Fayol: from experience to theory

Donald Reid
Department of History, University of North Carolina, Chapel Hill, North Carolina, USA
I doubt that I am alone in finding Henri Fayols writings at once lucid and impenetrable. I think this accounts for the extremely repetitive character of the great majority of works on him[1]. One way to break this cycle is to reexamine Fayols work in the context in which he developed it. We are all familiar with F.W. Taylors engaging accounts of his discovery of the principles of scientific management (a critique of Taylors account is in [2]). Fayol also planned to analyse his career in order to show how his ideas derived from experience, but never did so in print. Using Fayols unpublished papers, I propose to do for Fayol what Taylor did for himself to show how Fayols experiences as mine engineer, mine manager and CEO (general director) shaped his conception of administration. I have organized crucial experiences in Fayols career around what he identified as the five functions of administration: (1) organization; (2) foresight (planning); (3) co-ordination; (4) control; and (5) command. Fayols career Fayols critics sometimes make the charge that he based his theories on a fairly limited set of experiences. In fact, Fayols career exposed him to all aspects of an organizational growth model from the single unit to the multi-unit diversified firm. In 1860, at the age of 19, Fayol graduated from the Ecole des Mines at SaintEtienne and was hired as an engineer by the Socit Boigues, Rambourg et Cie (after 1874, Socit Anonyme de Commentry-Fourchambault, or Comambault) for its Commentry mine. He spent his entire career with the firm. Fayols success in combating subterranean fires led to his appointment as director of the Commentry mine in 1866. Six years later he was also made director of the firms Montvicq coal mine and Berry iron ore mine. After four years without dividends in the late 1880s, the ailing Comambault appointed
Portions of this essay appeared earlier in a different form in Gense du Fayolisme, Sociologie du Travail, Vol. 19, 1986, pp. 75-93.

Fayol: from experience to theory 21

Journal of Management History Vol. 1 No. 3, 1995, pp. 21-36. MCB University Press, 1355-252X

JMH 1,3

22

Fayol as CEO in 1888 with the mandate to wind down the firms operations. In what Fayol and his followers referred to as the experience of 1888, he oversaw a dramatic improvement in the companys fortunes. Fayol discounted the effect of the end of the long depression in the companys turnaround and held that Comambault returned to prosperity without significant changes in any area except administration: The application of the method of Positive Administration is, in my opinion, the sole reason for the change in fortunes of Comambault after 1888[3-5]. Fayol achieved fame only after publication of Administration Industrielle et Gnrale in 1916. He retired as Comambault CEO shortly afterwards and devoted his final years to spreading his views in print, public speeches and private conversation. Fayol attributed the industrial and military superiority of Germany during the war to the strength of its state administration in comparison to that of France[6] and spent much of his time promoting reform of the state along the lines of his administrative theory. Fayol left no work like Freuds Interpretation of Dreams to elucidate the conflicts he encountered as manager or the ways in which he saw his theory as a resolution of them. To get at such matters, we must retrace Fayols career, looking at: q how his experience as a mine engineer affected his understanding of the organization of work; q the lessons he derived about foresight as manager of a coal mine; q his experiences, as CEO of Comambault, in co-ordinating the activities of a multi-unit firm; q Fayols efforts to redefine the criteria for exercising control in the labour force; q how Fayols experience as CEO led him to rethink the role of the board of directors and the function of command. The labour process: organization One of the things for which Fayol is best known is differing with Taylor on the value of functional foremen. Taylor argued that specialization was the most efficient form of management: there should be one foreman for each of eight aspects of the workers job. Such a thought was anathema to Fayol, who believed that no employee should receive orders from more than one source and that this authority must be represented at all times. Fayol developed these ideas as a novice engineer. The use which the head of the Commentry workshops made of the independence he derived by receiving orders from three superiors was a perpetual source of conflicts[7,8]. What was required was not for managers to divide their authority a source of confusion and disorder but to delegate it. In this way the power and prestige of the engineer, for instance, would grow not by usurping managerial authority but by ensuring that managerial power was ever present. One of Fayols first notes, written shortly after he arrived at Commentry concerns this issue:

May 1861. The horse on the sixth level of the St. Edmund pits broke its leg this morning. I made out an order for its replacement. The stableman refused to accept the order because it did not bear the Directors signature. The Director was absent. No one was designated to replace him. Despite my entreaties, the stableman persisted in his refusal. He had express orders, he said. The injured horse was not replaced and production at the sixth level was lost[7, p. 4; 9-11].

