ADMINISTRATIVE

THEORY
| ORGANIZATION & MANAGEMENT
WHAT IS ADMINISTRATIVE
THEORY OF MANAGEMENT?
 Administrative management theory attempts to find a
rational way to design an organization as a whole. The theory
generally calls for a formalized administrative structure, a clear
division of labor, and delegation of power and authority to
administrators relevant to their areas of responsibilities.
 emphasizes departmentalization of functions or activities to be
performed for achieving a common purpose. It also focuses on
the good management practice or implementation
WHO IS THE THEORISTS OF THIS
ADMINISTRATIVE THEORY

 HENRI FAYOL (1841 – 1925)

The Administrative Theory of Management was first generalized by
Henri Fayol (1841-1925) with his work and publications, Fayol's 14
Principles of Management (1888) and Administration Industrielle et
Generale (1916). 
Fayol was a French Mining Engineer who recorded his industry
methods. He ultimately became a management theorist with perhaps
the greatest effect of all prior management theorists. 
 Henri Fayol (1841 – 1925)
Fayol is considered the father of Administrative
Management Theory, often called Process Theory or
Structural Theory. 

As a result of this piece of work, Fayol became known for

his Administrative Theory, also known as “Fayolism,” and
as the father of Modern Management.

Fayol completed his most famous works during the Classical

Period of management theory,
WHAT ARE THE FAYOL’s
MANAGEMENT THEORIES?

 The 6 Industrial Activities

 The 5 Functions of Management
 The 14 Principles of Management
THE 5 FUNCTIONS OF
MANAGEMENT by Henri Payol
PLANNING
ORGANIZING
COMMANDING
COORDINATING
CONTROLLING
THE 14 PRINCIPLES OF
MANAGEMENT by Henri Payol
1. DIVISION OF LABOR
 Specialization helps to “produce more
and better work with the same effort” by
reducing “the number of objects to
which attention and effort must be
directed.”
2. AUTHORITY
 “Authority is not to be conceived of apart from responsibility, that is
apart from sanction—reward or penalty—which goes with the
exercise of power”; in other words, having and exercising authority
comes with responsibility and consequences.
 “Useful actions [of personnel] have to be encouraged and their
opposite discouraged.” Any sanction delivered “must take into
account the action itself, the attendant circumstances, and potential
repercussions” and requires “high moral character, impartiality, and
firmness.”
3. DISCIPLINE
 “Obedience, application, energy, behavior, and [the
respecting of agreements]…is absolutely essential for the
smooth running of business.” That being said, “the state of
discipline of any group of people depends essentially on the
worthiness of its leaders”; Fayol states that any problem
with discipline “mostly results from the ineptitude of the
leaders.”
 Agreements between management and personnel should
“be clear and, as far as possible, afford satisfaction to both
sides.”
4. UNIT OF COMMAND
 “For any action whatsoever, an employee should
receive orders from one superior only… Should it
be violated, authority is undermined, discipline is
in jeopardy, order disturbed, and stability
threatened.”
 This principle is emphasized as being especially
important.
5. UNITY OF DIRECTION
 A group of activities with the same objective
should have one plan and one person in
charge. This is “essential to unity of action,
coordination of strength, and focusing of
effort.”
6. SUBORTDINATION OF
INDIVIDUAL INTEREST
 Everyone should work in the combined best
interests of everyone involved rather than in their
own best interests.
 Managers can influence positive behavior through:
“firmness and good example,” “agreements as fair
as is possible,” and “constant supervision.”
7. REMUNERATION
 Remuneration is dependent on a number of
factors, but “it should be fair and, as far as is
possible, afford satisfaction both to the
personnel and firm.”
8. CENTRALIZATION
 The question of centralization or
decentralization…is a matter of finding the
optimum degree for the particular
[decision/task]” and the capacity and/or
preferences of the manager.
9. LINE OF AUTHORITY
 Authority should move from the top down in order to
maintain unity of command, but lateral communication is
possible if superiors are aware of and support it.
 The line of authority should be as short as possible.
 “It is an error to depart needlessly from the line of
authority, but it is an even greater one to keep to it when
detriment to the business ensues.”
10. ORDER
 Materials must have “a place appointed for each thing and
each thing must be in its appointed place.” Places should
also be “suitably arranged” and “well chosen.” This is to
avoid “useless handling, lost time, [and] risk of mistakes.”
 In addition, there should be “an appointed place for every
employee” and each employee is suitable for their place.
 Charts or plans are recommended in order to organize
materials and people.
11. EQUITY
 Managers should “strive to instill [a] sense of
equity” throughout their chain of command
and use “equity and equality of treatment”
when dealing with employees.
12. STABILITY OF
TENURE
 “Instability of tenure is at one and the same time
cause and effect of bad running.” In the case of
personnel, they should be in a position long
enough to have time to “render worthwhile
service”; if not, “the work will never be properly
done.” But, like all other principles, it’s “a
question of proportion”; tenure can also be too
long.
13. INIATIVE
 “It is essential to encourage and develop
[initiative],” but to also ensure “respect for
authority and for discipline.” “Other things being
equal…a manager able to permit the exercise of
initiative on the part of subordinates is infinitely
superior to one who cannot do so
14. ESPIRIT DE
CORPS
 “Harmony, union among the personnel
of a concern, is great strength in that
concern” and “effort…should be made
to establish it.”
THE ADMINISTRATIVE
THEORY
Classical Public
Administration
 Classical administration theory centers around
the division of labor. This theoretical approach
defines “modernity” as the increasing
specialization of labor. This means that a central
bureaucracy must exist that keeps these functions
coordinated and connected through an impersonal
chain of command.
New Public Management

