EARLY AND CURRENT MANAGEMENT THEORISTS:
A COMPARATIVE FUNCTIONAL ANALYSIS
WILLIAM S. HART
A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
To Carol Ann
There are a great many people to whom I am indebted because of
the aid extended in one form or another to me while preparing for
and writing this dissertation. The people who have assisted to
prepare me for this study are too numerous to name, although some
have made large contributions. In addition, a number of others
have helped considerably with typing and other contributions to
the creation of this study; and their efforts are greatly appreciated.
A special thanks is extended to those professors who have given
their time and effort by serving on my supervisory committee: Dr.
Ralph H. BJodgett, Dr. John H. James, Dr. Charles W. Fristoe, and
Dr. Charles A. Matthews. I would like to express a special appre-
ciation and thanks to my chairman, Dr. William V. Wilmot, Jr., for
the time, effort, and encouragement he has generously given me.
William S. Hart
TABLE OF CONTENTS
ACKNOWLEDGMENTS ................... ....... ........... ......... iv
CHAPTER I. INTRODUCTION ............... .............. ...... 1
Thesis ...................................................... 1
Universal Nature of Managemient Principles ............... 2
Independent Development .............................. ... 3
Time Durability ........ ........................... ....... 4
Scope .... ........... .......... ........................... 5
Early Theorists and Writings Included ................... 6
Criteria for Selection of Early Writers ................. 8
Modern Theorists and Writings Included .................. 10
Criteria for Selection of Modern Writings ............... 12
Method .................. ...... ....... ...................... 12
Analytical Framework .................................... 12
Classification of Thoughts ................... ... ....... 14
Analysis by Areas ....................... ................ 14
Comparison With Modern Theory ........................... 15
Application of Analysis ................................. 15
Definition of Ieanagement ................................. 17
CHAPTER II. PLANNING ............................... ............... 19
Nature and Purpose ........................................... 19
Components of Planning ............... ... ........ ...... ... 20
Features of Planning .............................. ...... 27
Objectives ................... ............................. 31
Types of Objectives ............................. ......... 31
Selection of Objectives ................................. 35
Sunan ry .............. .............. ......... ............... 38
CHAPTER III. PLANNING (CONTINUED) ............................. 43
P anrn ing Premises .......................................... 43
External Premises ..................... ......... ......... 43
InLerna l Premises .......................... ......... .. 44
TABLE OF CONTENTS--Continued
Decision Making ............................................ 46
Alternatives ..... ... ..................................... 46
Evaluation .......................... ..................... 50
Policy Making ...................... ......................... 52
Formulation ........ ....................................... 52
Implementation .................. .................... ... . 53
Planning Action .............. ................ .............. 55
Participation . .......................................... 55
Coordination ............................................. 58
Communication ................ ............................. 59
Limits and Requirements of Planning ...................... 61
Summary ............. ................ ............. ........... 63
CHAPTER LV. ORGANIZING .......................................... . 68
Nature and Purpose .......................................... 68
Formal ....................... ....... ...................... 63
Informal .................................................. 75
Span of Management ............................................ 78
Extent ........ ...... ............................... ...... 7
Determining Factors ........................................ 80
Department ion .............. ................................ 81
Criteria ............................ ... ................... 81
Reasons .................................................... 34
Assignment of Activities .................................. ... 6
Combining Activities ....................................... 86
Guides .................................................... 87
Line and Staff Relationships ................................. 88
Nature of Staff Relationships ............................ 88
Functional Authority ....................................... 92
Limitations of Staff ............... ....................... 94
Su ary ....................... ............. .. ................ 97
CHAPTER V. ORGANIZING (CONTINUED) ............................... 103
Service Department .......................................... 103
Functions .................. .. ............................... 103
Authority ........... ................................... 104
Organizational Placement ....................... ... ...... 105
Decentralization of Authority ............................... 106
Determining Factors ........................ ............. 106
Con trols ........... ....................................... 111
TABLE OF CONTENTS--Continued
Committees ..................................................... ]13
Functions ............................................... 114
Advantages ......... .................................... 117
Disadvantages ............................................. 119
Facilitating Operations ..................................... 121
Problems ................................................... 121
Flexibility ............................................. 124
Internal Conflicts .......... .............................. 125
Summary .................... ................. ............... 127
CHAPTER VI. STAFFING ........................................... 132
The Managerial Job .......................................... 132
Qualifications of Managers .............................. 133
Source of Managerial Personnel ......................... 138
Motivation of Managers ................................... 139
Selection of Managers .................. .................... 140
Appraisal of Managers ..................................... 144
Management Inventory ..................................... 147
Development and Training of Managers ...................... 148
First-Line Managers ..................................... 149
Middle and Top Managers .................................. 153
Summary .................. .. .................. ................ 159
CHAPTER VII. DIRECTING ........................................ 165
Nature of Direction ........ ........... .................... 165
Manager-subordinate Relations ........................... 166
Issuing Orders .......................................... 171
Delegation .............................................. 175
Motivation .................. ............... .............. 177
Nature of Work ................ ........................... 177
Contents and Benefits of a Sound System ................. 182
Discipline and Morale ................................... 185
Suimnary .................... ............... ...... .......... 188
CHAPTER VIII. DIRECTING (CONTINUED) ............................ 194
Communications .............................................. 194
Efficiencies ............................................ 194
Barriers ................................................. 197
TABLE OF CONTENTS--Continued
Leadership ............... .................................. 199
Attitudes .......................................... .......... 199
Techniques ................................................. 204
Summary .......... ............. ........... .................... 210
CHAPTER IX. CONTROL ............................................. 214
The Process of Control ....................................... 214
Basic Control Process ..................................... 215
Requirements of Control Systems .......................... 219
Control Techniques ........................................... 222
Budget Control ............................................ 223
Non-budget Control ...................................... 225
Control of Over-All Performance ............................. 228
Control of Management Quality ............................... 232
Summary ..................... ................................ 234
CHAPTER X. THEORIES OF MANAGEMENT ................................ 239
Nature of Management ......................................... 239
Methods .................................... ................. 244
Objectives ................................................. 247
Responsibilities .................................... ........ 250
Functions ...................................................... 255
Summary ..................................................... 259
CHAPTER XI. CONCLUSIONS .............. .......................... 265
BIBLIOGRAPHY ................. ..................................... 272
BIOGRAPHICAL SKETCH ................. ........................... 278
CHAPTER I INTRODUCTION
In the past, management theorists have developed and held
divergent points of view about management, these varying with
regard to its nature, its methods, its practices, and its principles.
Because of these different views, there has developed a variety of
schools of thought pertaining to management and its nature. Each of
these schools views management as being something different from that
which is seen by the others and each typically has its own approach
to the study and explanations of management behavior.
Some of the more common schools of thought that have developed
over the years are the operational (or management process), the human
behaviorist, the empirical, the decision theory, and the social
systems schools.1 Each of these schools has succeeded in making
important discoveries in management and has in turn made its own sig-
nificant contributions to the various fields of management theory.
While each has achieved some degree of popularity and general support,
the operational school has perhaps been the most successful in gaining
adherents. This is probably due to the systematic approach its pro-
ponents take to the analysis of management and to the discovery of
principles. The operationalist views management as a process which is
analytically separate and distinct from the other activities that are
conducted within an organization, either business or other.
Universal Nature of Management Principles
While the management process is a unique process, it is divisible
into identifiable functions, all of which must be performed to
complete the services and fulfill the responsibilities of management.
These functions are typically identified as planning, organizing,
staffing, directing, and controlling. While there is no universal
agreement on this list of functions, this classification is represen-
tative of those that have developed and is in itself rather widely
accepted with only minor deviations. Although the functions do not
have to be performed by the same person or at the same time, the
successful management of any single undertaking necessitates
performance in all of these functional areas--and usually in the
sequence in which they are presented. This functional cataloguing of
management activity very greatly facilitates the classification and
analysis of management data in the development of hypotheses and also
in the substantiation of hypotheses for the development of principles.
While management is generally conceived by all management schools
to have as its purpose the coordination of activity of other people
in their combining of factors of production so as to achieve objectives
efficiently, the operational school feels the process of management is
necessary in all group endeavors. The management functions, in other
words, are common to all managerial tasks. The same fundamental
process should be pursued in any set of circumstances and at any level
of the organization. This point of view toward the management process
and its functions (and the principles that guide the performance of
these functions), which holds them as being applicable in any endeavor
regardless of circumstance or size of organization, has been labeled
the universalist theory. It is this universal label, or concept, that
is of interest in this study. What needs to be determined is whether
this theory is justified by the existence of principles of general
applicability which are recognized and utilized in just such a
universal fashion. It is accepted that every manager does not have to
perform every function of the process in every endeavor, but it is
generally held that every job requires that all the functions be
performed by someone at some time and that managers may perform a
limited number of functions because of specialization.
If the assumption of universality of management principles is
true, it seems logical to assume the possibility of independent
development or discovery of these principles and the systems that they
constitute. This independent development should exist with respect to
the environment in which the principles are developed and to the time
and circumstances of discovery. If principles can be applied to any
managerial situation or set of organizational circumstances, then it
would seem that there is a possibility they could be discovered in
any environment. The business or industry being analyzed by an
interested observer would then appear to be of little or no consequence.
