6 basic functions of the company according to Fayol

Functions related to activities such as production, buying, selling, advertising, finance, and accounting differ from company to company. But management functions are common to all business units and non-profit organizations. Henri Fayol, the founder of modern management theory divided into 6 basic functions all the activities of the organizations.

The concept of administrative management in which the 14 principles of management are exposed was given by Henry Fayol (1841-1925) in his book published in 1916 under the name "General Directorate and Industrial".

These principles have laid the foundations for what is today called modern management theory. This theory is still applied by some of the famous companies like Apple, Google, Microsoft, etc. Hence, he is known as the "father of modern management theory."

Short biography

Creator of the Classical Theory of Administration, Jules Henri Fayol was a mining engineer, trained in France in 1860, by the Escola Nacional Superior de Minas de Saint-Étienne. He was born in Istanbul, in 1841, with his father, also an engineer, as a reference. His investigations were directed to the work carried out in the organizations as a whole, creating a theory that analyzed the processes within the company from top to bottom, contrary to what was proposed by Henry Ford, Frederick Taylor.

Along with these two theorists, he was one of the researchers and scholars who made the most contributions to modern management as we know it today. Among his main achievements is the creation of the Center for Administrative Studies, which brought together researchers, academics and people interested in the administration as a whole, and the work "General Industrial Administration", begun in 1916.

Fayol worked for an iron and coal company called Commentry-Fourchambault in France for 58 years, where he was a mining engineer in the early years and eventually became the CEO of the company. He gained extensive knowledge of issues at all levels of the organization during his growth period.

Therefore, through all of his experience and learning, he developed the 14 principles for superior management of any organization. Henry Fayol himself has followed these principles throughout his managerial career. Therefore, his motive was to provide guidance to all other managers for the efficient management of their organizations.

What is management and its principles?

Management can be seen as an effort made to achieve the goals, objectives and vision of the organization through planning, organizing, staffing, directing and controlling all business activities in consequence. These principles establish the guidelines and standardize the course of action of the administration to manage a business organization effectively and efficiently.

According to the principles of management, they refer to the fundamental truth that is generally applied to daily business operations to ensure effective management of the organization.

Management principles are identified facts that are developed through individual experiences and can be applied to all types of business entities. To learn more about these principles, let's review their following characteristics:

• They are all equally important: all management principles are equally important in business organization.
• Universally applicableThese principles can be applied to any type of organization, large or small or belonging to any industry.
• Regulates human behavior: The application of the management principles helps the organization to monitor and control the behavior of the personnel.
• Flexible in nature: the applicability of these principles varies from organization to organization.
• Develop the cause and effect relationship: The management principles establish a relationship between each action and its consequences in the short and long term.

The 6 management functions of Fayol

Henry Fayol awarded six managerial functions, which are carried out in almost all organizations. Therefore, we can say that these functions are universally applicable to all companies in the world. Let's now understand each of these in detail below:

1. Forecast: the first function of Fayol's management is forecasting. It tries to analyze present and past information to predict the future and plan accordingly.
2. Planning- Top management plans an appropriate course of action, based on business foresight.
3. Organization: The management below must systematically organize the resources, that is, raw material, capital and human resources according to the planning.
4. Command: Managers give instructions, directions, and orders to subordinates in this role.
5. Coordination: In this role, management must ensure proper synchronization between all departments. To do this, weekly meetings can be held with the heads of all departments.
6. Control: The last management function of Fayol is control. Managers need to evaluate staff performance by setting standards, comparing actual performance with desired performance, and implementing corrective measures accordingly.

6 basic functions of the Company according to Fayol

In his concept of administrative management, Fayol affirmed that there are six significant activities that are carried out in all types of organizations. These activities include: 6 basic functions of the company according to Fayol.

1. Technique: The first basic function of the company according to Fayol is the technique. The technical part includes the engineering of products or processes and the production of goods or services.
2. Commercial: All marketing functions, including procurement, sales, distribution, and promotion, are part of the business.
3. Financial: The financial activity consists of the acquisition of capital and its management.
4. Safety: The protection and security of resources, that is, personnel, capital and assets, is under security.
5. Accounting- Accounting activity comprises accounting, record keeping, reporting, cost accounting, inventory management, etc.
6. Managerial: The last basic function of any company according to Fayol is the managerial function. Managerial activity includes the various management functions, that is, planning, organizing, directing, coordinating and controlling business operations.