General administrative theory

General administrative theory is a set of 14 principles of management, as set forth by Henri Fayol, a French mining engineer and executive. He believed that the following principles could be applied to any business:

  • Division of work. By having employees specialize in just a few tasks, they can become much more efficient than having employees engage in every possible task. Though quite correct, this principle resulted in deeply uninteresting jobs; employers have subsequently added back tasks to make jobs more interesting.

  • Authority. Managers must be vested with authority, which gives them the right to give orders. This principle has held up, though a general trend toward pushing decision making deep down in the organization has shifted authority to more and more people.

  • Discipline. Employees must obey the governing rules of the organization. This principle is still true and remains relevant.

  • Unity of command. Each employee should only receive orders from one supervisor. This principle has largely held up, though matrix organizations involve the use of two supervisors. Also, teams are more likely to operate with reduced levels of supervision, instead tackling issues as a group.

  • Unity of direction. There should be one plan of action to guide employees. This principle is inherently obvious; there cannot be multiple, possibly conflicting plans tugging employees in different directions.

  • Subordination of individuals to the group. The interests of a single employee do not override those of the entire organization. If this principle were to be violated, employees could refuse to work on essential but uninteresting tasks.

  • Remuneration. Employees must be paid a fair wage. Though obvious, this principle points out that employees will work harder if they are properly compensated for their work. Subsequent research has found that remuneration only forms a part of the rewards that employees tend to value.

  • Centralization. The amount of decision making should be properly balanced throughout the organization, and not just at the top. This was a quite forward-thinking principle, and foreshadowed the ongoing trend to empower employees well down in the organizational structure.

  • Scalar chain. There should be a direct line of authority from the top of the corporate hierarchy to the bottom, so that any employee can contact a manager in the line of authority if an issue arises that needs a decision. This concept is still largely operable.

  • Order. Employees must have the correct resources available to complete their jobs properly, which includes a safe and clean workplace. Managers still spend an enormous amount of their time ensuring that resources are properly organized.

  • Equity. Employees should be treated fairly and well. This statement was forward-thinking when it was first promulgated, and has become more relevant as the value of retaining top-grade employees has become more of a concern.

  • Stability of tenure. There should be minimal employee turnover, which can be assisted by proper personnel planning, so that new hires can be brought in in an orderly manner.

  • Initiative. Employees should be allowed to express their ideas, which make them more involved in the organization and increase the competitiveness of the business.

  • Esprit de corps. Managers should continually try to improve employee morale, which enhances the mutual trust of employees and creates a more harmonious workplace.

Nearly all of these principles appear to be painfully obvious today, but were considered quite leading-edge when they were developed in the late 1800s.

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