Henri Fayol and Living the Good Life

I continue my story about living the good life. The good life appears to be shrouded in mystery, particularly in the business world. It seems that only managers experience this joy on account of the employees’ toil. I focus on Henri Fayol (1841-1925), one of the early management pioneers, and the concept of living the good life. Henri Fayol reminds us that the management pioneers were concerned about the well-being of employees. They recognized that flourishing employees were pivotal to organizational success. This fact starkly contrasts with the stubbornly persistent popular notion that management is (a) associated with mundane activities and (b) commensurate with immoral behavior, such as trickery and deceitful devices to manipulate employees into submission. This blog explores how management pioneers, particularly Fayol, remain relevant today, despite the prevalence of antediluvian thinking. This blog encourages contemporary managers to follow the pioneering path to organizational success, one that nurtures flourishing employees.

Henri Fayol¹

Fayol was a management pioneer and known for ‘Administration Industrielle et Générale,’ published in 1916 in French. The English translation by Constance Storrs (1949) made his work accessible to American audiences, in particular. The translated title is “General and Industrial Management.” There was considerable debate about the word “management,”as the French word “administration” lacks an exact English equivalent. After much discussion, it was concluded that the word “management” was appropriate to use. This decision was based on the contents of Fayol’s script, which coincided with the activity described in English as “management.” However, the term management was somewhat loosely used at the time.

Fayol documented his years of study and experience in this script. By training, Fayol was a mining engineer, having graduated from the National Schools of Mines at St. Étienne. He started his career in 1860 at the Commentry Group. He occupied various positions at the company until his retirement. He was promoted to Managing Director in 1888. At this time, the company was failing. However, as Managing Director, with his sound guidance and support from exceptional employees, he steered the company to economic success. He retired in 1918 as Managing Director of the prospering company, which had an outstanding core of employees. He remained on the Board of Directors until his death in 1925. Fayol credited his success to the relentless application of certain principles, rather than personal qualities, of which he had many exceptional ones.

Fayol’s Theory of Administration (General Management)

Fayol’s work focused on General Management at the strategic level of an organization as a function. His work was complementary to that of F.W. Taylor, which focused on the operational level of the organization. Both Fayol and Taylor realized that employees and their management, at all organizational hierarchical levels, are key to organizational success.

The availability of accurate information is foundational to Fayol’s theory. Information underpins the proper discharge of all management activities. Additionally, knowledge of the subject matter of management is imperative for success. Fayol maintained that all organizations generate activities, which can be classified into six interdependent groups, namely:

• Technical – production, manufacturing, adaptation
• Commercial – buying, selling, exchanging
• Financial – search and optimum use of capital
• Security – protection of property and personnel
• Accounting – bookkeeping
• Managerial – planning, organizing, commanding, coordinating, and controlling.

Fayol noted that management activities differ from the other groups of activities because they focus on people. Furthermore, the elements of the managerial function are interrelated. Briefly, the management function is concerned with (a) foreseeing the future and simultaneously preparing action plans for the total organization to realize the future (i.e., planning), (b) staffing the organization with the right person in the right position to execute the plan judiciously (i.e., organizing), (c) unifying and harmonizing all efforts throughout the organization aligned with its purpose (i.e., coordinating), (d) inspiring action towards realizing the purpose of the organization (i.e., commanding), and (e) monitoring to ensure the organizational purpose is attained (i.e., controlling). Additionally, managerial activities are supported by 14 intertwined general management principles that facilitate adaptation to changing conditions. In short, these principles are:

(a) Division of work that aims to enhance productivity by making the best use of employees’ competence. (b) Authority and responsibility that are inseparable – responsibility arises with the exercise of authority. Authority, whether positional or personal, refers to the right to issue instructions and orders, as well as the power to enforce compliance, accompanied by appropriate sanctions. (c) Discipline means obtaining the cooperation of employees and respect according to the agreements between the organization and its members. Discipline depends on the worthiness of leaders. (d) Unity of command means that employees must receive instructions from only one manager to ensure that authority is not undermined. (e) Unity of direction means one head and one plan for a group of activities with the same objective to enable cooperation, coordination, and focused effort. (f) Subordination of individual interest to the organization’s interest. (g) Fair remuneration for services rendered, which is satisfactory for both the employee and the organization. Fair remuneration considers both circumstances independent of and dependent on the employer, in addition to the value of the employee. (h) Centralization means that directives, i.e., the plan to realize the future, are given from top management and are the impetus of coordination that galvanizes cooperation. (i) The scalar chain or line of authority is the route followed by all communications that start or go to the ultimate authority. (j) Order refers to a place for everything (material) and everyone (social) and everything and everyone in its proper place, impacting organizing and selection of competent employees. (k) Equity results from kindness and just treatment of employees, which empowers them to execute their duties judiciously. (l) The stability of tenure of employees is the hallmark of a prosperous organization. At the same time, instability is associated with the bad running of the organization, except for involuntary turnover, such as death, retirement, illness, and the like. (m) Initiative refers to thinking out a plan, including the inputs of employees, to ensure its success. Initiative involves weighing the implications of all alternatives to enable responsible choices in developing a thoughtful plan that fosters organizational success. Fayol noted that thinking is a profoundly satisfactory endeavor for both management and employees. (n) Esprit de corps means there is harmony among the employees. Thus, management must endeavor to establish and maintain it. The management element command is of specific interest to living the good life, i.e., human flourishing.

