Fayol’s 14 principles derive from the circumstance that Fayol felt that management was not well defined. In his striving to change this circumstance he suggested “some generalized teaching of management” to be a main part of every curriculum at places of higher education and even beginning in “primary schools” . Fayol’s dedication to this idea is demonstrated by the fact that after retirement he went on to not just write books about management ideas, but more importantly, he found the Centre For Administrative Studies (CAS) in 1917 in Paris . The CAS mainly functioned as a centre of discussion between professionals from a large variety of professions, in order to further the ...view middle of the document...
An example of this fact can come from early industrialization, namely the Ford motor company , where Taylor’s system of a scientific approach was applied. Taylor was interested in skill development by means of standardization and functional specialization . One worker would assemble the dashboard, another would assemble the wheels, and yet another would paint the exterior. The effects of this are well known and lead to Ford becoming not just the predominant car maker but also the inventor of the conveyer-belt production system- revolutionizing many industries.
However, one could argue that extremes of division of work could lead to undesired effects. Division of labor can ultimately reduce productivity and increase costs to produce units. Several reasons as causes for reduction in productivity can be thought of. For example, productivity can suffer when workers become bored with the constant repetition of a task. Additionally, productivity can be affected when workers lose pride in their work because they are not producing an entire product they can identify as their own work.
Douglas M. McGregor for instance cautions that “people, deprived of opportunities to satisfy at work the needs which are now important to them, behave…with indolence, passivity,…lack of responsibility,…unreasonable demands for economic benefits” . This circumstance was probably well recognized by Fayol, when he states that the “division of work has its limits which experience and a sense of proportion teach us may not be exceeded” . In more recent years management thinkers have recognized and addressed this issue more intensely, as will be discussed further below.
Principle 2: Authority and Responsibility
Fayol defines authority as the “right to give orders”, but he emphasizes that responsibility arises with it . He “demands high moral character, impartiality and firmness.” Fayol thinks of responsibility as something that is “feared as much as authority is sought after”. This fear, he explains can lead to a paralysis and must be counter-acted by personal integrity and a “particularly high moral character”. These qualities may be rewarded monetarily, Fayol argues.
Fayol himself apparently has not merely preached high morals but lived them too, when in the position of a CEO . He for example purchased no shares in Commentry-Fourchambault, where he served, in order to avoid a dependence on the board, so he could subordinate his interests to the common good .
When looking at these standards, Fayol arguably should be followed as a leading example. In the light of current developments in regards to the financial crisis of the year 2009 and onwards, one notices a discrepancy between today’s leadership moral and Fayol’s demands.
The current debate about the reasons for the break down of banks following the financial crisis points in the direction of a lack of such high standards. In the banking business, management rewards itself with company shares-...