Management Definition Theory And Practice Commerce Essay

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Management is no doubt a way of life as resources either natural or artificial need to be organised and fully utilised in other to achieve a particular task. Everything has a beginning, just like the world had a beginning which was created by God and well managed by Him. In turn, He created humans as His tool to be in charge and manage these resources on earth. Since the beginning of civilization, several schools of thought in management have been propagated, each contributing a unique perspective to the art of managing and achieving organisational objectives.

The different types of model theory includes the Scientific Approach by Fredrick Winslow Taylor, Classical approach by Henri Fayol, Human Relation and Social Psychological School by Elton Mayo, May Parker Follett, Maslow's hierarchy of needs, McGregor, System and Contingency approach by Lawrence and Lorsch, Burns and Stalker, Joan Woodward Modern approach, contingency approaches to management to mention but a few (Cole and Phil, 2011).

In the 21st Century, every country constituted Professional Institutes for Management such as Chartered Management Institute (CMI) of the United Kingdom, Nigeria Institute of Management (NIM), Management Institute of Canada (MIC), American Institute of Management (AIM) etc to refine the ideology of these model theories and make organisation more functional and flexible even as we advance in technology. It is important to note that Management is the highest functional discipline in any business or professionally focused organisations in the world. In the world today, certain economy and social policies will have a ripple effect on the management decisions or planning pattern. An example of such management decision that affected millions of people in the world was the massive blow of the recession in 2007 as a result of a failure of financial management in some of the biggest banks in America. (RoseIndia.net, 2012).

This study tends to critically analysis the Classical School of Management Thought amongst other Management theoriest which was developed by Henri Fayol and view his theory to Management practice.

2.0 Management: Definition, Theory and Practice

2.1 Definition

According to Mary Parker Follett, "management is the act of doing work done by other people". (trivedi, 2012). In other words, management is the acitivity of getting things done with the aid of people, money, materials and other resources in the best possible way to acheive a desire goal. In management, people are what are used to get any result though humans generally are very difficult to manage. Organisational management is about having someone in charge to control, staff, direct and motivate etc using peoples efforts to acheive a given task. This what makes a person a good manager as David and Steve (2011) defines the attribute of a good manager as someone who gets things done with the aid of people, money, materials and other resources in the best possible way to acheive a desire goal. Pettinger (2007) states further that good managers are commited and dedicated operators; highly trained and educated; with excellent analytical and critical faculties. The characteristics required for a good manager includes; Ambition, energy, great commitment, self-motivation, job, product and service knowledge, drive and enthusaiasm, creativity and imagination, thirst for knowledge, continuous professional development and the likes.

2.2 Theory

This study is streamlined to Classical Management School of Thought which was propagated by Henri Fayol. He is recognised as the founding father of this theory because he documented this managerial function that helped him to the top during his entire working life. Henri Fayol, the French Industrialist started his career as a minning engineer. He rose to the top of the company and retired at the age of seventy-seven years. The company he headed grew and prospered under his leadership and his success gave him fame and popularity. According to Urwick, Fayol's success as a leader made him spend his entire time popularizing and publishing his theories of administration and founding the Centre of Administrative Studies. This lead to the publication of Fayol's book on Management in 1916, Administration Industrielle et Generale which was translated by Storr and was titled General and Industrial Management (Mildred and Sonia, 2010).

Fayol's book forms the bases of organisational management and the principles espoused in the book can be applied to any industry or sector. Cole and Phil (2011); Lee and Philip (2005) reiterated Fayols belief as stated in his book, important activities an organisation should perform. He outlined these activities as; technical activities, commercial activities, financial activities, securities activities, accounting activities, managerial activities.

Fayol further explained that the aforementioned activities can not be actualised without observing the some management process which includes; forcasting and planning, organizing, commanding, co-ordinating and controlling(Cole and Phil, 2011). These functions are what Fayol expects managers to perform alongside the organisation's core activities.