Human flourishing and the managerial element of command

As mentioned, the management element of command concerns inspiring action to realize the organization’s purpose. The purpose of an organization is to (a) offer customer-valued products and services at prices customers are willing to pay without compromising the economic viability of the organization, (b) provide employment opportunities to societal members, and (c) create wealth, which is more than profit maximization². Fayol indicated that command can be treated as either separately or as part of the management function. He chose to include command as part of the management function based on the interdependent nature of the managerial elements as demonstrated here. Command is distributed throughout the organization – every manager at different hierarchical levels is responsible for their respective units, regardless of the units’ size. Managers are responsible for unleashing the potential of each employee. That means ensuring that each employee is the best he/she can be and implies that every employee is a fully functioning person³. Fully functioning persons freely choose to act virtuously and are happy, successful, and flourishing⁴. As indicated in previous blogs, flourishing benefits both individual employees and the organization as a whole.

Fayol’s guidelines for successful command

Fayol maintained that successful command vests in relevant knowledge, skills, and experience, i.e., competence⁵, and is revealed in certain personal qualities, namely:

1. Knowing the purpose of the organization and the commitments of the organization and its employees.

Knowledge of the management element planning is the starting point of every effort in an organization, which allows for the proper execution of the plan. Planning reflects the organizational direction and comprises its purpose expressed in the vision, mission, goals, and guiding values. Knowledge of the organizational purpose is instrumental in aligning key actions with strategic intent, which guarantees organizational success by securing a competitive advantage over rivals⁶. Competitive advantage stems from achieving coordination and cooperation, which is embodied in structural dimensions of organization for implementing strategy^6,8,9. Furthermore, familiarity with the management element planning ensures that every unit pursues the organizational purpose and fulfills its obligations. Thus, knowledge of the organizational purpose and its commitments depends on the management element of planning and is closely tied to several management principles, including (a) unity of command, (b) unity of direction,(c) subordination of personal interest to general interest, and (d) initiative. Pursuing the organizational purpose within its obligations requires particular personal qualities. These include integrity, tact, a sense of duty, and drive within reason. These personal qualities are essential for all guidelines for successful command. These qualities ensure that the manager protects both the employees and the organization from exploitation.

2. A thorough knowledge of employees’ competence.

Deploying suitably competent employees in appropriate positions to execute the organization’s strategy ensures the attainment of its purpose. This act requires managers to know what they can realistically expect from each employee and the degree of confidence the manager can place in their employees. As such, knowledge of employee competence depends on the management element of organizing and is closely tied to several management principles, including (a) division of work, (b) authority and responsibility, (c) discipline, (d) social order, (e) equity, and (f) initiative, to mention a few.

3. Sanctioning employees – reward competence and punish incompetence.

The effective pursuit of an organization’s purpose requires sanctions that reward competence and achievement and punish incompetence. Incompetence refers to an employee’s inability to discharge his/her duties properly. However, managers should assess the reasons for incompetence before sanctioning an employee to ensure just action is taken. For example, if an employee is unable to discharge his/her duties due to changing work requirements, the employee may be retrained or redeployed where his/her competence can be better utilized. The last resort to resolve incompetence, specifically owing to a failure to use one’s competence or obstructing the pursuit of the organizational purpose, is dismissal. Sanctioning employees depends on the management elements of organizing and control and is closely tied to several management principles, including (a) remuneration, (b) social order, and (c) equity.

4. Lead by example.

Managers at all hierarchical levels of the organization have the authority to demand compliance. Therefore, their behavior must be exemplary. Setting a good example is superior to driving employees into compliance through fear. Setting a good example is closely tied to several management principles, including (a) authority and responsibility, (b) discipline, and (c) subordination of individual interest to the general interest.

5. Conduct periodic reviews.

Continuous monitoring activities are essential to ensure that action plans are on track to achieve the organization’s planned future. Information provided by an integrated measurement system is crucial for ensuring the realization of the organization’s future. Conducting periodic reviews or audits depends on the management elements of planning and control. It is closely tied to several management principles, including (a) division of work, (b) authority and responsibility, (c) discipline, (d) unity of direction, (e) order, and (f) equity.

