THE ROOTS OF GENERAL MANAGEMENT

A century ago, in 1916, while WWI was raging, Henri Fayol, who was 75 years old and still at the head of a mining corporation, published his General & industrial management, the 110-page founding book of modern business management.

Five years earlier Frederick Taylor had released his Principles of scientific management. But where Taylor focused on operations’ management, and gave his views of mangement as seen from shopfloor, Fayol concentrated on business management as seen from the general manager.

Henri Fayol's work has had so much impact on the way we manage that he should be known at least as much as Frederick Taylor, if not more.

Born in 1841, Fayol was a French mines’ engineer. Aged 25, six years after having started as an engineer, he became the managing director of the Commentry’s mine, located close to Montluçon, in Allier’s department (Auvergne-Rhône-Alpes region).

In 1888, he became CEO of the parent company and his tenure lasted until 1918. He died seven years later, aged 84.

In his preface, Fayol warns the reader that this book contains only the first 2 out of 4 parts he intended to write about. They are:

• Part I: “Necessity & possibility of teaching management”
• Part II (the core of the book): “Principles & elements of management”

Part III & IV were never published but should have been of great value as they were expected to be:

• Part III: “Personal observations & experience”
• Part IV: “Lessons of the war”

There is no coincidence that management emerged around WWI as Fayol’s paper was released on the same year of Verdun’s battle. Indeed, the efficency of the managerial methods of the Germans in pre-war times shook considerably the status quo of the different colonial empires. The German Empire’s development & aggressivity and the answer the French & British gave to it are directly caused by the evolution of industrial & managerial methods.

The best illustration here is given by Siemens’ raise as a corporation at the turn of the century.

In Part I of his book, Fayol concentrates on the definition of management which he summarizes in 6 activities:

• Technical
• Commercial
• Financial
• Security
• Accounting
• Managerial

Fayol then concentrates on the various abilities and their relative importance, depending on the function or on the size of the business. The essential abilities for Fayol are:

• Physical
• Mental: ability to understand & learn, judgment, mental vigor & adaptability
• Moral: energy, firmness, willingness to accept responsibility, initiative, loyalty, tact, & dignity
• General education: belonging exclusively to the function performed
• Special knowledge: related to the function
• Experience: arising from the work proper

Fayol ends up the first part by writing about teaching “administration”. He believed that the “managerial ability” had to be taught like any technical ability, “first at school, later in the workshop”.

He is a proponent to teaching managerial skills even in the primary school years, with the use of basic concepts.

 In part II of the book, Fayol goes into the details of the 14 principles he gives. They are:

1. Division of work
2. Authority & responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to general interest
7. Remuneration of personnel
8. Centralization
9. Scalar chain (hierarchy)
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Team-spirit

Fayol gives extensive information about the 5 elements of management. They are:

• Planning
• Organizing
• Command
• Coordination
• Control

Some parts have aged a little: nowadays, security has taken a step back compared to the other activities, remuneration of personnel has quite evolved. Yet, Fayol has undeniably set here the basis of administration.

The book is a little too formal and possibly lacks illustrative cases. This is due to the fact that it is only half of what Fayol intended to write. Indeed, part III should have given us more practical clues to give more flesh to the theory & principles but since a 1916, we now have plenty of examples to look for.

Another main criticism given about the book was its management bias. But it is a misunderstanding and comes from taking account of books to be written decades later. Indeed, apart from the adminisitration theory of which Fayol is a precursor, the social theory, the structural theory, the decision-making theory and many other theories of management were not even conceptualized.

In fact, very little criticism remains, still today.

The book has been translated in English only 30 years later, in 1949, thanks to the support of Lyndall Urwick, a strong influencer, in his time, in management.

Many critical books about management & sociology were only (re-)discovered in the US after WWII, like Max Weber’s Theory of social & economic organization*, also written before 1920 but translated in English in 1947 (in French in 1971).

Fayol’s (& Weber’s) book(s) had a major impact on management key influencers like Chris Argyris, Chester Barnard, Peter Drucker, Douglas McGregor, Henry Mintzberg, Herbert Simon, and many others.

The principles described are still widely used. If you are working in a large corporation, you will find the elements very natural.

I have tried to outline here the book without going, purposedly, into too much detail. It is a thin book so, do yourself a favor, get it and read it as it is still amazingly modern.

*: Weber’s book goes beyond management. It is not an easy reading but it is really well worth the effort. It is clearly one of my favorite.