Henri Fayol

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

and to control.
Henri Fayol
French engineer and manager
18411925

Breakthrough ideas
The functional principle
Principles of management

Key book
General and Industrial Management
The Ultimate Business Guru Book 58

Europe has produced precious few original management thinkers. It is surprising
therefore that the achievements and insights of the Frenchman Henri Fayol (1841
1925) are granted so little recognition.
Fayol was educated in Lyon, France and at the National School of Mines in St
Etienne. In 1860 he graduated as a mining engineer and joined the French mining
company, Commentry-Fourchamboult-Dcazeville. Fayol spent his entire working
career with the company and was its managing director between 1888 and 1918.
Fayol also developed an increasingly successful parallel career as a theorist. In
1900 he delivered a speech at a mining conference. When he gave a developed
version of his ideas at a 1908 conference, 2000 copies were immediately reprinted to
satisfy demand. By 1925, 15,000 copies had been printed and a book was published.
During that time Fayol produced the functional principle, the first rational
approach to the organization of enterprise. His studies led to lectures at the Ecole
Suprieure de la Guerre. While retired, Fayol set up a Center of Administrative
Studies and examined the performance of a government department. (This led to his
uncomplimentary report, LIncapacit Administrative de lEtat les Postes et
Tlgraphes.)
Fayol was important for two reasons. First, he placed management at center
stage. Frederick Taylors Scientific Management emasculated the working man, but
still treated managers as stopwatch holding supervisors. Even among Taylors
managers, initiative, imagination and humanity were in short supply or so he
hoped and planned.
Fayol emerged from a similar background in heavy industry. His conclusions,
however, were that management was critical and universal. Management plays a
very important part in the government of undertakings; of all undertakings, large or
small, industrial, commercial, political, religious or any other, he wrote. It was not
until 1954, and Druckers The Practice of Management, that anyone else made such
a bold pronouncement in managements favor.
The second contribution of Fayol was to ponder the question of how best a
company could be organized. (Again, this was something Taylor had ignored.)
Henri Fayol 59
In doing so, Fayol took a far broader perspective than anyone else had previously
done. Fayol concluded: All activities to which industrial undertakings give rise can
be divided into the following six groups. The six functions which he identified
were: technical activities; commercial activities; financial activities; security
activities; accounting activities; and managerial activities.
The management function is quite distinct from the other five essential
functions, noted Fayol. Such functional separations have dominated the way
companies have been managed throughout the twentieth century. It may be
fashionable to talk of an end to functional mindsets and of free-flowing
organizations, but Fayols functional model largely remains.
Fayol also provided a pithy definition of the role of management: To manage is
to forecast and plan, to organize, to command, to co-ordinate and to control.
Implicit in this was that managers can and should be trained in the basic disciplines
demanded by their profession.
Fayols methods were later exposed by Drucker who observed: If used beyond
the limits of Fayols model, functional structure becomes costly in terms of time and
effort.1 While this is undoubtedly true, Fayols observations and conclusions were
important. He talked of ten yearly forecasts . . . revised every five years one of
the first instances of business planning in practice and wrote: The maxim,
managing means looking ahead, gives some idea of the importance attached to
planning in the business world, and it is true that if foresight is not the whole of
management at least it is an essential part of it.
In many respects Henri Fayol was the first management thinker. While others
concentrated on the workman and the mechanics of performance, he focused on the
role of management and the essential skills required of managers. His conclusions
were accurate descriptions of the roles undertaken by managers and the structure of
organizations for decades beyond Fayols life. Yet their direct impact was marginal.
No Fayol doctrine emerged in the same way as Taylorism. (In a thoroughly Anglo-
Saxon industry, the lack of an English translation of his work didnt help.)