Question

Consider the following statements regarding Fayol's classification of activities in an industrial undertaking:

1. Managerial activities encompass planning, organization, command, coordination, and control, distinct from technical or commercial functions.

2. Financial activities involve the search and optimum use of capital, while security activities focus on stock-taking and balance sheets.

3. Fayol emphasized that administrative ability predominates at higher organizational levels, advocating training for all employees.

• A. 1 and 3 only
• B. 1, 2 and 3
• C. 2 and 3 only
• D. 1 and 2 only

Answer 1

Answer:

A. 1 and 3 only

Henri Fayol's Contributions to Management Theory

• Henri Fayol, a French mining engineer and director, is renowned for his 14 Principles of Management and his classification of industrial activities. His work, first published in French in 1916, provided a foundational framework for modern management thought.
• Fayol categorized the activities of an industrial undertaking into six distinct groups:
• Technical activities: Relating to the production of goods or services.
• Commercial activities: Related to buying, selling, and exchange.
• Financial activities: Concerned with the search for and optimum use of capital.
• Security activities: Pertaining to the protection of property and persons.
• Accounting activities: Including statistics, cost keeping, and price recording.
• Managerial activities: Encompassing planning, organizing, commanding, coordinating, and controlling. These are considered separate from the other five functional areas.
• Statement 1 is correct: Fayol clearly distinguished managerial activities (the functions of management) from the operational technical and commercial activities.
• Statement 2 is incorrect: While financial activities do involve the search for and optimum use of capital, security activities are defined by Fayol as the protection of property and persons, not solely stock-taking and balance sheets, which fall more under accounting.
• Statement 3 is correct: Fayol observed that the importance of managerial or administrative ability increases with the level of the organization. Top managers spend more time on administrative tasks than on technical ones. He also advocated for general management training to enhance this ability across all levels.
• Fayol's emphasis on the universality of management principles and the importance of administrative skill has had a lasting impact on management education and practice worldwide.