In similar fashion, neither would the context of the economy be a
particularly significant factor. Certainly it would be expected that
some social, political, and possibly economic factors would have some
bearing on the techniques and methods used in studying management,
but these should have little effect on the ultimate findings; that is,
the relationship among variables, as described generally by principles,
should still be about the same.
It would also seem logical, if this universality of management has
any factual basis, that these principles could be developed independent
of time and place. The management process could be encountered any-
where, at any time, and be observed in its existing context and studied
as if is being practiced. The concern for coordination and achievement
of efficiency in production and operations could lead potentially
anyone, in any country, and in almost any time period, to become
involved in the study of management and management processes. This
study could be expected ultimately to result in the discovery of a
common body of principles of management.
Having discovered principles, it would be logical to assume that
their universal nature would make them durable in a time sense; that
is, they should have some ability to survive through a period of time
and continue to be meaningful to managers in their practice. It would
be natural to expect elaboration and further development of these
principles as additional people work with them and study them further,
but the principles developed by early theorists should continue to
exist and it should be expected that they would be incorporated in
The purpose of this study is to determine the extent to which
these premises about the universality of management principles are
true; that is, to determine the extent to which selected early
theorists developed common principles and the extent to which these
principles currently exist in modern management systems. It is also
hoped that differences may be observed and that perhaps some reason
for the existence of these differences may be discovered. Through
this study it is hoped that better identification may be made of those
management principles which can be reasonably classified as universal
As is often the case, physical limitations require that the scope
of the study be restricted to the ideas revealed in certain selected
works. It is certainly not practical to try to include the thinking
of all early theorists who were concerned with the development of
principles. The history of management is long and so is its study.
A very large number of people have been concerned with studying
different aspects of management practice, especially since the turn
of the century. Most of the earlier studies have been limited in
scope to certain restricted aspects of management--such as functions,
or areas of operation--and have not attempted to be all-inclusive
analyses of the process itself.
The concept of management as a system of related principles is a
rather recent one. The turn of the present century seems to mark the
beginning of major interests in the idea of management as a system
and of the study of principles within this framework. At this time,
several writers started depicting management as a system in which the
principles are integrated to form an entire process. The writers
selected for inclusion in the present study are representative of this
group and, as such, are not intended to be completely original in
either their thinking or their contributions. Each of these writers,
while making important original contributions to thinking in the area
of management, relied in part on the contributions made by earlier
theorists. Some of their thinking was devoted to adjusting or
reconciling, or incorporating the thought of earlier writers, and
many of the earlier theorists' ideas were quite complimentary to the
thinking of the authors studied here. Nonetheless, some of this
thinking, while not in itself original, has been given additional
meaning by being examined in a new context.
Early Theorists and Writings Included
Although the works selected for study are not the only ones the
authors produced, they are their major contributions to theory and
are representative of their other writings. These selected works
afford a compilation of the thinking by these authors because they
describe and relate to the systems which they envisioned.
Three early theorists have been selected for inclusion in this
study. They are not random selections but rather were chosen for
reasons to be discussed shortly. Also selected for inclusion are three
modern theory books which are thought to be representative of the
generally accepted modern theory with which the early thoughts may be
compared. These books, too, are representative of what is available
at present concerning books published, authors represented, and ideas
Of the early theorists to be included in this study, one is
Henry Fayol, a Frenchman born in 181l. He was educated as a mining
engineer and, at age 19, went to work for the Commentry-Fourchambault
Company. Fayol remained with this company throughout his career. He
retired as managing director in 1918 but remained on the Board of
Directors until his death in 1925. He served this company in many
executive capacities during his career and accumulated a very sizable
store of personal experience and knowledge about management. He
published his most famous work, General and Industrial Management, in
1916. The first Erglish translation did not appear until 1929, and
then only a few hundred copies were distributed in Great Britain.
Very few, if any, of bhese copies made their way to the United States.
No edition appeared in the United States until 19l9 when the present
Constance Storrs' translation was published; it is this edition that
is included in this study.2
The second of the early theorists studied is Oliver Sheldon,
who was an industrial consultant to firms in England where he did the
bulk of his work. The major part of his thinking on management is
contained in his Philosophy of Management, which was published in
192L.3 Sheldon was another of the practical writers with a great deal
of business experience as a background. As the title of the book
suggests, Sheldon was concerned with more than just management
principles. He was concerned with bhe social responsibilities and
functions of management as well as the economic aspect of management
and business in general. He held the opinion that the productivity
of workers had advanced mechanically to a point where it far exceeded
the efficiency of organization and that management was of great
importance to human welfare because it offered an area--what he
considered the most likely area--in which additional productivity
gains could be realized, thus raising the standard of living. Because
of his orientation toward organization, it is not difficult to see how
Sheldon viewed management as a system of principles which should be
developed, disseminated, and used to this end of increasing produc-
tivity and iuman welfare.
The third early theorist is Mary Parker Follett, an American who
was born in Boston in 1868. Her contribution to management theory
appears in Dynamic Administration which is a collection of her papers
that were written over a considerable number of years and which were
published as a book in 19b0.h Miss Follett was not a practicing
business manager, as were the other two writers, but she served as an
advisor and consultant to many businessmen. She had a very keen
interest in organization, both governmental and business, and in her
study had the opportunity to examine closely a large number of
businesses and to associate with many practicing managers. Her books
on organization were for the most part devoted to governmental
organization. Her interests in government preceded her interest in
business; but, with the realization that the principles of organization
and management are universal, she began studying businesses and
writing about them as well. Her published works consist, as far as
business is concerned, of a rather extended list of independent papers
and lectures. These publications covered a time span from about 1925
to 1933; however, some of the material included in Dynamic Adminis-
tration was new since it had not been published previously.
Criteria for Selection of Early Writers
The selection of the works representing early theorists included
in this study has been based on four separate factors. One factor is
that they were all produced in different environments. While the
economic and cultural environments were in many ways similar, they
were nevertheless as significantly dissimilar as the backgrounds of
any management theorists whose works are available from earlier periods.
We find very little available from countries of more diverse nature
than that which exists among the Western countries. Because of this
factor of environment, each of the writers had a different situation
to examine, and, to the extent that this would have a bearing on the
principles that they did develop, these differences should appear in
these works. This difference in background and environment is
desirable for the study of the hypothesis that principles of manage-
ment are universal. If the principles are universal, then it stands
to reason that they could be discovered in different environments,
and the selection of these three theorists should contribute represen-
tative thought from different environments.
A second reason for their selection is that all three did their
writing in roughly the same time period and their writings were made
public during a fairly narrow time span. During this period, all
were among the first in their respective countries to conceive of
management in practice as a process of functions. All three were
influential in affecting the thinking of many of their contemporaries
and later management theorists. The production of their works in the
same time period also reduces the likelihood of their being influenced
significantly by each other.
This brings to light a third reason for the selections: that
neither seems to be very much influenced by the others or to know much,
if anything, about the thinking of the others. Minn Follett dona,
however, quote from Sheldon on occasion, but only to refute some point
of concern to her. They may have had some common contacts, but they
seem to work essentially independently of one another. To this extent
the thinking of each was free of the influence that might have been
exerted by the ideas the others were advocating. This being free of
mutual influence is also a logically desirable ingredient in the
independent development of their principles. Each of the theorists
may have been influenced to some extent by the writings of the same
theorists from a still earlier period, but there is no way of
ascertaining either the existence or extent of this mutual influence.
A fourth characteristic which makes them of interest is the
condition referred to previously--each saw management as specifically
a.system and worked to develop principles within this framework. They
were concerned with nearly all aspects of management and made obser-
vations on most of them. The fact that they saw management as a
process facilitated their studies of management and this makes it
easier for others to examine their thinking and to make meaningful
comparisons among them.
Modern Theorists and Writings Included
The modern theorists that have been selected for inclusion in
this study are represented in books that are primarily college text-
books for the teaching of management principles, which bring together
very nicely the scope of the thinking of each author.
The first book to be included among the current theorists is
Principles of Management, by Harold Koontz and Cyril O'Donnell.5
The third edition is the one referred to in this study and is, in
fact, the source of the outline of the study which provides the
specific points of comparison used as the base of analysis of manage-
ment thought. Both authors of this book are Professors in the Graduate
School of Business Administration of the University of California,
Los Angeles, and enjoy national reputations as experts in the field
of management and education. Each of them has had comparable back-
grounds that include, in addition to education in a number of univer-
sities, experience in managerial positions in business firms and with
governmental agencies. They have written extensively, both books and
articles for periodicals, and have served as management consultants
to many of the nation's largest business organizations. These two
men are acknowledged as being outstanding management theorists and
recognized proponents of the operational school of management theory.
The second book included from among current theorists is
Management: Theory and Practice by Ernest Dale.6 Dale is a faculty
member of the Graduate School of Business, University of Virginia,
and is president of Ernest Dale Associates, a management consulting
firm. He too enjoys a national reputation as an educator and manage-
ment theorist. He has successfully for a number of years been
employed as a consultant by a large number of nationally known corpo-
rations as well as by agencies of the government. Dale is a prolific
writer who has produced a large number of books and articles for
professional periodicals. He is recognized as one of the foremost
advocates of the empirical school of management theory, a school
which supports the teaching of principles by comparative case analysis,
but which is still founded in principles and management functions.