6. Convene regular meetings with employees to ensure unity of direction and integration of effort.

All unit managers should be in touch with reality, which is facilitated by conducting regular meetings. Key employees must attend these meetings. Managers should conduct these meetings with transparency and inclusiveness to ensure organizational success⁷. In these meetings, managers exchange information, receive feedback from key employees, decide on actions, facilitate a shared understanding of what needs to be achieved, and ensure that everyone is clear on their part in executing the decision to ensure success. This guideline for successful command depends on the management element of control and is closely tied to several management principles, including unity of direction.

7. Don’t be a control freak.

Exercising control does not equate to being a control freak. Managers in higher hierarchical positions should not become engrossed in details that subordinates can handle. Instead, managers should concentrate on significant problems while allowing subordinates to address minor issues that they are equipped to handle. In doing so, managers ensure that they utilize resources effectively, especially human resources, while remaining aware of all activities within their unit. This guideline for successful command depends on the management elements of organizing and control and is closely tied to, at least, the management principle of division of work.

8. Inspire employee engagement.

Able managers, at all hierarchical levels of the organization, strengthen unity among employees and cooperation by ensuring that authority is clear and well-defined, jobs are unambiguously designed, and encourage appropriate risk-taking behavior corresponding to the position held in the organization. They also tolerate mistakes that may result from appropriate risk-taking. This guideline for successful command depends on the management elements of organizing and coordination. It is closely tied to several management principles, including (a) division of work, (b) authority and responsibility, (c) discipline, (d) order, (e) equity, (f) initiative, and (g) esprit de corps.

This description of the management element of command suggests it aims to solve the organizing problem, namely, the division of labor and integration of effort. Division of labor entails task division and task allocation, i.e., job design that flows from the organizational direction. Integration of effort involves providing relevant and timely information as well as administering appropriate sanctions to facilitate the realization of the organizational purpose expressed in its direction. The mechanism that solves the organizing problem is structural dimensions of organization for implementing strategy^6,8. This mechanism aligns key actions with strategic intent and accomplishes coordination and cooperation – the crux of competitive advantage^6,9. Competitive advantage means that an organization offers better customer-sought value than its competitors in the chosen markets due to access to resources, specifically competent employees who perform – implement strategy – at their best⁹.

The Figure on the landing page reflects Fayol’s Theory of General Management, which incorporates the concept of command. This Figure encompasses an integrated measurement system that provides information to (a) set the organizational direction, (b) arrange the structural dimensions of organization for implementing strategy, and (c) affect control to safeguard the realization of the organizational direction. This Figure illustrates the interdependent nature of the management elements proposed by Fayol’s Theory of General Management and truly fosters human flourishing.

Parting thoughts

It is unfortunate that the original works of pioneering management scholars are not readily accessible today. This blog contains a fraction of the information from Fayol’s book. The lack of these original works leaves us to rely on the interpretations of others. Some modern interpretations seem to portray management in the same light as the antediluvian notion from the mists of time, which associates management with exploiting employees. However, the origin of these ideas is lost in the fog. On the contrary, the management pioneers had new thoughts on management as they began to question the prevailing asserted truth. I encourage management scholars to rediscover the original works of the pioneers to advance human flourishing and nurture a life well-lived in service of individual employees, organizations, their customers, and society.

References

¹ Based on Fayol, H. General and Industrial Management. Translated by Constance Storrs. Mansfield Centre, CT: Martino Publishing; 1916[2013]. ² Drucker P. The Practice of Management. Oxford: Heinemann; 1954. ³ cf. Kahn WA. Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal. 1990;33(4):692–724. ⁴ cf. Ryan RM, Deci EL. Self-determination Theory: Basic Psychological Needs in Motivation, Development, and Wellness. New York: The Guilford Press; 2017. ⁵ cf. George S. Competence and Competency Frameworks. London: Chartered Institute of Personnel and Development; 2021. ⁶ cf. Nienaber H, McNeill RG. Leadership Diagnostic: Unlocking Human Competence for Effective Strategy Execution. In Matos, F. and Rosa, A. (Eds.). Proceedings of the 18^th European Conference on Leadership, Management and Governance. Reading, UK: Academic Conferences International Limited; 2022:347-356. ⁷ cf. Hautz J, Seidl D, Whittington R. Open strategy: dimensions, dilemmas, dynamics. Long Range Planning.2017;50:298–309. ⁸ cf. Skivington JE, Daft RL. A study of organizational ‘framework’ and ‘process’ modalities for the implementation of business-level strategic decisions. Journal of Management Studies. 1991;28(1):45–68. ⁹ cf. Porter M. Competitive advantage: Creating and Sustaining Superior Performance. New York: The Free Press; 1985.