The Administrative Principles of Management

Topics: Management, Henri Fayol, Corporation Pages: 5 (1748 words) Published: June 12, 2011
The administrative principles of management, created in the early 20th century by French industrialist Henri Fayol, changed the way that many view management. Fayol’s principles focused mainly on the management teams of businesses and helped establish a top to bottom hierarchal system to produce a more structured organization (Brunsson, 2008; Yoo, Lemak, & Choi, 2008; Fells, 2000). This essay will focus on four of the 14 key principles of administrative theory – unity of command, subordination of individual interest for the interest of the organization, esprit de corp. and remuneration – and analyze how they have been applied in a leading New Zealand company, Pumpkin Patch Limited (Ltd.) (Samson & Daft, 2009, p.64; Wren, Bedian, & Breeze, 2002). This essay will argue that although Fayol’s administrative principles were devised in the early 20th century, they are still relevant in contemporary businesses today and how, like Pumpkin Patch, they have been developed to fit their organizational structure. Fayol’s most influential principle is arguably unity of command. Unity of command is where every worker, whether it be a factory worker, a supervisor or the Chief Executive Officer (CEO) only receive orders from one superior source (Fells, 2000; Parker & Ritson, 2005; Samson & Daft, 2009). This stops confusion in the work place over what has to be done and therefore the organization is able to increase productivity thereby allowing the organization to reach their goals in a shorter time frame. This principle led to management teams being more structured as well as increasing work place efficiency which is still needed in today’s contemporary business. Pumpkin Patch Ltd., as well as many other businesses around the world, use this principle with great effect. Pumpkin Patch’s management runs from the Board of Directors right down to the shop assistants in stores such as Takapuna (Pumpkin Patch Limited, 2008). The structure of their management allows clear orders to be sent down the ranks and allows for company goals to be achieved through workers understanding of a task to be done. This has helped Pumpkin Patch become the leading-edge children’s brand it is today with stores in Australia, the United Kingdom, the United States and New Zealand (Brookes, Shepherd & Nicholson, 2008). The fact that what started out as a small family run New Zealand business is now an multinational company shows that clear management structures are indeed a major factor in the contemporary business as it allows workers, managers and employees to achieve the company objectives (Pumpkin Patch Limited, 2008; Hall, 2009 ). Subordination of individual interest of general interest, another of Fayol’s 14 principles, relies on the unity of command. Subordination of individual interest of general interest is when individual employees sacrifice their own opinions and interest for the greater good of the company (Rodrigues, 2001; Wren et al., 2002). This requires a high level of commitment from the employees. However when it comes to management, the top managers of the organization such as in Pumpkin Patch, have to decide what is best for the company. In times of difficulties such as a recession, managers need to be able to decide what will be best way forward for the company while maintaining a good profit margin. If this means that staff members will have to be retrenched or stores closed they have to be able to make that decision. The Pumpkin Patch Ltd. management team made this decision earlier on this year when they decided to close 20 of their 35 stores in the United States (Hall, 2009). This was because their stores on the East Coast, many of which were the newest stores to open in the United States for the company, were not achieving targets due to poor brand recognition (Slade, 2009). The management team made a decision to lose a few stores and employees, instead of allowing the company’s margins to be eroded which...
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