The final work is The Process of Management, by William Newman,
Charles Summer, and Kirby Warren.7 This book is one of principles
and is therefore a treatment of the entire field of management and
its principles. William H. Newman is a Samuel Bronfman Professor
of Democratic Business Enterprise at the Graduate School of Business,
Columbia University, and is the author of a number of books in the
field of management as well as numerous professional articles for the
journals. Charles E. Summer is Professor of Management at the
Graduate School of Business, Columbia University, and is equally well
known for the works he has authored and co-authored in the field of
management. E. Kirby Warren is Associate Professor of Management,
also of the Graduate School of Business, Columbia University. Each
has had considerable experience as a consultant to business.
Criteria for Selection of Modern Writings
One of the reasons for the selection of these books is that they
are representative of what is at the present time widely accepted
thought on management principles. Each is used in a great many college
classes as an introductory text for students of management process.8
In this respect, these books probably represent the best and most
complete collection available of management principles, since they
are generally accepted by modern writers and management theorists.
Another reason for the selection of these books is that the
authors are well known in both the academic world and the business
world as knowledgeable and competent in this field of study. While
their ideas are not fully accepted by all managers, the authors are
nonetheless respected as scholars and, in most cases, experienced
practitioners; and the bulk of their principles would be disputed
by only a relatively small portion of other management theorists. In
contrast to the early theorists, they do know one another and have
a good deal of access to another's thoughts.
In order to provide an orderly framework for handling the data
with which this study is concerned, it has been necessary to group
management principles and ideas pertinent to areas of interest
according to common functions and activities. In doing this, it
becomes feasible to categorize the ideas of a number of different
writers in relation to the areas of management with which they deal,
thus bringing these ideas into better focus so that they may be
contrasted more effectively.
The construction of an analytical framework is accomplished by
dividing management into the major areas of interest and study which
are its constituent parts. The division itself has been performed
primarily on a functional basis; that is, the division corresponds
to the various functional activities which are normally associated
with the management process itself. The primary division includes
planning, organizing, staffing, directing, and controlling. While
there is not complete agreement on this classification among students
of management, or for that matter on the terminology used in it, it
can be with some degree of flexibility of concepts a sufficient
division embracing all of the types of managerial activities.
The secondary divisions within these areas are developed on the
basis of the nature of the material that is typically found within
each group. The nature of this division is mostly concerned with the
how, when, where, and why of the performance of the activities within
each of these groups. This type of outline provides a mechanical
division in which specific points of comparison can be developed.
These points of comparison can be used as a basis for relating the
thinking of each individual author examined.
Classification of Thoughts
Given this analytical framework for sorting and classifying,
these selected writings may be examined and, at the same time,
classified according to the thought that is revealed in each. The
thinking of each author may then be extracted from his writings
pertinent to each point of comparison within each area of study.
The classification of the areas of specific study will follow
logically from the same organizational pattern developed for the
separation of management principles into fields of interest. Having
sorted the thoughts and observations of the various writers into the
related areas with which they deal, it will then be possible to
analyse and evaluate them on a comparative basis according to the
individual areas into which the materials have been divided. For
the most part the analysis can proceed from the points of comparison
used for collating the ideas of the separate authors.
Analysis by Areas
After following the analysis and classification of authors' ideas,
the next step is to compare the individuals' thinking in each of the
separate areas. In making such a comparison, it should be possible
to identify within each area the ideas that were held in common by
two or more of the authors relative to that particular point. The
range of thinking by these people on any particular point should also
be readily apparent by such a procedure.
A corollary to the identification of common ideas is that of
identifying areas of thought and points of concentration where the
authors differ in opinion. For many purposes of analysis this could
potentially be as revealing as the identification of common ideas.
In such efforts as trying to determine relationships, the lack of
association is often as significant as the presence of association.
Identification of the fact that various authors expressed no thoughts
on certain points may also be helpful. This ordering of ideas helps
to indicate the completeness of the theoretical work of each and may
point out ideas that were held individually. By summarization of
data according to functional areas of management, the entire analysis
and comparison can be carried out independently and fully within each
of these separate areas.
Comparison With Modern Theory
After evaluating the early theorists according to the functional
areas of management, the next step is to compare their ideas to the
thinking of the present-day theorists. In making this comparison,
both the points of similarity and the points of dissimilarity will be
identified. A more complete picture can thus be obtained of the
scope of management principles as conceived by the theorists, and the
relative significance to theory of each managerial function and area
of comparison should become more apparent in this stage of the
analysis. The analysis should provide a reasonably clear picture of
the extent to which the specific management principles have been
carried into modern theory. This in turn should also indicate the
problem areas of early theorists that have since been consolidated,
modified, or discarded because of lack of contemporary relevance.
Application of Analysis
Having compared the early and modern theorists with one another
and having identified their differences and similarities, it should
be possible to explain some of the differences. In doing this, it
should be understood that complete fully acceptable explanations
should not be expected for all of the differences that are found to
exist. There will undoubtedly be many that will have to wait for
future explanation. For present purposes, the identification of
these differences is enough. The usefulness of this study lies in
its serving as a foundation for explanations of deviations in
A final objective, or justification, for this study is that it
should serve as a base for the development of an eclectic, generally
accepted theory of management. By revealing those principles and
thoughts of theorists, both early and modern, which are held in
common, it should become evident which areas and topics of study
would need consistently to be included in such a theory, as well as
some specific aspects of each. This comparative analysis should
offer an opportunity to obtain a great many clues pointing to the
content, structure, and general makeup of an acceptable theory of
In addition to explaining the differences in existing theories
of management, it is believed that the comparative analysis will make
it possible to examine the completeness of each of these theories.
This should serve to point up the strengths and weaknesses of each
theory and, in so doing, give a better indication of the contributions
of each. Knowing the omissions and weaknesses of each theory would
aid in establishing the efficient direction of effort toward further
work and development of principles in the field of management.
Definition of Management
Since the concern of this study is with the principles that
make up a number of theories of management, it is necessary to have
a clear understanding of the meaning and scope of the term manage-
ment. Management is thought of as both formal and informal, and
definitions range from the very short to the rather complex. An
example of a shorter definition is that in which management is
considered to be "Getting things done through other people."9
Various definitions indicate that management serves as a
rather precise purpose--one that could be described as the attain-
ment of efficient coordination for a group. The immediate objectives
are widely variable, as are the methods used to attain them, and can
include almost anything. But the purpose served by management is
quite definite and quite essential.
To reduce all of this to a more workable definition and
practical concept, the following definition from a contemporary book,
and the definition that will be used here, is that management is the
"accomplishment of desired objectives by establishing an environment
favorable to performance by people operating in organized groups."10
As a practical matter, this definition concerns management with
anything--either tangible or intangible--that has a bearing on the
attainment of group objectives, particularly the elements that affect
efficient attainment of objectives.
1Harold Koontz and Cyril O'Donnell, Principles of Management: An
Analysis of Managerial Functions (3rd ed.; New York: McGraw-Hill Book
Company, 1964), pp. 26-33. There is a good discussion of the features
of the various schools of management presented in the second chapter
of this book.
2Henri Fayol, General and Industrial Management, trans. by
Constance Storrs (London: Sir Isaac Pitman and Sons, Ltd., 1949).
30liver Sheldon, The Philosophy of Management (New York: Pitman
Publishing Corp., 1965).
4H. C. Metcalf and L. Urwick, eds., Dynamic Administration: The
Collected Papers of Mary Parker Follett (New York: Harper and Brothers
5Koontz and O'Donnell, op. cit.
6Ernest Dale, Management: Theory and Practice (New York: McGraw-
Hill Book Co., 1965).
7William H. Newman, Charles E. Summer, and E. Kirby Warren, The
Process of Management (2nd ed.; Englewood Cliffs, New Jersey: Prentice-
Hall, Inc., 1967).
Correspondence with Prentice-Hall reveals that Newman, Summer,
and Warren's Process of Management, 2nd ed., has between 25% and 30%
of the total market for basic college texts. They also estimate that
Koontz and O'Donnell have 20% of the market with their book. Dale's
market share has not been determined.
9Dale, op. cit., p. 4.
10Koontz and O'Donnell, op. cit., p. 1.
CHAPTER II PLANNING
The first managerial function to be examined is planning. It is
logical to start with planning since the efficient execution of the
other functions depends upon varying degrees of preliminary planning.
It is often thought of as more pervasive than the other functions and
as such is requisite in one form or another to them. "Not only is
planning a basic function for all managers in all levels of the enter-
prise but the four other functions of the manager depend on it."
Thus planning may be thought of as the starting place for management
There are a variety of different aspects of the planning function
to which some attention will be devoted. The general areas of planning
to be examined are the nature and purposes, the objectives sought, the
premises employed, the decision-making process used, and policy making.
Also included are the associated activities of participation, coordina-
tion, communication, and the general limitations and requirements that
are normally associated with the process of planning. Each of these is
a separate area of activity and each will be examined individually.
Nature and Purpose
The first phase of the planning function to be discussed is that
of its nature and purpose. This phase is concerned with the character-
istics of the planning function and its various components, and an
analysis of how these fit together. Some theorists have studied the
planning function proper and have commented on its ingredients, its
nature, its relationship to efficiency, and the order they take in the
planning function itself. Other theorists have been less analytical,
ignoring the process and its elements entirely and acknowledging only
its desirability and its essential nature. Their interest corresponds
to their view of the importance and the placement of the planning
function in the management process itself. Contemporary theorists are
much more thorough in their discussion of planning than were the early
theorists. This is understandable since it reflects the realization of
its gradually increasing importance to enterprises and the tendency for
production process to become much more complex. Organizations, too,
have become more complicated and increasingly more difficult to coordi-
nate and have forced managers to rely more heavily on planning prior
to the undertaking of tasks.
