Scientific Management Theory and Administrative Principles Theory

This report discusses the strengths and limitations of Scientific Management Theory and Administrative Principles Theory. It provides examples of organisations that use these theories till date. The report also includes the 14 principles of management by Henri Fayol and how these theories have been modified by business organisations to achieve success in the international market.

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Executive summary
This report has been prepared to gain a deeper insight the two most talked about theories in
the business world i.e. Scientific management theory by Frederick W. Taylor and the
Administrative principles theory by Henry Fayol. The report discusses the strengths and
limitations of the two theories and provides examples of organisations that use these theories
till date.

Table of Contents
Executive summary............................................................................................................2
Introduction.......................................................................................................................4
Scientific Management Theory.....................................................................................................4
Administrative Principles Theory..................................................................................................4
Strengths and limitations...................................................................................................5
Scientific Management Theory.....................................................................................................5
Administrative Principles Theory..................................................................................................5
Organisation example........................................................................................................6
Summary............................................................................................................................6
Conclusion.........................................................................................................................6
Bibliography.......................................................................................................................7

Introduction
Scientific Management Theory
The theory of Scientific Management Theory was one of the foremost theories that paved the
way for future researches in the field. The theory was developed in 1911 by Taylor when the
concept of ‘Rule of Thumb’ was prevalent in business organisations (Aitken, 2014). Taylor
also listed four principles in his theory of scientific management, which are:
- The need to replace the rule of thumb with scientific study
- Instead of leaving the employees to train themselves, follow a scientific approach
towards their selection, training and development
- Increase co-operation with workers in order to assess the effectiveness of scientific
methods being used
- Equally dividing the work between managers and workers so that they can work
unitedly (Waring, 2016)
Administrative Principles Theory
This is another pioneer theory in the subject of business management that was developed by
Henri Fayol. Henry Fayol worked in a coal-mining business and developed a theory that
comprised of 14 principles related to the structure of an organisation and management
(Edward, 2017). Fayol’s 14 principles of management are discussed below:
1) Division of work  the work should be equally divided amongst employees
2) Authority  the managers in an organisation should be empowered to give orders and
feel responsible for the overall performance
3) Discipline  business organisations should maintain discipline using whatever means
possible
4) Unity of command  there should be a unity of command i.e. employees should get
their orders from one source only.
5) Unity of direction  work teams with same objectives should work under a single
direction
6) Remuneration  the employees should be given a fair remuneration
7) Subordination of individual interests  the organisational interests should be greater
than individual interests

8) Centralization  the employees should be closely related to the decision making
process
9) Scalar chain  employees should have a clarity of their position in the hierarchy
10) Order  the workplace should be in order and hygienic
11) Equity  employees should be treated fairly at all times
12) Stability of tenure of personnel  employee turnover should be reduced by the
managers
13) Initiative  employees should be given freedom and empowerment to create plans
14) Esprit de Corps  time spirit and unity should be promoted in business organisations
(Shafritz, et al., 2015)
Strengths and limitations
Scientific Management Theory
The scientific management theory has certain advantages of its own. It allowed business
organisations to shift their focus on human resource management to ensure enhanced
production, ability to control, decrease autocracy, reduce operational costs, improve decision
making process and offer better customer services. The theory also had certain disadvantages
or limitations as it required a huge capital investment for achieving the desired result. It also
stressed upon the need to ensure proper management. The theory can also increase
bureaucracy in business organisations which may lead to job dissatisfaction amongst the
employees (Hcamat College Park , 2017). In certain cases, applications of machinery to save
time can also lead to increased unemployment. Relying upon scientific management theory to
fix time for every task can make the employees rush into their work, which can cause stress
and loss of efficiency.
Administrative Principles Theory
One of the biggest advantages of administrative principle theory is that it is reliable till date
even though it created a lot of controversies in the past. The theory was one of the pioneer
theirs that lead to the change and evolution of the global business world. Even in the 21st
century, relying upon his 14 principles of management can improve the way in which human
resources are managed by business organisations, which can definitely have a positive impact
on the overall performance.

Some limitations of the theory are that the findings of this theory were based on Fayol’s own
experience and not on an empirical research (Mostlyeconomics, 2010). Secondly, it is more
organisation oriented and fails to understand the needs of the customer. Thirdly, the theory
was developed in a very different phase but in the modern day world, there is a greater
requirement for the workers to be more creative, innovative and to be able to solve problems.
Organisation example
The theories developed by Taylor and Fayol were developed in times when human resource
management did not even exist. In the present day world, the business scenario has
dramatically changed and it has become difficult to manage human resources while trying to
achieve organisational success side by side. Therefore, business organisations have stick to
these theories but have modified them to a certain extent, in order to meet their own goals and
objectives. For example, Cadbury, one of the biggest multinational firms, still relies upon
Fayol’s principles, such as division of work, authority & responsibility, discipline, etc. (Jaji,
2015) On the other hand, Ford is one company that still relies upon Taylor’s scientific
management theory even in the modern day production world (Hounshell, n.d.).
Summary
The two theories by Taylor and Fayol have their own distinct advantages and disadvantages
but the fact that they were developed ages ago and that the business world has greatly
evolved has put some limitations to the theories. Even then, there are a number of business
organisations that have been modifying these theories to their own benefits and using them to
achieve success in the international market, which has been discussed in the organisation
example section.
Conclusion
Both the theories are masterpieces in their own ways and choosing one theory out of the two
is totally dependent on the environment factors in which a company operates, its
organisational goals and objectives and its mission and vision statements.

Bibliography
Hounshell, D. A., n.d. The Same Old Principles in the New Manufacturing. [Online]
Available at: https://hbr.org/1988/11/the-same-old-principles-in-the-new-manufacturing
[Accessed 27 April 2018].
Jaji, S., 2015. 14 principles of fayol applied in cadbury company. [Online]
Available at: https://prezi.com/nap_mk6ocdra/14-principles-of-fayol-applied-in-cadbury-
company/[Accessed 26 April 2018].
Aitken, H., 2014. Scientific Management in Action: Taylorism at Watertown Arsenal.
s.l.:Princeton University Press.
Waring, S., 2016. Taylorism transformed: Scientific management theory since 1945. s.l.:UNC
Press Books..
Edward, R., 2017. An Elaboration of the Administrative Theory of the 14 Principles of
Management by Henri Fayol. [Online] Available at:
http://ijeer.net/assets/paper/IJ0820172018/f_IJ0820172018.pdf[Accessed 27 April 2018].
Shafritz, J., Ott, J. & Jang, Y., 2015. Classics of organization theory. s.l.: Cengage Learning.
Mostlyeconomics, 2010. Benefits and Limitations of Taylor rule. [Online]
Available at: https://mostlyeconomics.wordpress.com/2010/01/20/benefits-and-limitations-
of-taylor-rule/[Accessed 28 April 2018].
Hcamat College Park , 2017. Advantages And Disadvantages Of Fayols Concept
Management Essay. [Online] Available at: https://hcamatcollegepark.com/advantages-and-
disadvantages-of-fayols-concept-management-essay-2425.html[Accessed 27 April 2018].