Fayol: from experience to theory 23

To Fayols way of thinking, the presence of more (or less) than one authority created disorder and threatened production. Largely as a result of this position, Fayol has earned a reputation as a theorist focused on the relationship of hierarchy to responsibility and fearful that employees would take advantage of unclear managerial structures to carve out their own niches within the firm which could only be harmful to the firms long-term interests. However, there is another, less recognized side to Fayols views on organization. As a mechanical engineer, Taylor understood that much of the inefficiency in the labour done by craftsmen resulted from their efforts to deal with contingencies resulting from variances in machinery and materials. He realized that he had to eradicate these factors before he could expect workers to assume the role of executors of actions conceived by others. Taylors great technical accomplishment was the development of a uniform high-speed steel which reduced the inconsistencies in the materials which the machine-shop worker used. In keeping with this insight, Taylor demanded that the work area itself be rationalized before the rationalization of labour was introduced[12]. Unlike Taylor, Fayol was by training a mining engineer; he gave his ignorance about metallurgy as proof that the reversal in fortunes of the mining-metallurgical firm Comambault after 1888 was due to his administrative rather than technical expertise[7, pp. 73-4]. Unlike the machine-shop workers with whom Taylor was familiar, nineteenth-century coal miners laboured with little direct supervision in constantly changing conditions which they themselves continually created and recreated. Engineers could estimate the size of veins, and, in order to set wages, appraise the difficulty involved in mining them, but they could not actually monitor very closely work which miners did. As a mining engineer, therefore, Fayol was less concerned with subdividing the labour process than Taylor. In fact, one of the major changes Fayol introduced during his tenure at Commentry was to reverse the trend towards a division of labour in mining by returning to the crew much of the responsibility for timbering which had previously been given to specialized personnel[13]. While Fayol condemned the use of sub-contractors independent of company control in the mines, he celebrated the ingenuity, adaptability and productivity of the small work crew. The organization by crews free to constitute themselves as they wished stimulated workers. There was a continual process of elimination; the good or strong workers rejected the bad or the weak. The latter grouped together and ended up being rebuffed[14]. Workers grouped according to their wishes generally remained together a long time. They pushed one another and worked hard. Changes in their crews were infrequent[13,15]. (For a similar assessment of coal mining in the mid-twentieth century see [16].)

JMH 1,3

Two of Fayols early disciples summed up the influence of his experience in mining on his thought:
in the mines, workers are no more mechanized nor mechanizable than engineers. At the end of their veins they have full control over their actions. Nothing in their work is comparable to the movements of a machine. For Fayol, who early in his career had contact only with miners, the problem was much less to extract the extreme element of a mechanical determinism than to organize liberty[17,18, pp. 124-718;19].

24

It is significant that Fayol, unlike Taylor, saw all employees, even production workers, as devoting a portion of their efforts to administration[20,21]. Whereas Taylor thought in terms of breaking down tasks into their constituent parts, Fayol let payment by production act as an incentive for workers to work efficiently, and was concerned instead with ensuring that operations were organized so as to draw the maximum benefit from the workers production. In the mines, for instance, this required a constant supply of wagons to remove coal and schists, and it is not surprising that Fayols earliest comment on management the report on the injured horse concerned the breakdown of interior mine transport. Historians of management, puzzled by the slow acceptance of Taylors theories in France, have attributed a French preference for Fayol to the persistence of conservative companies whose directors, rightly or wrongly, found in Fayols theories justification for their authoritarian conception of the firm[22,23]. Yet there is another aspect of Fayols system which has direct relevance to French industry well outside of mining. The relative degree of control over the labour process which Fayol allocated to the work group falls within a long-standing tradition of French manufacturing dependent on the relative autonomy and flexibility of labour[24]. The coal industry: foresight At the lower end of the managerial hierarchy Fayol left workers a fair degree of responsibility in the execution of their labour; the counterbalance to this was his emphasis on foresight. Fayol developed his ideas about short- and long-term planning from the coal industry, which was characterized by continuous, relatively fixed production and the need to amortize large capital investments over time. As a result, Fayols experience was with forms of planning which were less directly market oriented than would have been the case in most other businesses: q Long-term planning generally concerned the nature and size of the coal deposit. q Short-term planning was primarily a matter of co-ordinating production and sales. As manager of the coal mines of Commentry and Montvicq Fayol strongly criticized Comambaults commercial practices. He found that mine upkeep and the production price of coal suffered from the companys policy of trying to tailor production too closely to sales. When company salesmen made arrangements to sell a higher grade of coal, for instance, they failed to realize that extraction of that

coal necessarily entailed extraction of lower grades of coal which also had to be marketed in order to make the sale of the higher quality coal profitable. Beginning in 1880 Fayol remedied this situation by preparing projected production and sales plans and by arranging for up-to-date records of the amounts of various qualities of coal in stock to be passed on to company salesmen to guide them in making sales[25]. Production, therefore, not market demand, was the key to Fayols conception of planning: in the mining industry,
the fact that there is no need to purchase raw materials and that the product is part of a vast and stable market increases even more the precision one can aim for in an annual market projection. Here, the unpredictable element is primarily the nature of the coal bed[26].