Components of Planning
The expression "components of planning" means the different phases
of the planning function and does not imply that they are either dis-
tinct or necessarily sequential in their order. Most of the theorists
selected for this study recognize three essential components of the
planning process: the selection of the objective to be attained, the
development of a course of action which will result in its achievement,
and the development of derivative plans which consist of the stages of
action that are necessary to success and the methods or procedures to
be employed. The various authors subdivide these components in differ-
ent ways and, as a result of individual emphasis, advocate their own
step-by-step processes for planning. These processes vary in the
number of steps they contain and in the procedures followed for the
execution of each on the basic components.
In viewing the authors' attitudes about the planning process, there
are a number of differences that become apparent. Of the early theo-
rists, Miss Follett had the least to say about the planning process.
She acknowledged its importance to organization, but did not attempt to
analyze it. Fayol and Sheldon considered it important and looked at it
closely. Fayol thought it included every phase of business activity
and, as a process, consisted of a series of continual reports and fore-
casts. Sheldon was more explicit in his thinking about the planning
process, but tended to view it primarily in relation to production
processes. Of the modern writers, Dale gives the process the least
attention, viewing it as basically a budgeting and scheduling process
complemented by related activities. The others see the process as con-
sisting of numerous steps which can be followed systematically.
Newman, Summer and Warren give the most complete examination of the
process, but place their greatest emphasis on the decision-making pro-
cess which is, in their opinion, the foundation of the planning function.
Planning is manifested in many different ways in business, but in
Fayol's thinking the most effective instrument of planning is what he
called a "plan of action." "The plan of action is at one and the same
time the result envisaged, the line of action to be followed, stages to
go through, and methods to use." Before undertaking a plan of action,
it is necessary to know two things: What is possible, and what is
wanted? Another feature of planning seen by Fayol is that, in the
final analysis, it is experience that is the real determinant of the
value of any plan. The value depends on the degree to which it is
effective in advancing the organization toward its preselected
Sheldon, having more of a manufacturing orientation to management,
thought of planning as the "function concerned in planning the progress
of work from a receipt of the customers' orders through the various
processes of manufacture until ready for delivery." To him, the plan-
ning function establishes the production system in which administration
has the responsibility for operations. He believed it necessary to
divide analysis of the process into two parts: (1) What is to be made?
(2) How is it to be made?
Miss Follett's view of planning deals with organization and the
achievement of economic efficiency through better communications and
human relations. She thought that these would improve the coordination
of activities and enable people to perform individually at a more pro-
ductive level. Because of this basic orientation, she devoted her
attention to other areas of management problems and did not attempt to
develop the components of planning.
The modern theorists are, as would be expected, much more concerned
with the planning process as such. They consider the planning process
to be a more distinct activity, one to be considered in more detail
insofar as its components are concerned. Their works reflect the re-
finement and development of the planning process that has occurred
during the time that has intervened since the writings of the early
Koontz and O'Donnell describe their view of the purpose of plan-
ning when they write ". . Planning is deciding in advance what to do,
how to do it, when to do it, and who is to do it. Planning bridges the
gap from where we are to where we want to go." This makes it possible
to achieve objectives through the control of events. It is a conscious
determination of a course of action. They believe that the planning
function can be performed in a series of easily distinguishable steps.
These include, (1) being aware of opportunities; (2) establishing objec-
tives; (3) premising; (4) determining alternate courses; (5) evaluating
alternative courses; (6) selecting a course; and (7) formulating de-
Dale's idea of the nature of planning is summarized: "A plan is
essentially today's design for tomorrow's action, an outline of the
steps to be taken during some future period; and since tomorrow's
possibilities depend on the circumstances prevailing, then planning is
inextricably bound up with forecasting." This amounts to forecasting
the future as well as possible and then planning a course of action
subject to the expected conditions. Dale's concept of the contents of
the planning process is that it consists largely of budgeting and
scheduling. "One feature of a corporation's plan is likely to be a
series of budgets to translate company intentions into a series of
assessments and provide the money to carry them out." The plan is also
likely to include a number of schedules that specify production, start-
ing and completing dates, market testing, marketing, sales, etc. He
In scheduling any step in an overall program or job, there are
three considerations: (1) What must be done before this
particular phase can be started? (2) What can be done con-
currently? (3) What follows in sequence; or now that we have
reached this phase, what can we do to further the project.9
Newman, Summer and Warren hold the opinion that planning is a key
activity for all managers. The manager hopes through planning to
". .. clarify objectives and set goals for each subdivision; to
establish policies and standard methods to guide those who do the work;
and to develop programs, strategies, and schedules to keep the work
moving toward the objectives." To them, a large part of planning is
made up of decision making, the steps of which are made up of the
following: diagnosing problems, finding alternative solutions, pro-
jecting results of alternatives, and selecting one course of action
from among them. In an organization, this process is not done by an
individual but occurs through the cooperation of many people. The
scale of operation may be the only significant distinction between
planning and decision making. "The process of planning covers a wide
range of activities, all the way from initially sensing that something
needs doing to deciding firmly who does what, when, and how." To
them, the elements of the planning process are roughly the same as the
steps followed in decision making.
Another component of the planning process that is discussed by
some of the theorists is that it exercises control over events as they
are to occur in the future. Sheldon, Follett, and Koontz and O'Donnell
have this view in common and think it should be accomplished through
the application of scientific methods. The scientific treatment of
control of events enables planning to be used as an effective tool by
managers for achievement of objectives.
According to Sheldon, planning is scientific: "The main reason for
planning is . the necessity for the scientific treatment of control.
Planning is the business of assuring systematic, complete, and detailed
control of production."12 This makes it necessary to divide planning
into three parts: (1) Accumulation of data to show how the work is
being carried out; (2) Elaboration of a plan to cover the whole process
from the receipt of customers' orders to the shipment of finished goods;
(3) Establishment of administrative machinery to notify the planning
department of adherence to or divergence from the plan of action.
Miss Follett emphasized the scientific approach as the best way to
accomplish the improvement of communications and human relations neces-
sary to the achievement of economic efficiency. Her idea of the scien-
tific method consists of two parts: (1) research and (2) the organiza-
tion of the knowledge obtained through research.3 She was quite
concerned with applying scientific methods to the analysis of executive
experience. By classification and interpretation of experience, it
would be possible to draw many useful conclusions about events that
are either related or repetitious.
The control of events is an important aspect of planning for
Koontz and O'Donnell. They think that the reliance upon a spontaneous
occurrence of events is quite ineffective in achieving designated
organizational objectives, and that it is necessary to have a
consciously determined course of action for either efficiency or
effectiveness of activities.
In addition to these components of planning that have been dis-
cussed, a number of the theorists stressed other points in regard to
the planning function. Fayol, for example, thought that planning
consisted largely of reports and forecasts coordinated to provide con-
tinuity and that it included: (1) Drawing up an annual, general report
of the work done and results achieved. This report should be accompa-
nied by forecasts dealing with the same subjects and should be an
anticipatory summary of activities and results for the new period.
Account must be taken of cooperative projects and proximate activities.
Constant modification of the plan is necessary to avoid its being
overtaken by future circumstances. (2) Ten-year forecasts are made and
are revised every five years. (3) Special forecasts are then prepared
for activities expected to exceed ten years and for those that occur
suddenly and are not provided for by the regular plan.
Much of Sheldon's discussion of planning was centered on the
activities related to the receipt, processing, and delivery of orders.
His attention was thus devoted to such topics as control of material
flow, recording waiting orders, and the beginning time and delivery
dates of the orders. To Koonts and O'Donnell, however, it was the
manager's awareness of opportunities; premises; and the determination
and evaluation of alternatives that warranted additional attention, and
Dale thought it important that a manager give consideration in planning
to what could or should be undertaken concurrently with the plans being
developed and what can be done for a follow-up to it.
Newman, Summer and Warren saw planning being done in an organiza-
tion by a number of people and believe they can help planning through
the performance of the following: (1) classifying the objectives;
(2) drawing attention to the need for action--that is, pointing out
opportunities for improvement; (3) suggesting possible alternatives;
(o) gathering and analyzing facts relative to the problem; (5) helping
to forecast the results of different alternatives; (6) absorbing uncer-
tainties; (7) counseling about the relative value of the results that
are forecast.1 It is points number six and seven of this group of
activities that are distinct when compared to the ideas of the other
theorists studied. The uncertainties are not eliminated but they are
considered by someone other than the decision maker, apart from the
major decision involved in the problem. It would certainly be expected
that someone, probably the decision maker, would be concerned with the
relative value of the results that are forecast for the alternatives
being considered. Both of these features of planning would seem to be
present in group planning whether intended or not. It is surprising
that none but Newman, Summer and Warren pointed them out.
Features in Planning
The features of planning presented here include those character-
istics that are essential parts of the function and which are general
in nature and tend to be pervasive throughout the planning function.
