Sunday 4 December 2016

Theories of Management by Fayol, Taylor & Peter Drucker

Henri Fayol

The Frenchman, Henri Fayol, trained as a mining engineer but moved rapidly up the management hierarchy becoming seen as a successful manager. He believed that management is a science which can be taught and argued that there are six basic business activities: technical, commercial, financial, security, accounting and managerial. He divided managerial activities into five: planning, organising, commanding, coordinating and controlling. His fourteen ‘principles of management’ are:

Division of labour                                    Centralisation
Authority                                                  Hierarchy
Discipline                                                 Order
Unity of command                                   Equity
Unity of direction                                     Stability of staff
Subordination of individual interest         Initiative
Remuneration                                          Esprit de corps

Fayol believed that organisations could have a single purpose and that they operated in relatively stable environments in which a particular organisational structure could survive for many years. He believed in a centralised, hierarchical model of organisational relationships in which good managers ensured that staff were treated fairly in return for their commitment to organisational goals. This follows logically from his belief in a single purpose for the organisation and, in some ways, he was ahead of his time in suggesting that the ‘right’ relationships between management and staff are essential for the success of an organisation.

F.W Taylor

Taylor's approach is also often referred to, as Taylor's Principles, or frequently disparagingly, as Taylorism. Taylor's scientific management consisted of four principles:

1. Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
2. Scientifically select, train, and develop each employee rather than passively leaving them to train themselves.
3. Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task.
4. Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.
Taylor had very precise ideas about how to introduce his system. It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.

Peter Drucker

Drucker identifies three broad types of production each of which needs a different type of organisation:

• unique product production — in which articles are produced individually — needs centralisation and specialisation;
• mass production — in which many articles are produced simultaneously — requires a high degree of coordination but not necessarily centralisation;
• process production — in which products are produced via a continuous process (e.g. an oil refinery or a nuclear power plant) — requires a decentralised structure.

Drucker argues for a minimum of hierarchy, decentralisation wherever possible and decisions to be taken as far down an organisation as possible. He also argues that productivity can only be improved through human resourcefulness, that, to liberate that resourcefulness, people must be encouraged to use their brains productively and that they will only do that if that are given the freedom to develop their own ideas about how to carry on the business of the organisation.
So each manager must set her/his own objectives related to the organisation’s overall aims which his/her boss will help her/him to achieve. Their manager will do this primarily through clarifying how they will meet the organisation’s overall aims and supplying the information the manager needs to chart his/her progress and to make any adjustments that may be necessary to achieve those objectives. Each manager then does the same for her/his subordinates.

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