Fayol: from experience to theory 25

Comambaults experiences at Commentry brought this lesson home to Fayol. Until 1875 Comambault seemingly had no concerns about the extent of the Commentry coal deposit[27,28]. That year Fayol completed an extensive study of the Commentry coal basin and concluded that the deposit was rapidly being depleted[7, p. 22; 29]. His findings profoundly shook the firm, which depended on the sale of Commentrys coal on the open market and to its factories for the bulk of its profits. In the intervening years, Comambault, paralyzed not only by the long depression but also by the demise of its major coalfield, began a slow decline which ended only after Fayol was named CEO. In sum, because of his experience in mining, Fayols understanding of planning differed from that of other managerial experts in its relatively greater reliance on evaluation of the firms capacities than on projections concerning changes in demand. The multi-unit firm: co-ordination The majority of nineteenth-century French coal and metallurgical firms operated a single industrial complex. Comambault was an exception. It originated as an association of several coal and iron ore mines and ironworks in the Allier and the Nivre departments, which joined in 1854 to form Boigues, Rambourg et Cie. The enterprise was based on the sale of coal from the mines to the ironworks. This encouraged a dispersion of power among the individual production centres and between mining and metallurgy. No relationship existed between the personnel of the mines and that of the factories, wrote Fayol; systematically or not an airtight compartmentalization reigned between the two groups[7, p. 23]. As in the case of planning, it was the revelation of Commentrys imminent decline which provided Fayol with a key insight into the administrative function of co-ordination. The individual Comambault metalworks had long considered themselves profitable, not realizing that their prosperity was based on the significantly lower than market price at which they purchased coal from Commentry. Only when the future of the Commentry mines was thrown into doubt did the true situation of the firms factories become clear[7, pp. 82-4]. This experience left Fayol wary of profitability as the sole criterion for evaluating operation of an integrated multi-unit enterprise because it could mask managerial deficiencies within the firm[30].

JMH 1,3

26

After his appointment as CEO, Fayol set out to revive Comambault by rebuilding its multi-plant structure. He began by co-ordinating management of the companys various enterprises through the CEOs office[31]. Under Fayol, Comambault specialized in the purchase of ailing industrial establishments which it restored with doses of capital investment and administrative reform[32]. Comambault phased out mining at Commentry and closed metallurgical plants at Fourchambault and La Pique. To replace these enterprises the firm bought the coal mines of Brassac and the mines and factories of Decazeville. The firm did not limit its expansion to the older industrial areas of southern and central France. Before the First World War it invested in two joint ventures: the Joudreville iron ore mines in the Lorraine and the Pont--Vendin steelworks in the Pas-de-Calais. In its original configuration, Comambault had involved the coming together of a small group of owner-managers, who brought to the new company a mine or factory and a labour force of skilled metalworkers or peasant-miners. In developing a strategy to take Comambault from this collection of first Industrial Revolution centres to a competitive second Industrial Revolution company, Fayol rethought the nature of the firm. The identity and persistence of a firm, he came to believe, were more the result of administrative practice than of either the identity of the owners or the geographical location of operations. While Fayol clearly recognized the importance of creating and nurturing a trained labour force (and made efforts to resettle employees laid off as the result of mine and factory closings), he nevertheless gradually transformed Comambault into a firm based on the mobility of capital from one industrial centre to another and on a corps of expert managerial personnel. When Comambault purchased the Decazeville industrial complex, Fayol made a point of telling the stockholders general assembly that the companys aim was to consolidate the business by reassuring the managerial personnel of the firms future[33]. Fayols vision of the company as the fruitful combination of capital and management differed from the earlier view of the firm as the union of an owner (or owners) and a community of labour. This would have important implications for Fayols conception of the proper relationship between management and labour and between the board of directors and the CEO. Labour relations: rethinking control Fayols ideas about administration led him to promote a conception of labour relations which differed significantly from that practised in most large mining and metallurgical firms in France during the nineteenth century. Within what was nominally a liberal economy these companies created quite illiberal workers communities. Besides providing a variety of social services to foster a selfregenerating labour force, they made every effort to restrict the union and political rights of their workers. These firms frequently controlled local commerce to prevent the creation of elements within the local population independent of company control, and used the church to legitimate their position[19, pp. 75-6]. While Fayol believed in granting benefits to workers over and above their wages,

and spoke of the importance of creating an esprit de corps in the labour force, he was sensitive to the liabilities of the authoritarian aspects of the company town[34]. In large part, Fayols approach can be interpreted as a reaction to the experiences of Stphane Mony, his mentor and predecessor as director of the Commentry mines (absent in the story of the injured horse) and as CEO of Comambault. Mony typified many elements of the earlier paternalist tradition. He had been a Saint-Simonian[35] as a youth and believed in the social solidarity created within a community of labour. In 1873 Mony had Fayol organize a very Saint-Simonian celebration of labour ( fte du travail ) for the 56 30-year veterans at the Commentry mine[36]. Mony was also influenced by Frdric Le Play, and even had Fayol compile data for a Le Playian monograph about a Commentry miner[37-39]. Mony was popular among workers and when director of Commentry enjoyed going about talking with miners and giving them suggestions and orders (a practice Fayol would later criticize). Under the Second Empire Mony served as mayor of Commentry and was elected deputy from the Allier. Yet after the disastrous Franco-Prussian War and the fall of the Empire, Mony could not hide from himself that even his beloved Commentry miners were beginning to look elsewhere for political leadership. He blamed this shift in the workers affections on the creation of the Third Republic, and sought unsuccessfully in the 1870s to win back their allegiance from local republicans[38]. In 1881 Commentry miners went on strike after Comambault transferred or pensioned off 200 miners, and elected the first socialist municipality in France. Comambault could see the writing on the wall and, after Monys death in 1883, it decided that to avoid friction with both its employees and the republican state, no members of the managerial staff would be allowed to run for office[7, pp. 93-4, 99-103]. When Comambault purchased the mines and factories of Decazeville, a town riven with bitter antagonisms over the participation of managers from the previous company in politics, Fayol reiterated this hands-off strategy (although the firm did not hesitate to fire the general secretaries of the miners and metalworkers unions for unauthorized absences during the electoral campaign in 1893)[19, pp. 148-51]. Under Fayols direction, Comambault also made it a policy neither to monitor attendance at church nor to set up company stores where local businesses already served the needs of the population[7, pp. 89-91]. While Comambaults labour policies were clearly a response to the Third Republic and to labour militancy, they were also an outgrowth of important elements in Fayols managerial theory. Implicit in Fayols thought is the view that the move from the single-unit enterprise to an economy based on the visible hand of the multi-unit enterprise required a change in labour relations from a single-minded effort to organize and control labour which characterized many major nineteenth-century French mining and metallurgical centres to a conception of management in which: q the needs of the firm took precedence over those of the paternalist community of labour;