There are a considerable number of features of planning that are deemed
desirable by the theorists included in this study. The three most
popular of these seem to be flexibility, continuity, and unity followed
by efficiency and standardization. The theorists all agreed that plan-
ning must be flexible, coordinated, and consistent in order to be effec-
tive. The only theorist who could be considered an exception would be
Miss Follett, who devoted little attention to the features of planning.
She saw it as an organizational activity involving many people and many
types of information, all of which were to aid the manager in making
the decision demanded by the situation. This is evidenced by her
statement: "By the time this has all been passed to the head, his
decision is already largely predetermined." This reflects her think-
ing that planning is closely related to decision making and is a group
activity that must be provided for in the organization structure, but
she does not specify any of the details on how it is to be accomplished.
"Unity, continuity, flexibility, precision: Such are the broad
features of a good plan of action."17 This is the way Fayol viewed
the characteristics of the planning function. A broad interpretation
of the terms he used would make it possible to include nearly everything
discussed in this area by the other theorists.
Looking first at the subject of flexibility, Fayol wrote:
The plan should be flexible enough to bend before such adjust-
ments, as it is considered well to introduce, whether from
pressure of circumstances or from any other reason. First as
last, it is the law to which one bows.18
Although Sheldon considers standardization as the most important feature
of planning, he does not think it is inconsistent with some degree of
flexibility which is needed and obtainable through participation and
discretion of the lower levels of the organization. "This still leaves
to a department, however, the responsibility for carrying out its
internal planning according to its central system."19 While this would
allow for a certain amount of flexibility, it would not seem to place a
very high priority on it nor, for that matter, allow very much of it.
For Koontz and O'Donnell, the outstanding feature of the planning
function is that of flexibility. "Because of future uncertainties and
possible error in even the most expert forecast, the ideal of planning
is to be able to change direction when indicated by unexpected events,
without undue cost." Flexibility should not only be an objective of
planning, but also a major consideration in the planning process itself.
The planning process should be designed to incorporate flexibility,
realizing that flexibility is possible only within certain limits. Not
only should flexibility be built into the plans, but it must exist in
the planning process itself. The focus of this flexibility is in the
management personnel, in their thinking and conduct rather than in the
Dale also emphasized flexibility as a feature of planning: "It
could be argued that the planning function encompasses innovation since
the manager should plan not only how to adjust his organization to
future conditions but how to change these conditions in order to improve
the possibilities open to him. 21 Newman, Summer and Warren, in regard
to flexibility, believe that "most of these plans will have to readjust
periodically in the light of new information and changes in operating
Unity and continuity are the two other planning features that were
pointed out by Fayol and supported by the other theorists. In seeking
unity in a plan, Fayol thought it necessary to have one plan at a time,
since two different plans would mean confusion and disorder. A series
of plans, by departments or by time, can be linked together to provide
a single, integrated plan applicable to the overall situation. Con-
tinuity was thought necessary to assure continued progress toward the
organizational objectives. The last feature of planning given by Fayol
was that of precision which seemingly was not as popular with the other
theorists as were the first three objectives. Added to the features of
unity and continuity, precision constitutes approximately the same
characteristics as Sheldon's concept of standardization. Faycl saw that
precision of plans provides for greater accuracy, which is desirable
in a plan of action.
To Sheldon, the planning function had one major characteristic
above all others, and that was standardization.
Efficient planning of work depends upon analysis of the work,
and the standardization which such analysis renders possible.
Before control of what is done, how it is to be done, and
when it is to be done can be established, there must exist
some comprehensive knowledge of the detailed features of the
Standardization is emphasized because of its relation to control; the
greater the degree of standardization, the greater the degree of control
possible. This is due to the fact that standardization creates consis-
tency, and consistency in turn allows for predictability and accuracy.
These features would seem to coincide with Fayol's.
Koontz and O'Donnell give the nature of planning a number of dis-
tinct characteristics that also appear to correspond closely with
Fayol's analysis. The first of these is that every plan must con-
tribute in a positive way to the achievement of group objectives. Next,
planning is a primary requisite to all managerial functions; planning
sets the objectives toward which all functions are working. The third
characteristics of planning, according to Koontz and O'Donnell, is that
it is pervasive among all managerial jobs. Fourth, a plan should be
efficient; that is, the objective should be achieved in such a way that
the gains realized are greater than the costs incurred.
Dale apparently thinks that unity is a necessary feature of plan-
ning. He maintained that while it is best to have planning start at
the departmental level of an organization, all planning must be
coordinated by top management, even if a planning group is used to aid
in the process. In association with unity and continuity, Newman,
Summer and Warren include a number of other features:
It provides for consistency of action, which is necessary in
order for people both inside and outside the company to
anticipate company performance; it provides for integration
and coordination of company activities; and it permits con-
siderable economy of managerial effort.25
This latter feature of economy is also pointed out by Koontz and
O'Donnell who stress that it is one of the major reasons for using plan-
ning. Innovation is still another feature which Dale stresses. It is
also considered a major ingredient of planning by Miss Follett, who
thought innovation an important element of the process of integration.
It would seem to be a characteristic that would go a long way in helping
managers in their efforts to develop alternative courses of action.
Koontz and O'Donnell pointed out the pervasiveness of planning, a fea-
ture that was not mentioned by the other theorists. Pervasiveness is,
however, more a factor supporting the need for planning than a
characteristic of it.
Planning, to be meaningful to an organization, must lead to an
objective. Activity must lead somewhere. In this section, the opinions
of the selected theorists concerning objectives of business organization
will be brought together. Both the types of objectives and the ways in
which objectives are selected will be examined.
Types of Objectives
Since planning is undertaken with the idea that it will facilitate '
the attainment of the firm's objectives, it would seem that the firm's
objectives and the objectives of planning are one and the same. The
theorists themselves appeared to make very little distinction between
the two. Some theorists, such as Fayol, concentrated their attention
on planning objectives while others discussed only the firm's objectives.
There is a rather wide variety of objectives firms should pursue accord-
ing to these authors, but there are a number of objectives they agree
upon as being especially important. Among this list of objectives are
efficiency of operations, profit, efficient use of resources for
satisfaction of human needs, service to the community, and improving
personnel and working conditions.
For most of the theorists, profit was viewed as a measure of the
efficiency and the degree of success to which satisfactory production
is achieved in meeting a need of some group of people. All, however,
agreed it must be combined with the pursuit of a variety of social
objectives. A clear majority thought that, in the long run, a seeking
of social objectives would contribute to the profit-making capacity of
Fayol has little to say about the nature of business objectives
but assumes that each firm will have, or is given, a specific economic
objective to pursue. He generalized about organizations and thus
never confronted the question of what objectives should be for a firm;
he accepted at the outset that they could be almost anything. The
specific objectives of the planning process include a number of
.the plan of action facilitates the utilization of the
firm's resources and the choice of best methods to use for
attaining the objective. It suppresses or reduces hesitancy,
false steps, unwargrnted changes of course, and helps to
Sheldon believed industry has a responsibility shaped by the fact
that it consists of human as well as material elements and that "in its
relation to the community, management is representative of industry as
a whole."27 The nature of industry is such that it exists for the
satisfaction of human needs, but this is subject to some limitations.
"The object of industry is not, therefore, pure production of goods but
the production of those goods which in the eyes of a part or the whole
of the community have some value."28 These goods must be produced at
reasonable prices and be adequate to satisfy needs. "This constitutes
a demand from the community for efficient production by means of
efficient administration, management and organization, skilled workman-
ship, fair profits, and legitimate wages."29 The major objective of
the planning process as seen by Sheldon are to achieve systematic,
complete, and detailed control of production.30
Miss Follett does not name specific objectives for business
organizations but implies that their ultimate objective is to be a
service to the community. "Business is and should be considered truly
a social agency."31 Efficiency of operation through better coordina-
tion and individual development and realization are among her favorite
topics. She saw management as that activity of business which is
responsible for the accomplishment of these objectives.
Koontz and O'Donnell think it is free enterprise in the United
States that is largely responsible for the attainment of social objec-
tives which are, of course, very diverse in nature. The determination
of methods for producing the goods and services that contribute to
their attainment is left largely to the discretion of private enter-
prise. One objective common to all organizations is efficiency of
operations. "But every enterprise, regardless of its nature, has an
objective of efficiency, that is of obtaining the maximum of what is
desired with the minimum of costs."32
Dale held the opinion that objectives are frequently not formu-
lated clearly nor well understood in the large firm. Since organiza-
tion is a means to an end, however, every organization is formed with
an objective in mind which should be clearly stated and understood by
departments and divisions in order to facilitate their coordination.
Although economic objectives are seen as the most important by Dale,
he thinks a business may have social as well as economic objectives:
to pay good wages, to make plants good places to work, to provide use-
ful products, or to operate so as not to distract from the appearance
or comfort of the communities in which they are located.
Newman, Summer and Warren hold the opinion that business firms
should have plural objectives, which among these is the rendering of a
service to society. Profit is important,
But for survival it is also essential that a company produce
goods or services customers want, that its conditions of
employment continue to attract competent employees, that it
be a desirable customer to the people who supply raw materials,
and that it be an acceptable corporate citizen in the community
in which it operates. Remgve any one of these essentials, and
the enterprise collapses.
Profit was considered a necessary objective of business by the
theorists, with all of them apparently recognizing its importance.
