Henry Fayols Treatise on General and Industrial Management - Coursework Example

FAYOL’ FOUR FUNCTONS: COMPARING A SUCCESSFUL AND AN UNSUCEESSFUL ORGANISATION STUDENT NAME PROFESSOR’S NAME COURSE TITLE DATE In Henry Fayol’s treatise on General and Industrial Management (Fayol, 1949), the four main functions of an organization are planning organizing, controlling and coordinating. This is the classical representation of the job of a manager within the organization, despite Henry Fayol facing critics from Mintzberg (1975) who stated that management does not only involve planning, organizing, commanding, controlling and coordinating since there is more to the job of a manager. The success of any company or organization relies on the efficacy of its managers in ensuring that the activities of the organization meet the goals and aims of the company. How effective is Fayol’s four functions in theory of management? This paper focuses on BHP Billiton as being the most successful business in Australia in the oil and gas business while Kodak will be considered on the basis of an unsuccessful company. The basic characteristics of a manager in regards to managing a business are leadership skills, organisation, and ability to organise and control their working environment (Mintzberg, 1973). The manager within the work environment is someone overseeing the operations of the work activities by employees to ensure that the tasks are completed efficiently (Mintzberg,1973). Different business require different approach in management, and that the management needs to structure itself in such a way that it accomplishes the goals of the organisation, controls and monitors the activities of the organisation (Fells, 2000). This simply implies that the managers need to make products, market, manage the personnel and make financial decisions that are crucial to the success of the organisation (Tsoukas, 1994). In consideration of what an unsuccessful organisation, then one needs to consider the level of growth that than an organisation aims to achieve or attain (Hubbard and Beamish, 2011). The strategy of an organisation especially in terms of planning, control, organisation and coordination creates a good ethos for the organisation creating an organisational culture where employees and management want to see the organisation successful (Dosi and Marengo, 2007). In considering Eastman Kodak as an unsuccessful organisation is informed by its decision to declare bankruptcy in 2012 having dominated the consumer markets for more than a century (Chandy and Tellis, 2000). Planning refers to the ability of an organisation to assess the future prospects of a business and make the provisions for it (Fayol, 1947). In order for a business to be successful then it needs to plan ahead either through documentation and that a manager needs to understand the people, be courageous, competence and general business knowledge. The problem that faced Kodak in terms of management was due to the lack of management in planning ahead through creation of innovative products to edge out emerging competitors such as Fujitsu and Cannon. Kodak, as a result of its complacence and the management’s failure to manage the activities to improve productivity, led to its sharp decline in owning a 90% market share of the film industry and cameras (Chandy and Tellis, 2000). Unlike BHP Billiton that depends on the availability of natural resources, Kodak’s strengths is dependent on innovation, and the company’s failure to invest in innovation is what has led to its decline in the Australian market and globally. The decision by Eastman Kodak to close Kodak Australia according to the managing director was that people are shifting from traditional photography, however the restructuring of Kodak’s internal operations, has made it difficult for it to regain its prominence in the market. In contrast to Kodak’s unfortunate situation, BHP Billiton plans ahead in terms of focusing on the changing market environment and has embraced technology to improve its performance in the market. BHP Billiton’s merger in 2001 with BHP and Billiton, the company has diversified to become a world market leader. The merger is a feature of managerial planning since it enabled the company to diversify and embrace the potentials within the market. Unlike Kodak, whose acquisitions are un-strategic, focusing on new products rather than improving the brand, BHP Billiton’s management have focused on building the brand and expansion of the organisation. Organising in the Fayol’s definition is the “undertaking with everything useful to become functional” (Fayol, 1947). This means that the leadership of the organisation needs to be energetic, authoritative, and good in decision making while at the same time organising and co-co-coordinating the activities of the organisation. A successful organisation needs to have the right people, with the right skill for the right kind of job in order for the organisation to be successful. The disorganisation in Kodak especially in determining what would be productive for the organisation was misplaced. Kodak’s management had difficulty in using its valuable assets in order to make the organisation functional, for instance it was more of product oriented rather than customer oriented (Newman, 2012) Traditionally, Kodak was in the film business, but it misplaced ideas by deciding to diversify into chemicals and drugs by purchasing Sterling Drug for $5.1 million rather than venture into its main area of competency in film (Newman, 1949). BHP on the other hand is organised since it has ventured mainly in the natural resources industry and improving in its area of competency with the management focusing on making the organisation more competitive. The classical roles of managers are ensuring that they focus in organising the business undertakings (Carrol and Gillen, 1987). Command in the theoretical understanding of Fayol referred to the mission in setting the organisation going, which is getting the optimum returns