Fayol
propounded fourteen principles of organization which may be enumerated below:
2. Authority and Responsibility: According to Fayol, authority means giving
orders as well as getting them obeyed. Authority is a legitimized power. A
person in authority must have responsibility equal to the authority. He
classified authority into two types:
(a) official authority - which is by virtue
of one’s position in the organizational hierarchy.
(b) personal authority -
which a person acquires through his knowledge, ability and experience.
Any
person to whom authority is being given, must be made responsible for the
achievement of the objective.
3. Discipline: Fayol observed that if organization wants to increase its
production, it must maintain some discipline in the organization. It should be
two-way-face phenomenon that is both in management and in workers.
Unity of Command: Fayol opined that
each employee in an organization should have only one superior from whom he
receives directives. Orders should come from one superior as a man cannot serve
two masters at a time.
Unity of Direction: All the employees should move in one direction. The purpose and
objective should be common. Fayol stressed that there should be a single head
and a uniform plan for a group of activities having the same objectives.
Subordination of Individual Interest to General Interest:
Fayol was in favour that the workers should sacrifice their personal goals and
objectives for the achievement of organizational objectives. Management should
ensure that the objectives of the organization dominate the individual
interests.
Remuneration of Personnel: Fayol insisted on fair wages and salaries. It should be
neither low nor high. The method of payment should depend on the circumstances.
Centralization and Decentralization:
The degree of centralization and decentralization should be examined to avoid
over centralization or over decentralization.
Scalar Chain (Hierarchy): It
means clear-cut level of administration or clear-cut chain of command. It
refers to line of authority from superior to subordinate.
Order: Management must issue effective orders (that is, directives,
instructions and so on) from time to time.
Equity: Every
employee of the organization should be treated as equal. There should be no
favouritism or nepotism. But in doing so, justice should not be blind.
Stability of
Tenure: Fayol believed that employees of an organization should be
permanent; otherwise, it will result to wastage of manpower, money and time.
Espirit De Corps (Fellow feeling): This is described as the prevalence of harmony among
all members of the organization. All the employees should function as a team.
It builds up the morale of the employees. Management must provide them with
incentives.
Initiative:
Fayol emphasized the importance of delegation of authority. This makes the
subordinate officers responsible for the achievement of organizational initiative.
The most comprehensive enunciation of
the formal organization theory contained
in Papers on the Science of Administration (1937) was edited by Luther
Gulick and Lindel Urwick. Luther Gulick summed up the principles of
organization in the word POSDCORB. Each of the alphabets stands for a
particular function. To quote Gulick, POSDCORB is made up of initials and
stands for the following activities:
Planning: It
means working out in broad out-line the things that need to be done and the
methods for doing them to accomplish the purpose set for the enterprise;
Organizing:
That is the establishment of the formal structure of authority through which
work sub-divisions are arranged, defined and co-ordinated for the defined
objectives.
Staffing: It
involves the whole personnel function of bringing in and training the staff and
maintaining favourable condition of work.
Directing: It is the continuous task of making decisions and embodying
them in specific and general orders, instructions and serving as the leader of
the enterprise.
Coordinating: It is the all important duty of
inter-relating the various parts of the work.
Reporting: It
means keeping those to whom the executive is responsible informed as to what is
going on, which thus include keeping himself and his subordinates informed
through records, research and inspection.
Budgeting: This includes all that goes with budgeting in the form of
fiscal planning, accounting and control.
Felix A. Nigro and Lloyd G. Nigro have given the following principles of
administrative theory.
1. The central problem of government
organizations is one of coordinating the elaborate system in which full
opportunity ought to be taken of the advantages of specialization.
2. Principles must be discovered from
breaking down, and allocating the tasks of government among different
departments or agencies to assist effective specialization.
3. Responsibilities must be defined and clarified, and unity of command must be
secured to ensure effective performance. This naturally implies that the whole
system will follow a clear hierarchical pattern in which subordinates will take
orders from only one superior and the Span of Control will be rationally
settled.
4. Staff services have to be inserted at appropriate points in the hierarchy to
assist planning and co-ordination. This is particularly desirable at the top of
the structure. These Staff services have to be properly defined and located and
reconciled with the principle of unity of command.
This concept stems from two beliefs,
namely:
- there is a body of principles in accordance with which organizational plan can be spelled out to fit into the requirements of the chosen purpose or activity, and
- The requisite personnel must meet the requirements of this preconceived plan.