Each, however, valued it a little differently relative to social
objectives. Fayol does not discuss profit as an objective, but obviously
accepts it as a necessary requisite to the economic well-being of the
organization and the attainment of its other objectives. Sheldon and
Miss Follett both seem to hold this same view of profit; they see it as
flowing from efficient operations and successful satisfaction of human
needs. The early theorists have never questioned the need for profit,
in fact, believe it necessary to support the contention that there are
other worthy, even necessary, objectives as well as profit for a
Koonts and O'Donnell put considerable emphasis on the profit objec-
tive but stress that it is not the only one. It is possibly the only
one, however, that all business organizations have in common. They
admit there are many others, but think none are as widely accepted as
profit since economic necessity forces its acceptance. It would appear
that up to the time of the early theorists profit has been the major
objective of businesses so that it was necessary for them to point out
other important objectives to businesses. With the social objectives
having received considerable emphasis during the intervening time, the
contemporary theorists apparently feel compelled to re-emphasize the
necessity of profit. Even granting that social objectives should be
valued more highly than profit, profit is recognized as a prerequisite
to their realization.
Dale thinks the highest possible profit would be the objective of
business organizations. He wrote:
The highest possible profit is, however, a phrase susceptable
to many definitions. It may mean the largest dollar amount,
the highest profit on sales, or the greatest return on invest-
ment. The last is probably the most logical figure, though
not all companies emphasize it.31
He further stresses the point that planning for profit requires plan-
ning for subsidiary goals as well. Dale places more importance on
profit as an objective than do the other modern theorists. Newman,
Summer and Warren, for example, discuss profit as one of a group of
plural objectives, all of which are needed. They think profit is an
objective of importance if the firm is to continue to attract capital
and if it is to have a cushion which will enable it to meet the
inherent risks of business activity.
A number of additional objectives are mentioned. In some cases,
these objectives are closely related to either profit or one or another
of the social objectives. Koontz and O'Donnell, as well as Dale,
thought maximization of the firm's value to be an objective complemen-
tary to that of profit. Among other prominent objectives listed by
Koontz and O'Donnell are maintenance of management security, freedom,
power, and an adequate standard of living for employees. Newman,
Summer and Warren believe a firm should be a good customer within its
industry. Both Fayol and Sheldon felt adequate planning reduced the
level of hesitancy and the need for change in operations.
Selection of Objectives
The relevant question now becomes: What are the criteria used in
the selection of the objectives a firm is to pursue? There seem to be
fewer points of direct agreement in this area than in others. The
future environmental conditions, the state of the firm and its re-
sources, and a positive contribution to the long-range purposes of the
organization are the three points on which there was most agreement.
Sheldon is silent on the matter of objective selection by organiza-
tions, and Miss Follett has very few comments on the subject. Fayol
anticipates the current theorists in that he states that the firm's
present and future environment is the source of the limiting factors
of the selection process. A variety of environmental factors are
named by the various authors and there is some mutual agreement among
them, but mostly their statements seem to be illustrative rather than
The factors considered important by Fayol to the selection of
alternate courses of action (and objectives) are summed up in this
The plan of action rests: (1) on the firm's resources
(building, tools, raw materials, personnel, productive
capacity, sales outlets, public relations, etc.); (2) on
the nature and importance of work in progress; (3) on
future trends which depend partly on technical, commercial,
financial, and other conditions, all subject to change,
whose importance and occurrence cannot be predetermined.35
Koonts and O'Donnell believe objectives must be selected on the
basis of reasonable obtainability; they must also be established in
the light of critical premises about future environmental conditions.
There must be an integral relationship between long- and short-range
objectives if plans are to be pursued intelligently. Dale thinks that
a factor that has an effect on objectives is the availability of re-
sources, which sets limits on the specific, derived objectives that
are to be a means of achieving general objectives. These conditions
tend to establish limits so as to require objectives of certain types,
but they do not explain the sources of all the objectives sought by
firms. Dale believes that some objectives are given to organizations
because the objectives are the reasons for forming the organizations
in the first place. The organization is in this context a means
rather than an end in itself and is derived from the objectives, as
are its short-range objectives.
Newman, Summer and Warren see the selection of general objectives,
or master strategy, as that of: "Focus first on the industry--growth
prospects, competition, key factors required for success--then on the
strengths and weaknesses of the specific company as matched against
these key success factors."6 They also believe the selection of
general objectives should be related to the firm's future environment
and the conditions which are expected to be found there. Objectives
should therefore be based on forecasts of various types. They think
short-run objectives should be derived from long-run objectives and
should contribute to them.
There are several additional bases for the selection of objec-
tives that are brought out by the theorists individually. Fayol
thought the nature of the work in process, and its importance to the
firm were significant in this regard. Miss Follett's concern for the
selection of objectives was that they conform to a higher set of social
goals which she believed important. Her concept of the objectives of
organizations is reflected in this statement:
Group activity, organized group activity, should aim: to
incorporate and express the desires, the experience, the
ideals of the individual members of the group; also to raise
the ideals, broaden the experience, deepen the desires of the
individual members of the group . .37
Koontz and O'Donnell believe objectives must be selected on the
basis of their reasonable attainability. In the case of multiple
objectives, it is necessary that they be consistent and coordinated to
prevent their counteracting each other and slowing advancement toward
their common goal. Dale was concerned with social objectives, but
largely because, in some cases, social objectives may be forced on a
company. There are a number of ways by which this can occur,
including legislation of various governmental agencies, labor union
contracts, or marketing conditions which require certain forns of
behavior from a company. Newman, Summer and Warren recognize that
forecasts, which are the base of most objectives, naturally include a
considerable amount of uncertainty and, as a result, necessitate
reappraisal of objectives and adaptation to new conditions as they
arise. They further emphasize that objectives may be idealistic or
realistic and that it is very important that a given objective be
identified as one which establishes a working restriction or as one
whose realization can be expected.
From the material selected it is possible to draw some conclusions
about the nature and purpose of planning as well as about its objec-
tives. The first topic, the components of planning, reveals that all
the theorists involved in this study were very much interested in
planning and thought it a very important part of management activities.
From the agreement that exists among them, it can be concluded that
the planning process contains basically three phases: Tne selection of
the objective to be attained, the development of a course of action
which will result in its achievement, and the development of deriva-
tive plans which are the series of actions that are necessary to
execute the plan of action. While the early theorists recognized the
need for planning, they did not describe it in the same detail as the
contemporary theorists. With respect to the features of planning, the
theorists pretty well agree that there should be a maximum of flexi-
bility, continuity, unity, efficiency, and standardization incorporated
into normal plans.
The writers make very little distinction between the objectives
of the firm and the objectives of planning in their discussion. They
agree that profit is a necessary objective, but in addition point out
a rather extensive number of objectives, most of which could be grouped
together as social objectives. They place varying degrees of emphasis
on these social objectives, but all appear to think these are very
important to a business. In selecting objectives, there seems to be
agreement on the need to consider environmental conditions, the state
of the firm and its resources, and positive contribution to the long-
range purposes of the organization. The possible objectives that
might be selected are so numerous that there is little agreement
among them as to what specific objectives should be, apart from profit
and social contributions.
The points of common agreement among the theorists indicate what
are the most significant elements of planning procedure and objectives.
The points of dissimilarity are of little consequence to the identifi-
cation of planning characteristics, but they indicate the direction in
which each theorist was drawn and thus reveal not only interesting
aspects of a less significant nature about the subject, but indicate
a great deal about the interests of the theorists as well as influences
of the times. The emphasis on planning was too new for the early
theorists to know very much about the process and there were too many
other more pressing deficiencies for them to devote their time to its
development. The contemporary theorists, being under less pressure
to convince managers of the need for planning, were in a position to
devote time to the development of the process of planning. Priorities
would also seem to play a part in the discussion of objectives. The
early theorists operated in an environment where profit was well
accepted but social objectives were not. The contemporary theorists,
because of a period of downgrading of profit, felt a need to re-
emphasize it but without losing sight of the social objectives.
1Harold Koontz and Cyril O'Donnell, Principles of Management: An
Analysis of Managerial Functions (3rd ed.; New York: McGraw-Hill Book
Company, 1964), p. 69.
2Henri Fayol, General and Industrial Management, trans. by
Constance Storrs (London: Sir Isaac Pitman and Sons, Ltd., 1949),
3Oliver Sheldon, The Philosophy of Management (New York: Pitman
Publishing Corp., 1965), p. 60.
4Ibid., p. 219.
5Koontz and O'Donnell, op. cit., p. 71.
6Ibid., p. 81.
Ernest Dale, Management: Theory and Practice (New York: McGraw-
Hill Book Co., 1965), p. 348.
8Ibid., p. 366.
9bid., p. 370.
10William H. Newman, Charles E. Summer, and E. Kirby Warren, The
Process of Management (2nd ed.; Englewood Cliffs, New Jersey: Prentice-
Hall, Inc., 1967), p. 11.
lbid., p. 308.
12Sheldon, o2. cit., p. 218.
13H. C. Metcalf and L. Urwick, eds., Dynamic Administration: The
Collected Papers of Mary Parker Follett (New York: Harper and Brothers
Publishers,1940), p. 125.
14Fayol, op. cit., p. 45.
15Newman, Summer, and Warren, op. cit., p. 430.
16Metcalf and Urwick, op. cit., p. 153.
