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Henri Fayol’s Management Theories and Their Relevance Essay

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Updated: Jun 24th, 2020


The business environment has increasingly become competitive. Changing technological landscape and globalization have led to development of new markets and intercontinental movement of labor. Various studies have indicated that liberalization of markets will necessitate a need for regularization of market factors such as business language, policies, and business processes among others.

Inventiveness and modernization have become the pillars of success for many businesses. Therefore, change management is a crucial subject for many businesses that need to keep in par with dramatic changes in every sphere of the business environment. This essay provides an insight into the theories of early proponents of management through examination of the challenges that environmental issues present to contemporary businesses.

Literature Review

Business management determines an organization’s competitiveness in different environmental landscapes. Numerous theories have been developed to solve management challenges in organizations (Parker & Ritson 2005). These challenges occur either within or outside the organization. Henri Fayol is one of the prominent scholars who developed various theories in a bid to solve management issues. The management principles that he developed significantly altered organizational management systems. These theories are still in use today.

Precisely, Fayol developed 14 principles that include division of work, the scalar chain, authority, and remuneration among others (Parker & Ritson 2005). The organization is a system of units that work together to promote accomplishment of overall goals and objectives. Parker and Ritson (2005) posit that contextual variables such as group atmosphere, power position, task structure, and the leader’s psychological orientation affect group performance. Situational favorableness and leadership style interaction determine the overall performance of an organization.

Challenges that Environmental Issues Present to Businesses

Environmental issues present a multitude of challenges to businesses worldwide. Firstly, there has been increased choice of work and many people have opted to become independent (Davies & Ibeh 2009). People have developed a taste for the kind of tasks they perform, the nature of employment environment, and the type of their employers. In the context of this essay, contemporary businesses encounter many challenges that emanate from environmental issues such as emission of gasses to the atmosphere, industrial waste disposal, and sustainable utilization of raw materials among others.

Organizations encounter most of these challenges regardless of whether they belong to the service sector or the industrial sector. Organizations that lie within the industrial sector have to deal with emissions and utilization of sustainable raw materials. The emissions that the factories release to the atmosphere are limited by the standards that have been set by the Kyoto protocol. On the other hand, organizations that operate within the service industry are forced to engage in environmental protection programs by cleaning dumpsites, planting trees, and sponsoring organizations that are involved in environmental protection among other functions.

Implications of the External Environment and Stakeholder Environment

Devadas, Silong, and Krauss (2011) reveal that the external organizational environment has always had an impact on organizational functions such as policy formulation and initiation of change. Organizations have to work within certain regulations. Furthermore, the organizations have to observe the decisions that are made by other organizations, which affect their operations.

The organization’s stakeholder environment will make it change its tactics whenever the historical ones stop working towards achievement its goals. Various theories that have been developed in the past have greatly addressed the challenges of management. Decision-making processes affect both external and internal business environments. Effectiveness of businesses has increased since managers make decisions that are more informed and timely.

Furthermore, business structures have increasingly become dynamic. This situation has resulted in inevitable emergence of new challenges. Challenges that were solved by early management theories reemerge in different ways that cannot be addressed by the same theories. As a result, business researchers have to develop new theories to address new challenges that emerge within the business environment (Devadas, Silong, & Krauss 2011).

Relevance of Theories of Early Proponents of Management to Contemporary Challenges

In the wake of environmental change, business organizations have been forced to shift from the ancient management practices that focus on profit maximization. Instead, organizations have had to embrace management theories that focus on finding solutions to environmental challenges. These solutions include sustainable production processes that reduce of emissions of carbon dioxide to the atmosphere, which is solely blamed for global warming (Davies & Ibeh 2009).Moreover, organizations have opted to invest hugely renewable green energy projects whilst reducing the use of coal and petroleum as sources of production energy.

The theories of early proponents of management also find their significance in contemporary leadership in organizations. Usually, organizational leadership lies within the jurisdiction of managers and the board of directors. Leadership goals involve the accomplishment of both short-term and long-term strategic plans in an attempt to solve environmental challenges.

For instance, a survey carried out by Danciu (2009) reveals that most organizations have accepted that climate change is a reality that is biting hard on their profitability. The losses that have been incurred by these organizations have forced them to adjust strategies in an attempt to prepare for any impending adverse climatic changes such as typhoons and extreme winter. However, the author attests that many organizations, especially multinational corporations, are working determinedly to reverse the factors that have led to climate change.

Zdanyte and Neverauskas (2014) unveil that clients have profound interest in the changes that organizations make towards environmental challenges. This situation has encouraged the public to work together with environmentally sensitive organizations to assist in alleviation of environmental challenges. The authors posit that noncompliant organizations will face market sanctions in the near future due to exploitation of the business environment. Nowadays, people who live near the ocean shorelines dread losing their homes since global warming has significantly led to rising of the sea level.

This situation can lead to submergence of houses that are near the ocean shores. Waste disposal is another area organizations have to check to ensure that they retain and increase their client base. Most industrial wastes and effluents are hazardous to the health of flora and fauna. A research conducted by Brammer, Hoejmose, and Marchant (2012) revealed that pollutant companies will have comparatively lower number of clients than environmentally friendly companies that assist in management of the environment in the near future.


This essay has reviewed the various Henri Fayol’s management theories and their implications on modern businesses. Contemporary businesses have to institute proper management systems to accomplish and maintain competitiveness in the market. Generally, contemporary environmental issues have presented appalling challenges to businesses. As a result, it has become inevitable for businesses to institute new organizational structures and adopt alternative management theories that fit in an increasingly complex business environment. The future of environmental organization and the resultant environmental challenges to businesses is unknown since globalization and development of technology have become the narrative of the modern world.

Reference List

Brammer, S, Hoejmose, S & Marchant, K 2012, ‘Environmental Management in SMEs in the UK: Practices, Pressures and Perceived Benefits’, Business Strategy & the Environment, vol. 21, no. 7, pp. 423-34.

Danciu, V 2009, ‘The sustainable company: new challenges and strategies for more sustainability’, Theoretical and Applied Economics, vol. 20, no.9, pp. 7-26.

Davies, S & Ibeh, K 2009, Contemporary Challenges to International Business, Palgrave Macmillan, Basingstoke.

Devadas, U, Silong, A & Krauss, S 2011, ‘Human Resource Development and the Contemporary Challenges of the World’, Journal of Management Policy & Practice, vol.12, no. 5, pp. 128-41.

Parker, L & Ritson, P 2005, ‘Revisiting Fayol: Anticipating Contemporary Management’, British Journal of Management, vol. 16, no.1, pp.175-94.

Zdanyte, K & Neverauskas, B 2014, ‘Ensuring of sustainable development for contemporary organizations development’, Economics & Management vol. 19, no. 1, pp. 120-28.

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