Classification and Functions of Management - Business Practice Study

Classification and Functions of Management – Business Practice Study

Classification and functions of management – business study, online study business practice, elements of management, my study online of business management.

Taylor and Gilberth attempted to develop management techniques that might be used on the and file level. But they failed to deal with management as an entirely separate function. It was Fayol who made the first most famous analysis of management itself. He is regarded as the her of modern management science.

Beary Fayol (1841-1925)

Heary Fayol was born in France in 1841. He graduated in 1860 and joined as a mining engineer French Mining Company (Commentry- Fourchambault-Decanzevile) and rose to the position Chief Managing Director because of his outstanding abilities in 1888. From 1888 to 1918 he be Managing Director of the company.

Through his long practical experience as a successful trialist, Fayol developed a general theory of management. In 1916, he published the book nistration Industrielle et Generale in French which was translated into English in 1929 under bele, General and Industrial Management. But only a few hundred copies were published and it only in 1949 that the English edition of this important book was freely available in the Puted States.

Fayol’s major contribution was:

1. To identify and classify business activities.

2. To identify management as separate set of skills or functions.

3. To classify functions of management into five elements. 4. To develop universal principles of management.

5. To emphasise managerial qualities.

Classification and Functions of Management


Fayol classified all industrial or business activities into six groups as given below:

(i) Technical activities consisting of production or manufacture.

(ii) Commercial activities consisting of buying, selling and exchange.

(iii) Financial activities concerning search for optimum use of capital.

(iv) Security activities concerning protection of property and persons. (Accounting activities concerning with maintenance of accounts including statistics.

(v) Managerial activities consisting of planning, organising, commanding, co-ordinating and controlling.

Although business or industrial undertakings differ from one another in nature, size or complexity of operations, yet these six activities are common to all enterprises. According to Fayol, frst five activities are quite well known, and, therefore, he has concentrated on the analysis of Rath, Le managerial activities.


Fayol regarded the element of management as its functions. In the words of Henry Fayol, “To

is to forecast and plan, to organise, to command, to co-ordinate and to control” Thus, Fayol classified the elements or functions of management as follows:

1 Forecasting and Planning     

2. Organising.

3. Commanding.

 4. Co-ordinating, and

 5. Controlling.

Forecasting and Planning:

Fayol regards forecasting as the basis of planning. Planning means looking ahead or to foresee. To foresee means “both to assess the future and make provisions for it.” In the words of Fayel, “To plan means to foresee and provide means for the future. The plan of action is at one and the same time the result envisaged, the line of action to be followed, the stages to go through and the methods to use.”

Thus, the process of planning includes:

(a) the identification of organisational goals

(b) the line of action to be followed ;

(c) the various stages through which the action would pass ; and

(d) the method to be used to achieve the desired goals.



Fayol took the broad view in describing the organising function of management. According to him, “To organise means building up the dual structure, material and human, of the undertaking. To organise is to provide the organisation with everything useful to its functioning- raw materials, tools, capital and personnel.” He was of the opinion that organising function of managers was coe of establishing human and material relationships and to achieve this, a sound

organisation must have the following:

(a) A single competent and energetic guiding authority.

(b) Clean definition of duties at all levels.

(c) Efficient selection of personnel

(d) Minimum of paper work.

(e) Unity of command.

(f) Initiative and responsibility.

(g)Reward for efficiency.

(h) Proper control.

(i) Clear and precise decision-making

(j)Disincentives for faults and errors.

(k) Supremacy of general interest in relation to individual, etc.


Commanding implies setting the business going to get the desired optimum results from the subordinates. Fayol conceived the function of command as the ‘operation of organisation. He emphasised that the managers must possess the requisite personal qualities and knowledge of the principles of management. So as to command effectively, one must:

(a) Have a thorough knowledge of his personnel.

(b) Have capacity to spot the right and competent workers so as to eliminate the incompetent.

(c) Set a good example, ie. leadership.

(d) Conduct periodic assessment or audits of performance

(e) Be wellversed in agreements binding the business and its employees.

(f) Have lively and constant touch with subordinates.

(g) Aim at making unity, energy, initiative and loyalty prevail among personnel.


Co-ordinating refers to the process developed by a manager to secure an orderly pattern of group effort among his personnel through unity of action in the pursuit of common goals. Fayol considered coordinating as the harmonizing activity in a business.

According to him co-coordinating is “to accord things and actions in their rightful proportions, and to adapt means to ends.” Thus, coordinating calls for a sense of proportion, eg, stocks or purchases must be in proportion to the production needs. Fayol suggested that the means or resources available have to be adjusted to the ends or desired goals.


The function of controlling is to ensure that everything is done in accordance with the established rules and instructions given to the workmen. In the words of Fayol, controlling is the task of “verifying whether everything occurs in conformity with the plan adopted; the instructions issued and principles established. The purpose of control is to point out weaknesses and errors in order to rectify them and prevent their recurrence.

He suggested that effective control must be:

(1)  prompt:

(ii) followed with sanctions and

(iii) include measure to prevent recurrence of variances or errors.

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