17Fayol, op. cit., p. 45.
19Sheldon, o2. cit., p. 224.
20Koontz and O'Donnell, op. cit., p. 90.
21Dale, oM. cit., p. 7.
22Newman, Summer, and Warren, op. cit., p. 11.
23Sheldon, op. cit., p. 215.
24Koontz and O'Donnell, op. cit., p. 72.
25Newman, Summer, and Warren, op. cit., p. 429.
26Fayol, op. cit., p. 50.
27Sheldon, p. cit., p. 73.
29Ibid., p. 74.
30Ibid., p. 218.
31Metcalf and Urwick, op. cit., p. 132.
32Koontz and O'Donnell, op. cit., p. 96.
33Newman, Summer, and Warren, op. cit., p. 477.
34Dale, o2. cit., pp. 351-53.
35Fayol, op. cit., p. 43.
36Newman, Summer, and Warren, op. cit., p. 446.
37Metcalf and Urwick, 2o. cit., p. 275.
CHAPTER III PLANNING (CONTINUED)
This section concerns the constraints within which planning must
take place and the conditions about which assumptions must be made in
order to carry out effectively the planning process. In many respects,
this topic parallels the previous one of selection of objectives since
these constraints and assumptions about the future not only limit the
means to ends but also restrict as well the range of alternative ends
which are possible. Premises may be divided conveniently into two
broad categories, those that exist external to the firm and those which
are found internally.
Forces from outside the organization that exert an influence on
the firm's planning process, through their restriction on what is
attainable and how it is pursued, are taken into consideration by the
management through the use of external premises. Since any force
.:xternal to the firm falls into this category, its coverage is
aviously very wide. The discussions directed to external premises,
are, as a result, quite general with the economic, business, political,
and social environment as the points of common emphasis' by those
theorists discussing it.
The matter of external premises is not discussed oy any the
early theorists beyond showing their concern for the need to .
selection of objectives consistent with the conditions that c ":ld
reasonably be expected to exist. The current writers, too, have
little to say but to acknowledge the need for them; perhaps they
simply take them for granted. This lack of comment is due perhaps
to the endless nature of the environmental factors with direct or
indirect relevance to a firm's operations and is such that any dis-
cussion of them would be almost meaningless.
Koontz and O'Donnell classify external premises, the majority
of which are beyond the control of the firm, into three groups:
(1) The general business environment--political, economic, social,
and technological conditions. (2) The product market--the conditions
influencing the demand for the firm's products. (3) The factor
market--conditions relative to land, labor, location, materials,
parts, and capital.1 The business organization would normally be
concerned with all of these external factors, but some of them would
not be important to the non-business organization.
Dale comments on premises only very briefly and indirectly. He
states the belief that, for a manager to be effective in planning, he
must forecast the economic, social, and political conditions that
are expected to exist in the environment in which his organization
will be operating.2
In contrast with the external, internal premises are made about
conditions found within the organization that exert an influence on
the manner in which the firm is able to undertake its desired
activities. On this subject the early theorists had less to say than
did the modern. Although Fayol discussed them, Sheldon and Miss
Follett did not write on the use of internal premises. Fayol
approaches internal premising by pointing out the restrictions
imposed on plans by the need to integrate them with each other. The
modern writers are all somewhat concerned with the need for internal
premises. The financial conditions of the firm were considered by
three of the theorists, while the management and restrictions
imposed by the short term plans on the long term were both discussed
in two of the books.
Fayol writes that the yearly plans and the ten-yearly plans
which he suggests will diverge and that it is necessary to revise
the ten-yearly plans to keep their objectives consistent with those
of the annual plans. The present plans thus restrict the long term
plans. Plans should include specific assumptions about the condi-
tions expected in certain areas of operation with consideration
being given to the nature of technical, commercial, financial,
accounting, security, and management conditions.
Koontz and O'Donnell list among internal premises the following:
(1) sales forecast, (2) capital investment in plant and equipment,
(3) policies, (h) major plans already decided, (5) characteristics of
top management, (6) anything else internal that influences or
dictates the type of planning to be done.3 Dale writes that, having
established objectives, . the planners must decide how far
they can proceed toward them in view of the resources available which
include money on hand, the money that sales will bring in, and the
funds that may be obtained by borrowing or selling equities."h
Newman, Summer and Warren believe it is impossible in a more
complex situation to gather all the necessary facts together at the
same time and at the same place. For purposes of decision making,
facts are obtained by people in different places and at different
times. In addition, not all decisions pertaining to the same
situation can be made simultaneously. "Instead, conclusions are
reached in sequence--often by different individuals and one conclusion
becomes a premise for the rest."1 In projecting consequences, the
linking of one conclusion and another in a sequential fashion is
particularly significant in two ways. (1) Careful attention must be
given to the means by which each premise is set. Personal bias and
faulty communication may introduce considerable error if these are
not observed and accounted for. (2) Sequential analysis allows for
uncertainty absorption. At each step some uncertainties are allowed
in order to limit the uncertainty that is faced by the manager in
the next step of the process.
Decision making has come to be considered an important, integral
part of the planning process. The idea of planning emphasizes making
a choice from among available alternatives. While there is no
universal agreement on the ingredients of decision making, two areas
in the process are nearly always essential. These are the deter-
mination and the evaluation of alternatives in order to provide a
logical base for selecting from among them.
The theorists do not have a great many common ideas on matters
related to the selection of alternatives. Most of them attach a
great deal of importance to development and selection of alternatives,
but they do not see the process of doing it in the same light. An
idea about alternatives on which they tend to agree is that they are
the elements of a situation that create a conflict and make a
decision necessary for its resolution.
The problem of developing alternatives is given little attention
by Fayol and Sheldon; they probably assumed that alternatives are
available and known to the manager and that making the choice from
among them is the problem of real concern. Miss Follett put
considerable emphasis on the development of alternatives and believed
better decisions can be made by so doing. Koontz and O'Donnell are
in agreement with Miss Follett in that they stress the need for
managers to develop new, constructive alternatives. The theorists
each developed their own approach to decision making and the
selection of alternatives which it necessitates.
Miss Follett favored dealing with the conflict by means of
integrating the different points of view rather than by the more
common method of choosing from among them. She believed that there
are three main methods of dealing with the conflict: domination,
compromise, and integration.7 In domination one side or one view-
point wins and the other simply loses. In compromise the difference
is split in some fashion so that both receive a little and both lose
a little. In integration a conflict is resolved such that "when two
desires are integrated that means that a solution has been found in
which both desires have found a place, that neither side has had to
In achieving integration the first step is to bring the differ-
ences into the open. The next step is to break up the demands into
their component parts for examination. Miss Follett wrote:
You will notice that to break up a problem into its various
parts influences the examination of symbols, involves, that is,
the careful scrutiny of the language used to see what it
really means . it seems to me that this is the method
which should be applied to controversy.9
An important part of this process is the anticipation of demands, of
differences, and of conflicts. Since business involves a series of
actions and interactions, response is involved and should be con-
sidered as either circular or linear. Linear response is the simple
situation of cause and effect, whereas circular response may be
preceded by a motivating event but is in turn followed by another
response, then another, etc.
Koontz and O'Donnell think that the first step of decision making
is to develop alternatives consistent with goals and premises. "The
ability to develop alternatives is often as important as making a
right decision among alternatives."10 It is very rare for there to
be a complete lack of alternatives. Primary attention must be given
to those factors that are strategic to the decision involved. This
principle lies at the base of selection for alternatives. Since
limiting factors tend to change in time, it is necessary that the
search for them be continuous.
Dale believes that the rational decision making process is the
one frequently used by economists, consisting of "(1) first making
certain assumptions in the interest of simplification so as to make
the decision manageable, (2) then consider the consequences of
various courses of action, (3) relax the assumptions."11 Both
rational factors may be identified and either altered or allowed for,
if the manager knows their importance and looks for them. The
irrational may be allowed for, but they are more difficult to identify
and often impossible to manage. Dale also thinks decisions can be
grouped according to three general types: policy, administrative,
and executive. These are usually made by the top, middle, and lower
levels of management respectively.
Newman, Summer and Warren divide decision making into broad
groups of activities that include: (1) Diagnosis of the problem
situation. (2) The creative element which consists of looking for
new ideas and alternatives. (3) Comparing courses of action. (C)
The making of choice.12 The two most common sources of alternatives
are the manager's past experience and the practices of other managers
or companies in their handling of similar situations. Imitation,
however, can be hazardous and situations are seldom replicated in a
given firm. Fresh ideas are usually needed, and the creative element
is necessary for their development. Rnphasis then needs to be put on
the creative process. While there is no standard to follow, the
creative process can include roughly these steps. (1) Saturation;
becoming broadly familiar with the program. (2) Deliberation; mulling
over and analyzing ideas. (3) Incubation; turning off the conscious
and letting the subconscious mind work. (L) Illumination; hitting
upon a bright idea, sensing that it may be the answer. (5) Accommo-
dation; clarifying the idea, seeing if it fits the requirements of
the problem and getting other people's reactions to it.13 In
combining diagnosis with creativity, it is expected that the process
will be productive of practical alternatives for management consid-
Having identified the available alternatives to a given decision,
it is then necessary for the manager to evaluate their relative
merit. This process of evaluation was not discussed by either Fayol
or Sheldon, although Fayol strongly and consistently advocates
continued awareness of both the feasibility of courses of action and
their resulting effect on profitability. Miss Follett took the
negative point of vier to discuss the obstacles to integration in a
conflict situation. In doing this, she gives insight into the
factors that have a bearing on the ability of nonagers to arrive at
satisfactory solutions to conflicts. Her concept of integration
is basically one of finding the best possible alternatives available
in a situation of conflict. The obstacles to integration which she
discusses include: (1) It requires integration perception and
inventiveness. (2) Many people enjoy domination of others. (3) The
matter disputed is too often theorized over instead of taken up as a
proposed activity. (h) Terminology may have been inappropriately
chosen. (5) The undue influence of leaders often prevents successful
integration. (6) There is a lack of training for integration.14
Some of these obstacles hint very strongly at the avenues of approach
for evaluating alternatives.
