What is Administrative Management Theory?
Henry Fayol, a French Industrialist and a Mining Engineer by profession developed the theory of administrative management. This theory concerns the comprehensive conceptual framework, general organization, and management that are applicable in all organizations. This theory argued that for the achievement of organizational goals there should be proper management of departments, works should be classified into different groups so that the tasks can be done effectively.
Administrative management is also known as modern management. In 1916 Fayol published his book “administration industrielle et. general”. Later on, this book was translated into English version as “General and Industrial Management.”
This concept is a contemporary of Taylor’s scientific management. Scientific management only concentrates on shop floor levels like job design and payment of workers whereas administrative theory is concerned with the entire range of managerial performance. Fayol suggests that management involves many functions like forecasting, planning, organizing, commanding, coordinating, and controlling.
Another difference, administrative management theory mainly focuses on improving the efficiency of management so that lower-level employees understand properly and the tasks can be done in a standardized way. Whereas, the scientific management theory, first focuses on improving the efficiency of operations level employees/ workers which can lead to improving management later. So, comparing, administrative theory follows the top-to-bottom level management whereas scientific management theory follows the bottom-to-top approach of management.
Henry Fayol divided all industrial activities into six groups, they are:
Technical Activities. Technical activities include the production and manufacturing of the products in the business firm.
Commercial Activities. Commercial activities include buying and selling of products and also exchanging.
Financial Activities. Financial activities include the searching, collection of funds, and optimum utilization of collected funds.
Security Activities. Security activities include the protection of property and people in the organization.
Accounting Activities. Accounting activities include stock-taking, cost statistics, and balance sheet making.
Managerial Activities. Managerial activities include planning, organizing, commanding, coordinating, and controlling.
He developed the 14 principles of management which are universally applicable in all types of organizations on the basis of his experiences and investigations. They are as follows;
14 Principles of Management
- Division of Work
- Authority and Responsibility
- Unity of Command
- Unity of Direction
- Subordination of Individual Interest to General Interest
- Remuneration of Personnel
- Centralization and Decentralization
- Scalar Chain
- Stability of Tenure
- Esprit De Corps
For a detailed explanation of the above principles, please follow 14 Principles of Management By Henry Fayol
Contribution of Administrative Management Theory
Major contributions of the administrative theory are given below:
- This administrative theory laid the foundation for the study of management functions of planning, organizing, staffing, directing, and controlling.
- This theory has provided a conceptual framework for analyzing the management process.
- Introduced the universally applicable principles of management
- It serves as the guide to modern management.
Limitation of Administrative Theory
Some limitations of administrative management theory are as follows:
- The administrative theory has not paid proper attention to the human behavioral aspects in the organization.
- This theory has not concerned the situational factors. So it is inconsistent.
- It is vague. There is no clear distinction between the structure and process of an organization.