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.