Fayol: from experience to theory 27

JMH 1,3

28

the clear delineation of managerial tasks provided a means of judging the advisability of managerial efforts to create affective bonds with the labour force; q the granting of a degree of autonomy to labour in and out of the workplace would lead to a less rebellious and more productive labour force. Let us examine each of these points in more detail.
q

The needs of the firm versus paternalist community of labour Fayols successful management of Comambault was predicated on the mobility of the firms investment capital. The very diversity of Comambaults holdings and its policy of working each until it was no longer profitable and then abandoning it would have made it difficult for the firm to promote more developed forms of paternalism, which identified the companys interests with those of workers in individual communities. Clear delineation of managerial tasks If the nature of the firm ruled out the most wide-ranging forms of paternalism, so too did Fayols conception of management. Above all, Fayol sought to lay out clearly the managers duties and responsibilities. By delimiting and prioritizing managements goals and means of achieving them, Fayol undercut the totalitarian logic of the company-controlled town. The paternalist project of creating a community of labour had to be weighed against the potential impact on the firm of worker resistance to such a project. Religious ceremonies and political demonstrations figure into the administrative domain to the extent that they can have an influence on the worth of agents and on social peace[40]. However, whatever his views on politics and religion, the director should not let himself be guided by anything except the interests of the business[41]. Yet Fayol was very aware of the social aspect of management. Like nineteenthcentury paternalist employers Fayol believed management entailed an affective component which would overcome the potentially divisive effects of the division of labour within the firm and would contribute to social harmony and productivity[42]. Fayols innovation was to redefine the firm and to delineate its interests as the criteria for measuring the effectiveness of activities intended to create an esprit de corps within the labour force. Fayols 1898 description of the revival of industry at Decazeville makes clear his articulation of the non-technical aspects of administration which would have been expressed in paternalist familial terms a generation earlier and in phraseology of human relations a generation later:
When I assumed responsibility for the restoration of Decazeville, I counted neither on my technical superiority nor on that of my collaborators. I counted on my abilities as an organizer, a handler of men. I knew that I would get a lot out of all my collaborators, thanks to the principles, the rules I followed. In a few years the three thousand workers of Decazeville who were thought to lack skill and discipline have shown evidence of sufficient worth to place the firm (mines and factories) on the most prosperous level It is truly astounding that the same men in so little time could be the instruments of decadence and of renovation.

The technical aspect is therefore not the most importantand one must attribute to the mode of administration a part of the interest attached up to now to doing things There is no good tool for the bad worker. There is no need to worry about the tool for the good worker: he will find it. A good personnel changes its methods, its procedures, in time[43].

Fayol: from experience to theory 29

Granting of a degree of autonomy to labour Just as Fayol recognized the importance of allowing miners a degree of independence within their crews, he recognized the value of limited forms of worker representation. In 1890 the parliament instituted mine-safety delegates, miners elected by their fellow miners to inspect mines for safety violations and to file reports after accidents[44]. While most mining firms lamented the passage of the bill, Fayol explained to the board of directors that the new institution had a silver lining: In the past five years we have become increasingly familiar with workers agitations, and we have even come to desire that workers have their interests defended by serious delegates instead of being led, as is usually the case, by politicians who care no more about the worker than they do about the industry of the region[45]. Fayol hoped that the new delegates would give miners this serious representation. While Comambault sought to ignore unions whenever possible, Fayol privately expressed an acceptance of strong unions preferably instructed in administrative theory which stuck to issues of wages and hours, did not try to usurp managerial prerogatives[7, pp. 102,110; 46], and took financial responsibility for their actions, along the lines laid out by the Taff Vale judgement in Great Britain[47]. In sum, Fayols experiences led him to rethink the norms governing administrative control that were in place at the time he began his career. The board of directors and the CEO: command To understand Fayols reconceptualization of the role of the CEO, we must survey briefly the history of Comambault. The limited partnership Boigues, Rambourg et Cie began with five directors, each of whom controlled one of the companys major mines or factories[48-50]. In 1874 the death of several of the company founders and the consequent dispersion of ownership led the original firm to reform as the joint-stock company Comambault under the direction of a seven-to-14 man board (conseil dadministration), which operated largely independently of the stockholders control[51,52]. The board reduced the number of directors to a committee of three, chosen from among its members: one individual was responsible for Commentry, one for Fourchambault, and one for financial affairs in Paris. There was a fair degree of friction between the three-man committee and the board over the committees right to make decisions without first consulting the board[53]. In 1880 the board asserted its power. It renamed the members of the committee general directors and voted to make them clearly dependent on the board: executive power is no longer exercised except as delegated by the board of directors and this board reserves for itself the right to change, by a simple deliberation, not only the powers of the general directors, but the directors themselves[54].

