioning is impossible when
personnel, especially management personnel, are constantly coming and going; steps
must be taken to obtain as much stability as possible. (Maintaining management
personnel is very important to keep the organization running smoothly. It is not in the
best interest of the company to be training new managers all the time. Finding
employees that believe in the organization and stay is the key to its success.)
13.
Initiative. It is essential to encourage individual initiative because it stimulates
motivation; this is achieved by allowing employees freedom to propose and carry out
their own ideas, within the limits of authority and discipline. (The freedom to go to a
supervisor with an idea and it is within the realm of the goals of the company, creates the
atmosphere of worthiness and value for employees.)
14.
Esprit de corps. Every effort must be made to establish and maintain cohesion among
personnel; dividing enemy forces is clever, but dividing one’s own team is a grave error.
(Kind of like organizational suicide; a division of the team means impending doom. An
organization should be in general agreement with each other, not pitting one side against
the other.)
With the following literature, I will attempt to apply these administrative principles of
Henri Fayol.
Administrative Management Theory
6
A Model of Natural Disaster Administration: Naming and Framing Theory and
Reality
Richard Herzog’s article, written in 2007, was after the Hurricane Katrina catastrophe,
and discusses the difference between natural and man-made disasters and how they can have
common goals and principles in which to follow. It also describes the theory and reality in the
administration of natural and man-made disasters. An example of a natural and man-made
disaster would be the natural disaster of Hurricane Katrina, and the man-made loss of the
breached levees (p. 587). The administration of handling natural disasters in our country has the
responsibility of proposing theories which also reduces the ambiguity portrayed to the public of
anticipated problems. This article argues there were no clear-cut theories in place for disasters of
this size. The article explains a series of filters necessary for correct administration of a good
natural disaster theory. They include 1) Disaster planning and mitigation, 2) projected/actual
reality, and 3) disaster management/response.
Public administration theories were not applied as well to the Hurricane Katrina disaster
in that their theories were not well developed. This takes time and employees with expertise in
the area. These theories were not thought out nor experienced in a setting as monumental as this
particular natural event. They were not prepared for the needless loss of human life and pain and
suffering (p. 590). A plan put together with experienced employees in this field at the table,
could be in place for future disasters. Dividing the work up between the employees of the
organization as well as giving direction and guidance through the process would be helpful.
Discussions between public and private agencies should take place so both may learn from past
mistakes and successes. The author believes, “theoretical approaches should play a more
prominent role in natural disaster administration.” (p. 586)
Administrative Management Theory
7
Supporting Faculty through a New Teaching and Learning Center
Centralization in planning for this center came from the author of this article. After
discussion and working closely with administrators and creating an advisory board, as well as
talking with other directors of teaching and learning centers, there were many areas in which to
pull expertise in this field from the university. Newly retired faculty still interested in serving in
some capacity were recruited, and offered advice, conducted focus groups, or collected ideas
from the several colleges on campus. Current faculty was included by establishing a faculty
advisory board. Academic Assessment assisted with pulling together all the information from
questionnaires, surveys, and focus groups with stakeholders within the organization. This
project had a leader or central figure in the birth of the project, with the expertise of retired
faculty, current faculty, the blessing of the administrators, and the assistance from other
departments on campus.
Moving from A to B
This article, written by management consultant Paul Engle, describes a situation in which
he was requested to evaluate a software program and enhance a complex process necessary for
the smooth running of their organization. It was the opinion of the author that the organization
only needed to enhance the software already established instead of replacing it by reducing the
steps it took to complete the process. He proved to them that the finished product would produce
even higher quality results with the enhancement on their existing program.
The management team was more anxious to receive a new software program than they
were in enhancing the existing one. Once on board and fully believing in the consultant, they
had the task of getting the other employees on board. By talking with the employees, many more
ideas were discovered to be beneficial to the enhancement of the software. The team recruited
Administrative Management Theory
8
key individuals to assist in the enhancement of the software program, per the direction of the
consultant. This gave the employees a feeling of empowerment and pride in their work. They
were being taken seriously and awarded for their efforts toward enhancing the program.
Conclusion
This paper has attempted to review the administrative management theory, comprised by
Henri Fayol. Review of the history of Fayol, his background and foundations for the theory were
discussed and fourteen administrative principles listed for information. It is interesting to me to
review these principles and know that, in general, these principles are followed today in both
private and public sectors of business. Flexibility is key in applying these principles to every
work situation, but can succeed if there is a strong group of managers and leaders who can view
their employees as a group of their team, having ideas and concerns for the common good: their
employer.
Administrative Management Theory
9
References
D’Avanzo, C. (2009). Supporting faculty through a new teaching and learning center.
AAC&U Peer Review, Spring, 2009, 22-25.
Engle, P. (2012). Moving from a to b. Industrial Engineer, 44(7), 20.
Herzog, R. (2007). A model of natural disaster administration: Naming and framing
theory and reality. Administrative Theory & Praxis, 49(4), 49(4), 586-604.
Tompkins, J. R. (2005). Organization theory and public management. Boston, MA:
Wadsworth.