from the employees (Fayol,1949, 97). Commanding an organisation requires having a manager who has some sets of personal qualities and knowledge in making the employees become loyal, initiative and energetic and unified in terms of managing the company (Tsoukas, 2004). BHP Billiton sharply focuses on its workforce; these are the employees working within its organisation. The success of BHP Billiton lies in its ability to make its employees reflect the organisations values; it ensures that the employees work in teams so as to differentiate it from its competitors. Kodak on the other hand, the management of the organisation failed its employees since it was unable to organise the affairs of the company to ensure that there was a high return. In 2004 Kodak shut its operation in Australia’s Melbourne Northern plant and the employees were left out. However, there is hope for Kodak if the restructuring enables the organisation to capture its market share through better policies ensuring maximised returns from its employees (Latham, 2004). The other important aspect in Fayol’s management theory is the issue of co-ordination. Co-ordination refers to the ability of management to effectively harmonize the activities of an organisation so as to facilitate the working and the success of the organisation (Fayol, 1949). Co-ordination involves the use of meetings, departmental conferences, reports and team meetings in order for the success of the organisation. The management of Kodak unlike BHP Billiton is uncoordinated with the management’s inability to focus on activities that are the core competencies of the organisation. Kodak’s management needs to focus on harmonising the activities of the organisation on the copier business, the camera business or drug and chemicals. The fact that Kodak moved away from its core competency, it left it open for Fujifilm and Cannon to capture its market share and hence becoming irrelevant in the camera and copier business. Co-ordination is important in management since it enables the organisation to work as a team in organising the affairs of the organisation (Mintzberg, 1989). Control as viewed by Fayol refers to “verifying whether everything occurs in conformity, according to the plan adopted, instructions issued and the established principles” (Fayol, 1949). In co-ordination, management needs to have objectives in pointing out the weaknesses in the company, rectify the weakness and prevention of the re-occurrence of the weakness (Pasmore, 1988). The nature of managerial skills and handling tasks are defined by the ability of the manager to direct the activities of the organisation (Whitley, 1989). BHP Billiton has in the recent adopted different strategy such as working in teams in order to ensure that the instructions issued by management are acted upon. BHP Billiton working in teams enables it to focus on the weaknesses of the organisation, the challenges and also gather information from employees on how to handle the activities of the organisation better. In conclusion, the four functions in Fayol’s management theory include: planning, organisation, control, co-ordination and command. Despite critiques arguing that the four functions are only applicable theoretically, the practicality of the functions is defined by the outcomes of an organisation in terms of success. In consideration of the two organisations discussed BHP Billiton a multinational Australian based firm and Kodak a declining organisation, the main differences in terms of success is attributed to the management of the organisation. BHP Billiton is organised in terms of its business strategy, innovation and its aim to stay ahead of its main competitors in the oil and gas industry. The management is radiant with innovation, business coordination strategies, control and supervision of employees in order to remain relevance in the market. On the other hand, the complacent nature of Kodak’s management in terms of planning has led to its loss of control in terms of market shares, its main competitors have taken over its market place, and its strategies for expansion are unrealistic. Bibliography Chandy, R and Tellis, G. “The Incumbent’s curse? Incumbency, size and radical product innovation.” Journal of Marketing 64, no.3 (2000): 1-17. Carroll, S and Gillen, D. “ Are the classical management functions useful in describing managerial work.” Academy of Management Review, 12, no.3 (1987): 38-51 Doede, Keuning, Bossink, Bart, and Tjemkes. Brian. Management: An Evidence Based Approach. Noordhoff: Croningen, 2010. Dosi, G, and Marengo, L. “On the evolutionary and behavioural theories of organisations: A tentative roadmap.”Organisation Science 183 (2007):491-502,544 http://search.proquest.com.libraryproxy.griffith.edu.au/docview/213831777?accountid=14543 Fayol, H. General and Industrial Management. London: Pitman, 1949. Hubbard, G, and Beamish, P. Strategic Management: Thinking Analysis, Action, 4th ed, Sydney: Pearson, 2011. Latham, G P, “Goal Setting and task performance” Organisational Behaviour and Human Performance., : 157-189 Michael , Fells , “Fayol stands the test of time”, Journal of Management History, 6, no.8 (2000): 345-360 Mintzberg, H. The Nature of Managerial Work. New York: Harper & Row, 1973 Mintzberg, H. “The manager’s job: Folklore and fact.” Harvard Business Review 53, no.4 (1975):49-61 Mintzberg, H. Mintzberg on Management: inside our strange world of organizations. New York: The Free Press, 1989. Newman, Rick. “Four Lessons From Kodak’s Comedown”, US NEWS (2012), Retrieved from: http://www.usnews.com/news/blogs/rick-newman/2012/01/19/4-lessons-from-kodaks-comedown%20downloaded%206/07/13 Pasmore, W A, Designing Effective Organisations, New York: John Wiley, 1988). Tsoukas, H. “What is management? An outline of a metatheory.” British Journal of Management, 5 (1994): 289-301. Whitley, R. “On the nature of managerial tasks and skills: Their distinguishing characteristics and organization.” Journal of Management Studies, 26 no.3 (1989): 209-224. Read More