JMH 1,3

30

Attrition eventually reduced the number of general directors to one by the time Fayol took the post in 1888. Fayols predecessor had encountered such animosity from members of the board that he had been asked to resign. He felt that the majority of the board had only known how to bestow on him their criticism, to create hindrances for him and finally to reveal on the board a more and more open hostility which paralyzed his efforts, made his situation untenable, and led him to submit his resignation[55]. At the time of Fayols appointment, the board was clearly the dominant force within the firm. It was divided internally, however, and unable to find a new formula for governance after the warnings of Commentrys eminent demise had sunk in. The board named Fayol general director (or, what I have called CEO in this article) in hopes of liquidating the enterprise as quickly and efficiently as possible. His appointment represented a break with past practice. He was not a member of the board and was not asked to join it until 1900[56-58]; Fayol himself refused to purchase stock in Comambault for fear of compromising his position as CEO[59]. He worked instead to establish an identity for the CEO separate from that of the board. In the past the boards meeting room had also served as the office of the CEO: in 1891 Fayol won approval to establish a large separate office for the CEO and his staff[60]. The boards initial reaction to Fayol was to treat him as a gifted engineer, but not an executive, and it therefore excluded him from the inner workings of the firm. In 1889 Fayol and the board clashed over revision of the company statutes; Fayol was left angry and frustrated by the boards refusal to let him participate[61,62]. Within a few years, however, the re-establishment of regular annual dividends earned Fayol the leverage he needed to reverse the previous imbalance of power. He began to criticize the boards supervision of company finances[63,64], and especially its naysaying fiscal conservatism. In 1899 he wrote in a note to himself: Critical spirit, favourable to inertia. Take care to guard against this on the board. It has nothing to do but criticize. This is easy and dangerous as a result of the impediments it can create to the CEOs action[65]. As far as Fayol was concerned, the Comambault board had largely abdicated its managerial role by its paralysis in the face of Commentrys decline in the 1880s. Instead of seeking to invest elsewhere, he lamented, the board had evaluated its limited future and used its funds as a good family father to retire its debts early. Such lack of foresight always rankled with Fayol, and in 1912 he told the president of the Comambault board that for a company to succeed, board members must be up to the job, and bluntly informed the president that he did not think this was the case at Comambault. Fayol contended that the boards failure to stay abreast of the companys financial situation had precipitated a crisis in 1910: A question of finances is raised! It is discussed more or less thoughtlessly, picked up again a month later. Without having held the attention of our colleagues, and resolved any old way. It is not surprising then that we find ourselves in a deplorable and ridiculous situation two years later. Implicit in Fayols comments was a wide-ranging critique of company governance by a board of directors. At the end of the

conversation Fayol elicited from the president recognition that a major problem with the board was its quite bad system of recruitment, since members were not selected for the administrative duties they would be expected to fulfil. Having made his point, Fayol laid down an ultimatum to the president over the boards hesitation to invest in Pont-a-Vendin: when the CEO wholeheartedly endorsed a project it was the duty of the board to approve funding for it[66-69]. From these experiences, Fayol reasoned that the boards responsibilities should be limited. Stockholders and their representatives on the board were too tied to the market: their practice of comparing profits achieved by competing firms was a primitive means of assessing managerial performance[70,71]. At the end of his life Fayol returned to the problems created by the meddling of incompetent boards of directors. After reviewing the actions of the state tobacco monopoly and the Banque de Paris et Pays Basque, Fayol conjured up his own nightmare: Daily intervention by the whole board of Comambault would be noxious; incompetents would interfere with the CEOs actions[72]. Fayols taming of the Comambault board was crucial to his development of a theory of administration. The nineteenth-century firm had thought of management as having a technical component which fell within the engineers purview, and a financial component which was the responsibility of the board of directors. Administration, like speaking prose, was something engineers and the board had done without giving it much thought. Fayols argument that administration was a separate function helped legitimate the authority of the CEO. Fayols concerns with impediments to the CEO also served as the basis for work on public administration which consumed the last years of his life. Because the grandes coles trained the future managers both of the army and the civil service, and of large enterprises like railways and coal mines, the state bureaucracy had provided a model for business management during the nineteenth century. While Fayol owed much to this tradition, his application of principles derived from business to the state was based on a belief that society and the state had changed between the nineteenth and early twentieth centuries. If in the past France had experienced a Tocquevillian situation in which a strong state faced isolated individuals, this was no longer the case. In an era of powerful organizations of employers, workers, civil servants, consumers and others, an administrative state was necessary[49,50,73,74]. The Political System is a matter of empiricism and sentiment and therefore essentially unstable and fragile; the Administrative Regime, resting as it does on a doctrine and on principles, is general and stable[75]. The conclusions Fayol drew from his study of the state were not surprising: administrative theory transcended ideology and should, therefore, be the concern of all political groups[77]; in the Third Republic the presidency was too weak while ministerial incompetence and instability limited governmental efficiency[78]; and state-run enterprises would be better off under private management[79-82]. What is significant is that Fayols critique was not the usual market-based one, but was predicated on a theory of administration derived in part from a critique of the joint-stock company, a fundamental institution of modern capitalism.

