Journal of Participation and Empowerment

Running head: THEORY
THEORY
Name of the Student
Name of the University
Author Note

Introduction
The business theories can be essentially stated to be the scientific stated theories which
may be used by the various enterprises in order to ensure successful operations are being
undertaken adequately and in consideration of this, the business is being able to ensure long term
achievement of associated operations (Davenport & Prusak, 1998). The main aim of the report is
to outline particular business theory, understand its aims and objectives and the applicability to
the operations of the business. The theory which has been chosen for the purpose of the analysis
is the Administrative theory by Henri Fayol and in consideration to this; it is effective to state
that the latter half of the report will discuss the Impact of business shifts on performance levels
of the firm (de Geus, 1997).
Administrative theory by Henri Fayol
Henry Fayol came up with six integrated functions of management, each of which were
derived and defined in a conjunction with 14 associated management principles and core ideas.
These principles are actively used throughout the enterprise and associated operations even today
and it becomes effectively important to note that, these principles are widely made use of in
various enterprises even today (Galbraith, 2002). In consideration with this, it becomes effective
to note that, Fayol came up with a series of functions as well which will have an influence on
organizational welfare and effectiveness. In consideration of this, various management functions
have also been laid down by Fayol which will further assist in ensuring overall effectiveness.
These functions are as follows:
 Forecasting

 Planning
 Organizing
 Commanding
 Coordinating
 Controlling
Although the different parties tend to combine such associated forces to one single
function but it has to be critically noted that for an enterprise to be able to achieve all the
goals successfully, it is critical to state that, when the business operations are abided by using
these functions, the end results can be understood to be more viable in nature (Greiner &
Metes, 1995).
The associated principles which were outlined by Henri Fayol can be mentioned to be as follows:
 Division of work – This states that the employees need to have operations in those areas
where they can function the best.
 Authority –This means that the management has a responsibility towards the employees
and abiding by this, it needs to ensure orders are taken seriously (Snyder & Wenger,
2000).
 Discipline – The discipline of the enterprise has to be carried out in a manner such that
the employees are obedient and the workplace functions are carried out well.
 Unity of command – The unity of command needs to be carried out in a manner that the
employee must follow the instructions of the manager(Ikuhiro & Hirotaka, 1995).
 Unity of direction – Here all teams must have one common goal which they should work
upon effectively.

 Subordination of individual interests – Here the team comes before the individuals and
the decisions need to be taken accordingly.
 Remuneration – Here the monetary and the non-monetary aspect needs to be managed
well whereby the employees should be motivated.
 Centralization – The centralization of the activities needs to be undertaken in a manner
such that the decision making power lies with one authority only.
 Scalar chain – The scalar chain can be described to be the fact that all groups come under
a particular organizational chain and the various instructions have to be abided by
accordingly.
 Order – The orders need to be followed and that the professionalism should be
maintained.
 Equity – All employees in a workplace need to be treated well.
 Stability of tenure of personnel – The workplace should limit the turnover and ensure that
loyal employees function for the firm (Konno & Nonaka, 1998).
 Initiative – The enterprise would be required to undertake various initiatives with the help
of which the operations shall be successful.
 Esprit de corps – The employee morale needs to be uplifted throughout
According to Kotter and Heskett (1997), there are certain performance aspects which
need to be abided by accordingly. In consideration with this, it is effective to state that, the
manager needs to abide by these to ensure successful operations.

Application to the service industry
The industry where these principles and theoretical aspects can be considered to be the
most effective can be mentioned to be in the case of the service industry. The service industry
can be understood to be one of the finest performing industries and in association with this, it is
effective to state that, as they deal with the needs of the different customers, it can be understood
to be critical for them to ensure that they are being able to abide by the associated actions to
ensure long term success in an effective manner (Lawler, 1996).
Recommendations
The recommendations being provided can be agreed to be as follows:
 The service industry would be required to deal with the employees in a successful
manner.
 It is essential that the firm is able to attain all its associated goals and objectives.
 In consideration to this, the employee moral has to be lifted and the employees in return
need to respect their associates accordingly.

Impact of shift in the business mindset on the business performance level
The business mindset although needs to be aimed high and set at achieving the
organizational goals successfully, it is relevant to see to it that the firm is being able to employ
the use of relevant tools and aspects in the right manner. In association with this, it is effective to
understand that. In case a business is adequately directed towards the achievement of goals but
demands employee overtime and sacrifice, then in this scenario, thee performance level is
expected to drop because the employees feel pressurized (Lawler, Mohrman & Benson, 2001).
The team values deplete and the firm is not able to perform well.
Redesigning a new organization to improve higher performance levels
Hence, it can be mentioned that the example of the Samsung can be taken in this scenario
whereby the performance levels can be improved by adopting a new organizational structure and
design. At present the firm follows a functional design and the hierarchal structure, however, it is
recommended that if the firm employees a flat structure with a network design, the operations
will turn out to be better (Stonehouse & Pemberton, 2011).

References
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