Certain principles were applied by Fayol which made him a successful manager. These fourteen (14) principles are still adopted by today's contemporary organisations. He noted that these principles do not need to be strictly adhere to since organisations and business have uniquely different goals and objectives, but it can guild an organisation pattern it's goal and oblectives (Cole and Phil, 2011; Lee and Philip, 2005 ). These principles are stated below in fig 1.

Management Priniciples developed by Henri Fayols

DIVISION OF WORK

AUTHORITY

DISCIPLINE

UNITY OF COMMAND

UNITY OF DIRECTION

SUBORDINATION OF INDIVIDUAL INTEREST TO THE GENERAL INTEREST

REMUIRATION

CENTRALIZATION

(DECENTRALIZATION)

SCALAR CHAIN

ORDER

EQUITY

STABILITY OF TENURE OF PERSONNEL

INITIATIVE

ESPIRIT DE CORPSWork should be divided among individuals and groups to ensure that effort and attention are focused on special portions of task..

Authority as defined by Fayol is the right to give orders and the power to exact obedience.

Penalties should be applied judiciously and strictly yo encourage this common effort.

Workers should receive orders from only the person in charge.

The entire organization should be moving towards a common abjective in a common direction.

The interests of one person should not take priority over the interests of the organization as a whole

.

Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker's rate of pay.

Fayol defined centralization as lowering the importance of subordinate role. Decentralization os increasing the importance.

The line of authority from top to the bottom. Managers in hierarchies are part of a chain like authority scales.

For the sake of efficiency and co-ordination, all materials and people related to a specific kind of work should be used and put in the right place.

All employees should be treated as qually as possible.

Retaining productive employees should always be a high priority of management.

Management should take steps to encourage worker initiative, which is defined as new work activity untaken through self direction.

Management should encourage harmony and general good feelings among emloyees.

Fig 1: Henri Fayol's Fourteen (14) Principles of Management as adopted from Management Inovation (2008)

According to Cole and Phil (2011) ; Michael (2000), ''Fayol was the first to acheive a genuine theory of management because of the number of principles'' he implemented which can be adapted for any organizational structure. This was further butressed by Daniel et.al. (2002) stating that Fayol had been technically inclined and a successful engineer. It was not his technical skills that made him a successful manager but the administrative skills he exibited in working with and managing others.

Fayol also noted that managers should have the ability to communicated with externalities to make the company functional (Daniel et.al, 2002). For example, for an electrical engineer consultants to function effectively, they should have a little knowledge of other fields such as drafting and reviewing of contract agreement which will enable him enter a contract to provide electrical engineering services. He also needs to display competence in the area of pricing in preparation of Bills of Quantities(B.O.Q). From Fayol's observation and understanding of managerial skills which he gained during the years as a manager,decided to articulate his findings which he transmitted into writting and called the book General and Industrial Management and all that was said in the book is ''very familiar to comtemporary knowledge management practitioners'' (Lee and Philip, 2005).

A typical project management organisation with construction as their core business can be used to illustrate the theory as propagated by Henri Fayol. There are different parties to the construction of a project such as the client, financier, consultants (architect, m&e and civil engineers, quantity surveyor), contractors (builder, engineers), sub-contractors etc. They must be managed to achieve the goals of the client. The project manager must understand his client and transmit the need of the client to the project team undiluted. To provide the best service with respect to quality, time and cost, the project manager must understand all parties to the project including stakeholders, planners etc and use an admistrative style that would make the project team work effectively and efficiently.

This aforementioned example is likened to all what Fayol propagated after his experience as a Manager. The Organisation Structure of a typical Project Team as seen below in fig 2.

Project

Cost

Fig 2: Adapted From Phil Lambourne (2012)

P

2.3 Practice

As earlier mentioned, there are different theories of management such as the scientific approach, human relation and social psychological school, system and contingency approach, modern approach and the likes save for the classical theory which is the purpose for this study. The classical management school of thought viewed management of an organisation in another dimension, which is undoubtedly very useful in organisational practice of the 21st Century.