Fayol: from experience to theory 31

JMH 1,3

32

Conclusions Examination of Fayols career at Comambault makes clear the extent to which his often uncontextualized prescriptions were derived from flesh-and-blood conflicts within the managerial hierarchy. The most important of these resulted in acceptance of the relative autonomy of labour in the matter of the way work was carried out (based on the example of the miners crews) and establishment of the CEOs power and independence with respect to the board of directors. Fayolism embodied the self-validating ideology of the manager in much the same way as Taylorism did for the engineer. Fayols sustained effort to show that his administrative principles applied to all social organizations from the family to the state was an important element in the managers argument that he deserved a pre-eminent role in society. The firm itself, conceived of as the union of capital and management, must remain the CEOs primary focus. To the extent that actions are decided on the basis of the needs of specific industrial processes or installations, the interests of the firm as a whole suffer. This was the single most important lesson Fayol drew from Comambaults inability to deal effectively with the demise of the Commentry mine. He saw his handling of the situation as the basis of Comambaults resurrection. By underscoring the primacy of the firms interests and formulating a set of principles to govern management, Fayol helped provide the basis for rethinking labour policy in large industrial firms. Because of the need to attract, discipline and control significant numbers of workers, these firms had developed paternalist ideologies based on the creation of communities of labour under the control of industrial managers. Fayolism implicitly removed the rationale for many of the authoritarian elements of nineteenth-century industrial paternalism by arguing not that they were wrong in themselves (because, for instance, they abridged workers civil liberties), but because the growth of unions and the consolidation of the republican state made them contrary to the firms primary goal of efficient operation. Because Fayols theorizing about the firm provided criteria other than market success or failure to judge an organization, it proved particularly amenable to theorizing about the state. For Fayol both authoritarian and democratic regimes would have to give way to the administrative state. In modern France, the state no longer faced a society of atomized citizens; it confronted instead powerful organized corporate groups. Only a state endowed with a more powerful presidency, conceived on the model of the CEO, and more stable ministries could command and co-ordinate these bodies. To conclude, an examination of Fayolism in light of Fayols career does not necessarily support critiques of his work as lacking the universality he claimed for it because it was formulated in response to specific circumstances[83,84]. (After all, no theory based on empirical observation can claim immaculate conception.) However, such an exercise does provide a better sense of the type of problems which Fayolism potentially addresses, and expand the scope of Fayolism by revealing elements of his thought which, because they were obscured or absent from Fayols published work, have eluded commentators.

Notes and references 1. Rials, S., Administration et Organisation 1910-1930, Editions Beauchesne, Paris, 1977, p. 94. 2. Wrege, C.D. and Perroni, A.G., Taylors pig-tale: a historical analysis of Frederick W. Taylors pig-iron experiments, Academy of Management Journal, Vol. 17, 1974, pp. 6-27. 3. Fayol, H., Ladministration positive dans lindustrie, La Technique Moderne, Vol. I, 1918, p. 74. 4. Such managerial miracles are, of course, open to question. In what amounts to heresy, Jean Chevalier, president of the Comit National de lOrganisation Franaise (descendant of Fayols Centre dEtudes Administratives), wrote, To tell the truth, it was not Fayols presence at the head of the Socit de Commentry-Fourchambault which restored profitability. It was the rise in market price of pig iron from 57 francs in 1888 to 70 francs in 1890, a rise which must be placed in the context of wages which remained at their lowest level in the last twenty years of the [nineteenth] century[5]. 5. Chevalier, J., LOrganisation du Travail, Flammarion, Paris, 1946, p. 64. 6. Fayol, H., De limportance de la fonction administrative dans le gouvernement des affaires, Bulletin de la Socit dEncouragement pour lIndustrie Nationale, No. 129, 1918, pp. 27-57. 7. Fayol, H., Observations et expriences personnelles, no date, p. 6, in the Archives Fayol (hereafter AF). 8. The AF were in the possession of Michel Brun of the Comit National de lOrganisation Franaise in Paris at the time I consulted them. 9. Fayols best-known effort to avoid bureaucratization while maintaining the principle of unity of command was the Fayol bridge: two individuals of equal rank in different divisions of an enterprise who need to communicate obtain the authorization of their immediate superiors rather than have their messages ascend and descend the hierarchical chain of command. Fayol also recommended that managers hold frequent regular meetings with subordinates. 10. Heures des rapports, rapports verbaux, rapport general, January 1880, AF. 11. The minutes of the weekly Conferences D held at Decazeville are preserved in the Archives Nationales in Paris (hereafter AN) 110AQ. 12. Aitken, H., Taylorism at Watertown Arsenal, Harvard University Press, Cambridge, MA, 1960. 13. Fayol, H., Boisage, 1878, AN 59AQ26. 14. Fayol,H., Abattage, no date, AF. 15. Blazy, Note sur les houillres de Commentry, 1 March 1881, AN 110AQ7 (3). 16. Trist, E.L. and Barnforth, K.W., Some sociological and psychological consequences of the longwall method of coal-getting, Human Relations, Vol. 4, 1951, pp. 3-38. 17. Wilbois, J. and Vanuxem, P., Essai sur la Conduite des Affaires et la Direction des Hommes, Payot, Paris, 1919, p. 131. 18. This is not to say that the independence of the mining crew did not decline in the late nineteenth and early twentieth centuries (see [19]). 19. Reid, D., The Miners of Decazeville, Harvard University Press, Cambridge, MA, 1985. 20. According to Fayol, workers devoted 5 per cent of their time to administrative tasks. For Fayolist instruction of apprentices in administration see [21]. 21. Reid, D., Guillaume Verdier et le syndicalisme rvolutionnaire aux usines de Decazeville (1917-1920), Annales du Midi, Vol. 96, 1984, pp. 181-3. 22. Merkle, J., Management and Ideology, University of California Press, Berkeley, CA, 1980, pp. 159-60. 23. de Gaudemar, J.-P., La Mobilisation Gnrale, Editions du Champ Urbain, Paris, 1979, pp. 205-6. 24. Piore, M. and Sabel, C., The Second Industrial Divide, Basic Books, New York, NY, 1984.