It may thus, be seen that this theory
views organization as a machine, considering the human beings who run it as
mere cogs. In the words of L.D. White, it is a formal declared pattern of
relationships established in the government by law and by top management. It is
based on the nature and volume of work to be done and is dictated by the
requirements of efficiency in the sense of securing the most effective use of
men and materials by the need for responsibility.
This organization is
established and supported by authority and can be set out, although
imperfectly, on a chart or diagram. It is
normally the dominant set of work relationships. According to Dimock,
this approach bears the stamp of the engineer seeking scientific precision,
logical structure and the one best way of performing each step and or relating
the parts to a unified whole. It is marked by an almost exclusive attention to
the problems of the structure in the role relations, that is activities and
tasks laid down to ensure the most effective and efficient organization. Focus
is thrown, not on the human being as such, but on the role as it relates to
other roles in the context of the organizational objective. This theory
manifests five features: personality, flexibility, division of work, hierarchy
and efficiency.
Further, it is marked by the following
six philosophical characteristics:
- It is atomistic in the sense that it sees the individuals in isolation from fellow-men;
- It is mechanistic. It does not explain the dynamics of organizational behaviour;
- It is static;
- It is voluntaristic. It rests upon the naive belief that the individuals are immured from the control either by the groups or social factors;
- It is rationalistic. Rational behaviour means performance of task according to method determined by the principles of scientific work performance; and
- It dose not take any note of non-economic incentives.
The formal organization theory is
made explicit in organizational chart, rule books, manuals, and rules of
procedures. It deals with what is called formal organization - an organization
which is deliberately and rationally designed to fulfill its objectives.
The
theory treats an organization as a closed system, completely unconnected with
and uninfluenced by its external environment. It is more concerned with what
ought to be and this kept it away from the study of actual behaviour in
organizations.
It underestimated the human factor and over simplified the human
motivations. Besides, although this theory sets not to develop principles of
organization, these were according to Herbert A. Simon and other critics, no
better than mere proverbs hardly providing any meaningful guidance to scholars
and practitioners of the subject.
Despite these limitations, the theory played a notable
role in rationalizing and even stimulating production. Secondly, it was this
theory which first propounded the idea that administration itself was a
separate activity and was worthy of intellectual investigation. Thirdly, it
formulated a set of concepts in administration and evolved a terminology which
has provided a base for subsequent researches in this field. Finally, the
limitation of this theory stimulated further research in organizational
behaviour, thus becoming an important milestone in the development of
organizational theories.
A discussion of formal organization theory without a look at the informal organization would be incomplete. And as a result, we study Barnard’s views on informal organization. Barnard’s understanding of informal organization is profound. He defines an informal organization as the aggregate of the personal contact and reactions and the associated groupings of peoples working in an organization. Informal organization is structure-less and has no unit sub-division.
It is rather a shapeless mass of varied densities, variations in density being a result of external factor affecting the closeness of the people. An informal organization establishes certain attitudes, understandings, custom, habits, and so forth. It furthermore, creates the conditions under which formal organization may arise.
Formal organizations arise out of and are necessary to informal organization, but when formal organizations come into being, they create and require informal organizations. Informal association is obviously a condition which necessarily precedes formal organization.
Every organization is under-pinned by an invisible organization.
This invisible organization is an informal organization. Informal organization
performs several functions. First, it is vehicle of communication. Secondly, it
maintains cohesiveness in formal organizations through regulating the
willingness to serve and the stability of authority.
Thirdly, it promotes a feeling of personal integrity of self-respect. Indeed, formal and informal organizations are inter-dependent aspects of the same phenomenon - a society is structured by formal organizations; formal organizations are activated and conditioned by informal organization.
There cannot be one without the other. If one fails, the other disintegrates. Complete absence of formal organization would be individualism, disorder, chaos and anarchy. One criticism of many public offices is that there is too much of informal organization and too little of formal organization in them.
Thirdly, it promotes a feeling of personal integrity of self-respect. Indeed, formal and informal organizations are inter-dependent aspects of the same phenomenon - a society is structured by formal organizations; formal organizations are activated and conditioned by informal organization.
There cannot be one without the other. If one fails, the other disintegrates. Complete absence of formal organization would be individualism, disorder, chaos and anarchy. One criticism of many public offices is that there is too much of informal organization and too little of formal organization in them.