According to Cole and Phil (2011), the Human Relation and Social Psychological School dealt more on human motivation, group relationship and leadership style. This was simplified further by Elton Mayo (1880-1949) and Mary Parker Follett (1868-1933) who observed that the physical condition (improved or worsened) does not have any effect on the rate of productivity (output) of workers. This was termed the Hawthorne Effect. Also, Follett advocated that individuals should make use of their inert potentials to solve organisational issues and accept personal responsibilities of their results. She also stated that issues should not be left for management to resolve but also individuals should be involved as this facilitates the ''growth of individuals and the organisation to which they belong" (David, 2008. p. 55).

According to Cole and Phil (2011), Burns and Stalker categorised such management structure by Follett as an organic system. Unlike Fayol's Classical School of thought which was bureaucratic and relatively a mechanistic system in nature. Follett system of management was more flexible in nature. A situation were people will be given the liberty to solve organisation issue and accept responsibilities for their action may bring a negative effect on the organisation if their results are not making any positive change or improvement to the organisation

In Fayol's theory, due to the bureaucratic nature of his principles, workers in the lower hierarchy of an organisation might get diluted information or nothing from the management in the case of resolving issues (Cole and Phil, 2011). Follett views this aspect of management technique as not helping both individuals and also the organisation to grow . She opined that when people are involved with management in resolving issues of the organisation, they may make inputs that would be helpful and they see themselves as being part of the organisation as they will be motivated to work for the organisation. She termed this management style as integration(Lee and Philip, 2005). This approach of management by Follett is very important but will only be realistic for small organisations. For big organisations with large number of staffs, Folletts management partten for this senario will be unrealistic

According to Daniel et.al, (2002) Fayol success as a manager with his administrative skills was not because he was a successful Engineer. He reiterated that Fayol was not taught the act of administration but was a skill he trainned himself to acquired beacuse of the people and the resources he has to manage as a manager. Stuart (2003) postulated Daniel et. al, (2002) view but also stated management techniques acquired through formal education could be universally applied in any organisation structure. This he further buttressed as the existence of Chief Executive Offiers (CEO). CEOs, in his view can practice the managerial skill acquired through education in any organisation. Fayol's principles of management were more or less bureaucratic (mechanistic system) but management skills acquired through education has made it more flexible with the introduction of technological tools in order to operate in any organisation owing to the fact that management is likened to be a Profession. Also, as regards to socio-economic performance of an organisation, there should be some degree of flexibility in the management methods of an organisation structure when there is need for improvement (Veronique and Oliver, 2003). When it is certain that an organisation needs to improve financially, the structure must allow for a change and adaptation irrespective of it's rigidity.

This further shows the significant of Fayol's theory by Stuart (2003) to contemporary management as it was noted by Mildred and Sonia (2010) that the relevance of Fayol's theory disminished when compared to Taylor's theory. Fayol's theory is still very much in use in the 21st century. For instance is the typical structure of a university where you have a bureaucratic structure with the Chancellor, Vice-chancellor, Deputy-chancellor (Academics and Administration), Register, Busar Dean, Sub-dean, Heads of Department and the likes. Lee and Philip (2005) supported Fayol's theory as very relevant in the 21st Century as " he is commonly understood by comtemporary writers, and students of management theory".

3.0 Conclusion

Henri Fayol contribution to management has seen the light of the day even in the 21st Century as described in this study. Cole and Phil (2011) akined Urwick view of Fayols principles of management as the only way that modern man could control his social organisations to achieve the organisation objectives effectively.

Fayol's functions and principles of management forms the basis of many organisation;s structure and serve as theoritical background upon which later writers on management based their theories, that is modifying and adapting Fayol to changing business evironment. In simple words, later management theories boils down to Fayol's management principles. This is why Fayol was seen to be the founding father of management theory.

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