Fayol: from experience to theory 33

JMH 1,3

34

25. Fayol, H., Notes, 3 February 1882, AF. 26. Fayol, H., Le Directeur Gnral, no date, p. 15, AF. 27. It appears that the Comambault general director Stphane Mony, who was enamoured with the Commentry mines he had once directed, may have suppressed Fayols findings for some time[28]. 28. Minutes of the Conseil dAdministration of the Socit Anonyme de CommentryFourchambault (hereafter CA of SCF), 16 March 1881, AN 59AQ7. 29. CA of SCF, 10 November 1884, AN 59AQ7. 30. Fayol, H., Comptabilit-administration, 14 January 1924, AF. 31. CA of SCF, 7 July 1888; 16 April 1891; 18 June 1891, AN 59AQ8. 32. CA of SCF, 8 March 1892, AN 59AQ9. 33. Socit Anonyme de Commentry-Fourchambault, Compte-rendu de lAssemble Gnrale de la Socit Anonyme de Commentry-Fourchambault, Paris, 1892, p. 48. 34. Fayol, H., Institution du bien tre, 13 December 1913, AF. 35. Guitton, H., Fte du Travail la Mine de Commentry, Imprimerie de Crpin-le-Blond, Montlucon, 1873. 36. The Saint-Simonians were a group of young men and women who promoted technocratic, communitarian ideas in the early 1830s. 37. Le Play was the leading nineteenth-century French conservative social theorist and social observer. He and his followers pioneered in the development of the monographic study of lower class families. 38. Mony, S., Etude sur le Travail, Hachette, Paris, 1877. 39. Late in life Fayol re-analysed this monograph in terms of his administrative theory to argue that the principles of administration were deeply rooted in the French people[7, pp. 5-6]. Elsewhere Fayol wrote that The family life of lite workers and foremen is often a model of foresight and organization of which the wife is the principal artisan and the reason for which is the desire for social advancement, for the children at least[6, p. 45]. Like other writers in the tradition of Le Play, Fayol was most comfortable dealing with workers who had ties to rural life or who were in the upper strata of the working class. 40. Fayol, H., Des relations de la fonction administrative avec la politique, la religion, la science, les syndicats, 16 February, no year, AF. 41. Fayol, H., Des relations extrieurs, p. 2, 4 January 1914, AF. 42. Reid, D., Industrial paternalism: discourse and practice in ninteenth-century French mining and metallurgy, Comparative Studies in Society and History, Vol. 27, 1985, pp. 573-601. 43. Blancpain, F., Les carnets indits de Fayol, Bulletin de lAdministration Publique, No. 28, 1974, pp. 612-13. 44. Reid, D., The role of mine safety in the development of working-class consciousness and organization: the case of the Aubin Coal Basin, 1867-1914, French Historical Studies, Vol. 12, 1981, pp. 98-119. 45. CA of SCF, 31 July 1890, AN 59AQ8. 46. Fayol, H., Considrations gnrales, 24 December 1923, AF. 47. Projet de rponse au questionnaire de la Commission Parlementaire des Mines, (Fayol to the Comit central des houillres franaises), 28 March 1903, AN 40AS234. 48. Fayol saw such enterprises as doomed: The owner-run business ends up incapable of being well managed; capable managers are lacking in the familyThus, it is not only the need for capital which leads to the joint-stock company, but also the need to have a chef. Wasnt it the same need which made the absolute monarchy give way to the constitutional monarchy[49,50].