 New Public Management or NPM is an approach

that seeks to build an administration by
implementing flexibility, transparency, minimum
government, de-bureaucratization,
decentralization, the market orientation of public
services, and privatization.
Post Modern Administration

 Postmodern public administration theory is the

antithesis of positivism and the logic of objective
social science. Particularism in postmodernity is
overly preoccupied with efficiency, leadership,
management, and organization.
HOW DO FAYOL’S
MANAGEMENT THEORIES
APPLY TO LEADERS TODAY?
 In any case, it includes a few gems that can be used as
checklists, like the four components of planning (goal,
action, stages, and methods). The same can be said about
Fayol’s 14 Principles of Management.
 Otherwise, on the subject of applicability, many people
have argued that Fayol’s approach is cold and mechanistic.
However, I’d argue the opposite, and especially so for his
time. Throughout his work, one should note that he:
considers multiple perspectives; recommends the
empowerment of and “kindliness” and fairness towards
personnel; and often prescribes flexibility in approaches.
 Also, remember that he was talking about the
broader subject of Management as opposed to the
specific subject of Leadership; that is, I’d argue
that Management tends to be less sympathetic,
comparatively cold, and calculated, while
Leadership is more sympathetic, warm, and
considerate. Regardless, if you consider his work
in its entirety and remember that it was translated
from another language many years ago, I believe
you’ll have a more favorable perspective.
 So, altogether, Fayol’s management theories
definitely still apply as-is and are excellent
reminders of the duties that come with the
Management function. If you haven’t read about
them before, it might help to go through them
again and consider things from your current
position or the perspective of the subject of a case
study. That way, you can get a better understanding
of management as a function and the leader’s role
within it.
ONGOING IMPACT OF HENRI
FAYOL’S MANAGEMENT
THEORIES
As a result of his contributions to
Administrative Theory, Henri
Fayol is still regarded as one of the
most important management
thinkers of all time.
Clearly, this is well deserved as his
theories have stood the test of time
and influenced well-regarded
developments since.
Therefore, Fayolism is a great subject
of study and worth keeping around as
management reference material.
WHO ARE THE MAJOR
CONTRIBUTORS TO THE
ADMINISTRATIVE THEORY
Max Weber (1864-1920) - Weber is credited with
developing Bureaucracy Theory. This theory was
a contemporary of Scientific and pre-dated
Administrative Management theory. As such, we
discuss Webers work as a section of Management
Theory.
James D. Mooney (1884-1957): Mooney
contributed to administrative management theory
through is book, Onward Industry! (1931), later
republished as The Principles of Organization. In
his text, he applied administrative management
theory to organizations in various domestic and
international contexts.
Luther H. Gulick (1892-1993): Gulick was a
physician, administrator, and health educator. He
applied administrative management theory
principles to government and private
organizations.
George Terry (1909-1979) - Terry published the
first text entitled, Principles of Management. He
adopted Fayols Functions framework. He
combined commanding and controlling into
actualizing. He defined a principle as a
fundamental statement providing a guide to action
to be applied through scientific methods.
Harold Koontz (1909-1984) - Koontz
approached management theory through the lens
of Human Relations within the organization. He
advocated treating employees tactfully as a
management approach within the organization. He
co-authored the book Principles of Management
with Cyril J. O'Donnell.
Cyril O'Donnell (1900-1976) - As a theorist,
professor, and consultant, he published
management papers and his text with Harold
Koontz defining management as a combination of
functions.
Ralph Davis (1894-1960) - Davis was an
academic and consultant who expanded upon
Fayol's management functions model. He
published a text, The Fundamentals of Top
Management (1951), in which he introduced a
rational-planning perspective to Fayols model. As
such, his impact was primarily in the field of
management strategy.
Henri Mintzberg (1939 - Present) - Mintzberg is
a modern-era theorist who critiqued Fayol's work
as incomplete and impractical. He expanded upon
the P-O-L-C framework by focusing on the roles
that managers assume within the organization.
The impact of his work has been substantial and is
discussed as a separate section of Classical
Management Theory.
Robert L. Katz (1933- 2010) - Katz expanded
upon the functions of managers by addressing the
individual's skills that managers must possess at
various levels within the organization. This work
spanned scientific and administrative theory as is
discussed as a separate section of classical
management theory.
ANSWER KEY
1.D
2.D
3.C
4.D
5.C
ANSWER KEY
6. Process Theory or Structural Theory
7. Harold Koontz
8. Father of Administrative Management
Theory or Father of Modern Management.
9. (1841-1925)
10. Max Weber