Startup: Making the First move

Startup 101: The Man Behind Successful Business Management

One of the greatest secrets to business success is following the right management techniques and creating a seamless process for maximum productivity. Who is Henri Fayol and how did he come about the 14 principles of management that is still widely followed by the greatest businesses of today?

The early 1900s saw the boom of large industrial businesses that had little management tools, models, and methods available for the rising era of entrepreneurs. Scientists, not businessmen, were the first inventors of management resources and studies. From these groups of innovators was Henri Fayol, whose work on management studies still remain relevant today.

Henri Fayol, founder of the modern management method

Henri Fayol (b. 1841 – d. 1925) graduated from the French mining academy “École Nationale Supérieure des Mines.” He was the son of a well-off French military engineer. At the age of nineteen, fresh after college, he was hand-picked to be Stéphane Mony’s protégé. Mony was the Director of the mining company “Compagnie de Commentry-Fourchambault-Decazeville”. Under Mony, Fayol entered the company as mining engineer and trainee manager. From there, he went on to succeed his mentor as company director in 1888 at the age of 48. Under him, the company employed a thousand workers.

He made plenty of scientific progress during his earlier time in the mines. When he became company director, his efforts went to improve its work conditions. As a result, more mines went to his care. Just two years later, 50-year old Fayol became a member of the Comité Central des Houillères de France and member of the board of the Comité des forges while holding the position of administrator for the entire company.

The board was deciding to abandon its iron and steel business and the coal mines when they promoted Fayol as managing director. With the company facing insolvency, he set to work on a plan to restore the firm. By the time of his retirement in 1918, the company was back with a vengeance. It was already one of the largest industrial combines in Europe.

This was where he based his book Administration Industrielle et Générale (1916), the French equivalent of Frederick Winslow Taylor’s Principles of Scientific Management. From this book came his three major contributions: the distinction between technical and managerial skill, the major functions of management (now considered main management processes), and the 14 principles of management. His life’s work and legacy remain relevant for organizations today.

Henri Fayol

Henri Fayol’s impact on modern management.

Aside from Fayol’s three major contributions, he also distinguished the six common or general activities for any industrial enterprise: technical, commercial, financial, security, accounting and managerial. Although there are many differences in these functions of business, he offers a generalized guideline that can be applied for any type of business and organization. His work focuses on the relationship between the manager and the rest of the team.

Administrative and Scientific Combination of Business Strategy

This is what compliments Fayol’s work with fellow Father of Modern Management, Frederick Winslow Taylor. Taylor’s scientific management approach studies how to make employees more efficient, working from the ground up. Fayol focuses on the organization, its structure and its leaders, working from the top, down. The combination of the studies still works well for businesses today. Together, their works offer the perspectives of the two sides of the spectrum.

Business Hierarchical Structure and Decentralization

Hierarchies in the manufacturing business may be common, but Henri Fayol was the first to recognize the structure as a key element for organizations to work. The enterprise frameworks may be a lot flatter today than it had been in Fayol’s time, but it was Henri who pushed for the right balance of centralization and decentralization in business decision-making. He marks the degree depending on the nature of the work. As such, today’s modern workforce in the information age leans towards a decentralized business environment. Supporting this, Fayol had initially advised for workers to be more informed to be better involved, recognizing them as a key element in unlocking insights into the secrets of getting the job done.

Improvements on Work Culture and Environment

Employees are now given more freedom to own and take responsibility for their part in the bigger scheme of their company. This hasn’t always been the case. When Fayol came along, he recognized the value of each individual contributor in the business and how their efficiency can be affected by multiple factors in the work environment. Along with Fayol’s arguments are the case for work communication, employee engagement, clean workplaces, fair treatment, freedom to take initiative, job stability, and positive work culture. These may all sound generous, but it does pay a better return on investment for employers.

Other Influences and Modern Adaptations

There are many other guidelines drawn out from Henri Fayol’s classical management instruction manual that we have adapted to modern needs. Fayol’s emphasis on work specialization has now given way for generalization. Managers give workers more responsibility to keep them challenged, engaged, and to cut costs. A worker of today is also answerable to multiple bosses, which is contradictory to Fayol’s principle of unity of command. Discipline is less formal, too. But still, there are some things that would never change. No matter how far we have come, the fundamental design of organized work as an effort of multiple people banding together for a common cause has not changed in this modern era. There is still this self-denying notion for “One for all, and all for one” essential for every work community.

How are YOU handling YOUR business?

If you believe you are in need of a business consultation, look no further. Anderson Group BPO, Inc. business solutions services provider is here to help! Let your business reach its full potential by adopting a seamless process. Reach out to us to find out how we could help you.

Paulo Salud

Business Development Manager


Anderson Group BPO, Inc.

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