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Unit 1: Introduction to Management

controlling function is to be effective, it must be preceded by proper planning. Thus, Notes
controlling includes four things:
(a) setting standards of performance,
(b) measuring actual performance,
(c) comparing actual performance against the standard and

(d) taking corrective actions to ensure goal accomplishment.
Successful management involves active participation by managers in the above basic managerial
functions. These functions are interrelated and most managers use a combination of the all of
them simultaneously to solve the problems facing their companies.

1.12 Contribution of Henry Fayol

Henry Fayol was born in 1941 at Constantinople in France.

Did u know? He graduated as a mining engineer in 1860 from the National School of
Mining. After his graduation, he joined a French Coal Mining Company as an Engineer.
After a couple of years, he was promoted as manager. He was appointed as General
Manager of his company in 1888. At that time, the company suffered heavy losses and was
nearly bankrupt. Henry Fayol succeeded in converting his company from near bankruptcy
to a strong financial position and a record of profits and dividends over a long period.
Concept of Management: Henry Fayol is considered the father of modern theory of general and
industrial management. He divided general and industrial management into six groups:

1. Technical activities: Production, manufacture, adaptation.
2. Commercial activities: buying, selling and exchange.
3. Financial activities: search for and optimum use of capital.
4. Security activities: protection of property and persons.

5. Accounting activities: stock-taking, balance sheet, cost, and statistics.
6. Managerial activities: planning, organisation, command, co-ordination and control.
These six functions had to be performed to operate successfully any kind of business. He, however,
pointed out that the last function i.e., ability to manage, was the most important for upper levels
of managers.
The process of management as an ongoing managerial cycle involving planning, organising,
directing, co-ordination, and controlling, is actually based on the analysis of general management
by Fayol. Hence, it is said that Fayol established the pattern of management thought and practice.
Even today, management process has general recognition.
Fayol’s Principles of Management: The principles of management are given below:
1. Division of work: Division of work or specialization alone can give maximum productivity
and efficiency. Both technical and managerial activities can be performed in the best
manner only through division of labour and specialization.

2. Authority and Responsibility: The right to give order is called authority. The obligation
to accomplish is called responsibility. Authority and Responsibility are the two sides of
the management coin. They exist together. They are complementary and mutually
interdependent.

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