49. Fayol, H., Notes, 3 July 1924, AF. 50. Fayol, H., Notes, 5 July 1924, AF. 51. La Socit Anonyme Commentry-Fourchambault et Decazeville 1854-1954, La Socit Anonyme Commentry-Fourchambault et Decazeville, Paris, 1954, pp. 110-11. 52. de Boisrobert, C.H., Nos tudes financires. Socit Anonyme de Commentry-Fourchambault et Decazeville, LEssor, 1917, in AF. 53. CA of SCF, 6 April 1877, AN 59AQ7. 54. CA of SCF 15 May 1880, AN 59AQ7. 55. CA of SCF, 12 August 1887; 5 March 1888 (quoted), AN 59AQ8. 56. Mony, A., Histoire dune Mine (Commentry), Hachette, Paris, 1911. 57. CA of SCF, 27 April 1880, AN 59AQ7. 58. Report by Fayol to CA of SCF, 8 May 1900, AN 59AQ1O. 59. Allocution de M. Henri Fayol, son fils, in Le Cinquantenaire de la Doctrine Administrative, 1967, pp. 11-12. 60. CA of SCF, 18 June 1891; 8 March 1892, AN 59AQ8. 61. Fayol, H., Notes, 9-10 June 1924, AF. 62. Fayol, H., Notes, 6 June 1889, AF. 63. CA of SCF, 18 May 1893, AN 59AQ9. 64. CA of SCF, 27 October 1898, AN 59AQIO. 65. Fayol, H., Prvoyance, 23 April 1899, AF. 66. Fayol, H., Conversation avec M. le Prsident du Conseil, 16 October 1912, AF. 67. In his notes on Grands chefs[68], Fayol chose as his example L. Lvque, appointed director at Decazeville in 1910. It is significant that when Lvque wrote a history of the Decazeville metallurgical industry, he strongly criticized the boards of directors of the firm which had preceded Comambault at Decazeville for their incompetent and meddling management[69]. 68. Fayol, H., Grands chefs, 20 November 1913, AF. 69. Levque, L., Histoire des Forges de Decazeville, Socit de lIndustrie Minrale, Saint-Etienne, 1916, pp. 79-84, 89. 70. Fayol believed that analysis of administration was a better way of assessing an institution than profitability. A mine produces a profit of one million. The shareholders are delighted. Bravo for management. Other mines earn half as muchBut couldnt better management make much more, 1.5 million francs, 2 million? We dont know[71]. 71. Fayol, H., Notes, 21 September 1923, AF. 72. Fayol, H., Notes, 28 June 1924, AF. 73. While pursuing the idea of state reform from the perspective of the CEO, Fayol also recognized that his conception of the contemporary state involved a transformation of the role of the firm in the political sphere. Within the company this led to a further separation of administrative and technical functions. At Decazeville, for instance, Fayol placed the previously separate mines and factories under a single director in 1918 in part because of the need for a single individual to handle the increased dealings with state officials[74-76]. From a broader perspective, Fayol wrote after the First World War that electoral abstention had suited the 30-year period which had just passed, but that the rise of new organizations within society required a change in this posture. Businessmen would re-enter the political realm through their professional associations. The individual actions of heads of industry give way, little by little, to the more powerful, more enlightened and more thought out collective action of the Comit des Forges and the Comit des Houillres; the experience and the competence of businessmen is condensed in these Comits which are more and more listened to by governement officials. Thus each business is no longer isolated before the State nor before the unions; the personal actions of the chef are not suppressed, but transformed[7, p. 95]. 74. CA of SCF, 20 August 1918, AN S9A Q12.

Fayol: from experience to theory 35

JMH 1,3

75. 76. 77. 78. 79. 80. 81. 82. 83. 84.

36

Fayol, H., Notes, 22 July 1925, AF. Fayol, H., Notes, 30 October 1923, AF. Fayol, H., Qualits. Formation. Prsident de la Republique, 19 December 1912, AF. Fayol, H., Notes, 22 September 1923, AF. LIndustrialisation de lEtat, Bulletin de la Socit de lIndustrie Minrale, Vol. XV, 1919, pp. 237-74. Fayol, H., Lincapacit industrielle de lEtat: les PTT, Revue Politique et Parlementaire, Vol. 56, 1921, pp. 365-440. Fayol, H., Rapport Prsent par M. Andr Citron au Nom de la Commission Charge dtudierdes Monopoles des Tabacs et des Allumettes, Imprimerie Nationale, Paris, 1925. Blancpain, F., Les Carnets, Bulletin de lAdministration Publique, No. 29, 1974, pp. 101-16. Drucker, P., Management, Harper & Row, New York, NY, 1974, p. 563. Chandler, A. Jr and Daems, H., Administrative coordination, allocation and monitoring: concepts and comparisons, in Horn, N. and Kocka, J. (Eds), Recht und Entwicklung der Grossunternehmen im 19. und fruhen 20. Jahrhundert, Vandenhoeck und Ruprecht, Gottingen, 1979, pp. 44-5.