On the surface there seems to be a considerable discrepancy
between the views of the current theorists on the evaluation of
alternatives. When problems of terminology, however, are considered
they agree on a number of points. The process of evaluation should
be rational and realistic; even Miss Follett thought disputes are
too often theorized over rather than taken up as proposed activities.
Along this line, Koontz and O'Donnell stress the tangible and the
intangible factors; Dale points out knowledge of the subject matter;
Newman, Summer and Warren note the need to be rational. The use of
marginal analysis where possible is a point that Koontz and O'Donnell
have in common with Newman, Summer and Warren. The desirability of
quantifying factors where possible to facilitate their comparison is
emphasized by all the current theorists.
To Koontz and O'Donnell, additional factors for consideration
in the evaluation process include changing conditions and uncertain-
ties. If provisions can be made for changing conditions, in a
dynamic business environment, then a more practical selection of
alternatives can be made. Dale believes company profits and stability
are the most significant criteria that are used in making most busi-
ness decisions. He, too, is aware of uncertainty: "Where possible,
hedging is a wise procedure in decisions in which some of the factors
are impossible to obtain.1 15 The act of decision-making is not as
easy to identify as are the preliminaries of the decision making
process. Dale believes
.improvement in decision making can be fostered by:
(1) Giving people more training in areas with which they are
too unfamiliar to decide between conflicting vieus of experts.
(2) Changing the organization structure and giving people
down the line both more authority and more clear-cut authority.
(3) Changing the attitude of top management, which is, of
course, a feat that can usually be accomplished only by top
Knowledge of the subject matter and the pressures imposed by superiors
are more important to the manager than is knowledge of the decision
making process itself. The point about superiors imposing pressures
would seem to receive support frum Miss Follett who wrote about undue
influence by leaders.
Neman, Summer and Warren think that, given alternatives, it is
necessary to start evaluation by identifying all significant conse-
quences related to each of these alternatives. The consequences of
any given alternative will probably be both desirable and undesirable.
Next it is preferable to disregard the common aspects of the alterna-
tives being considered and focus attention on the differences that
exist among them. Later, separate attention can be given to improving
the common elements, and it should be. But attention should first be
focused on the uncommon ones. This should be accompanied by a pro-
jection of the expected consequences of the alternatives.
To expedite getting at the chief issues of the best alternatives,
they can concentrate on crucial factors. Actually, two kinds
of crucial factors are helpful: requirements that must be met
and major considerations.17
There are other forms of formal planning, but none are used as
extensively or serve the fundamental purpose of guiding planning as
well as policies. They are the first step toward the attainment of
objectives and establish the base upon which additional plans are
constructed. Because of their importance, policies are often given
special attention as planning devices. They provide the framework
within which other planning must be done and operations carried out.
An examination will be made of their formulation and implementation
as guides in the planning process. Only two sets of authors wrote
on the topics of policy formulation and evaluation.
All of the early theorists, and Dale, wrote nothing about
formulation of policy. The points the other current authors had in
common include assuring that policies are consistent and that they
make a contribution to the objectives of the firm. They think
policies are for the purpose of limiting the area of decision making
for a manager. They also have in common the recognition that policies
are not always consciously established, that sometimes they just grow
to meet the situation.
Koontz and O'Donnell view policies as a means to . .delimit
an area within which a decision is to be made and assure that the
decision will be consistent with and contributing to objectives."l8
Policies should affect every type of activity undertaken by the firm
and are formulated from three different sources: (l) originated
policy developed by top management, (2) appealed policy resulting
from settlement of problems handed up through the organization, and
(3) externally imposed policy resulting from factors outside the
Newman, Summer and Warren consider policies to be a form of
standing plan. Preparation of policies should follow the precepts of
decision making in order to be useful management tools.
But in fact, standing plans are not always consciously and
deliberately established. Some are like common law--that is,
they are practices that just grow, become accepted behavior,
and are then enforced by those in official positions.19
The purpose of standing plans is to establish some degree of consis-
tency in behavior in order to render future behavior predictable.
Policy does not tell a person what to do, but it points out to him
the direction he should take.
It is noted that Koontz and O'Donnell, along with Newman, Summer
and Warren, were the only theorists to discuss the implementation or
evaluation of policies for the purpose of obtaining the best results
from the operation of an organization. These authors present guide-
lines to be followed for assuring the best use of policies by
managers. While these guidelines are not identical, there is consid-
erable similarity between them. Their writing suggests a common
view: that planning implementation should be done in a manner that
will reflect firm objectives, be consistent, be adaptable to the
conditions or alternatives of the firm, and make efforts to have all
affected subordinates aware of the plans and what they entail.
Koontz and O'Donnell believe all companies have policies even
though they may be poor, inadequate, or improperly used. They
recommend guidelines for making policies effective by suggesting that
policies should be reflective of objectives and plans, consistent,
flexible, distinguished from rules and procedures placed in writing,
taught and controlled. They believe that following these guidelines
can help create effective implementation of existing policies by
improving both the quality of the policies and their utilization.
Newman, Summer and Warren think that standing plans--of which
policy is a form--should be carefully designed, logically related
to objectives, based on careful analysis of alternatives, and backed
by scientific evidence. To be used effectively, it is also necessary
that the organization members be taught the policies and how to
follow and utilize them. The major guide to evaluation seems to be
how well the policy helps in guiding the conduct associated with a
given activity. "The skill of a manager in using policies lies in how
well he decides just what kind of guidance will be helpful."20
There are a number of factors related to the planning function
that require close scrutiny. These are found in areas of special
consideration which are related to planning because of their special
association with that activity. As aspects of planning, participa-
tion, coordination, and communication will be examined, with attention
given to their nature and place in planning. Also, the theorists'
ideas about the limitations and requirements of planning are of
interest because they identify conditions which the theorists think
should be met in order to perform the planning function properly.
The participation of subordinates in the planning process is a
subject on which all of the theorists agreed without exception. The
difference in their views on the matter pertains to the degree of
participation and its extent. All apparently believed managers at
subordinate levels should participate, but only Sheldon and Miss
Follett specifically mentioned the participation of workers.
Unanimity did not, however, extend to include such things as who, how
much, when, or on what matters participation should be encouraged.
The more generally accepted reasons for participation include
obtaining a wider span of experience to apply to plans, cooperation,
and knowledge of plans. Fayol thought participation would be very
desirable since it resulted in a plan being worked up through the
organization to be finalized at the top:
So, having been prepared with meticulous care by each regional
management, with the help of departmental management, and then
revised, modified, and completed by general management and then
submitted for scrutiny and approval to the Board of Directors,
these forecasts become the plan which so long as no other has
been put in its place, shall serve as guide, directive, and
law for the whole staff.21
Koontz and O'Donnell think that the best way to assure adequate
knowledge of and loyalty to plans is to have as many managers as
possible participating in their preparation. On the other hand, Dale
stresses that planning is done with the aid of specialists in areas
such as economics, marketing research, and the like. These people
usually function in a staff relationship with line managers at various
levels of the organization. It is possible to have planning groups
work only with the chief executive but
. many companies believe that it is better to allow the
heads of departments and divisions to make their own plans,
with only such modification at higher levels as is necessary
to ensure that the plans are feasible and desirable from the
viewpoint of the company as a whole.22
Newman, Summer and Warren think it best that . when
formulating a plan, a manager draws on the ideas of his subordinates
and others who will be affected by the plan."23 An executive should,
however, use discretion in selecting the problems, degree, and
subordinates for sharing his planning.
Sheldon and Miss Follett were both strong supporters of subor-
dinate participation in the planning process of a firm but went
further than the other theorists by suggesting that workers be allowed
to participate as well as managers. This would seem to be more a
matter of extent of participation, or at least one aspect of it, than
simply one of participation. Sheldon held the view that workers
should be allowed some degree of participation in the formulation of
policy within firms on the grounds that industry is an extension of
society. Since all citizens are entitled to participation in the
establishment of community ideals, . the worker is justified in
claiming that the principles which govern the controls of himself
as a citizen shall all apply to the control of himself as a worker."24
Management should also be concerned in the interpretation of local
communal ideals. To aid in this enlightened interpretation and
determination, management should introduce workers to some share of
Miss Follett believed that it was not adequate to present policy
to workers in such a way as to get their consent: "I agree partly
with this but not wholly. The most progressive view of employment
representation to-day, as of democracy, is not consent of the governed,
but participation."25 And what was her idea of participation? She
We concluded . did we not, that democracy does not mean
merely all taking part, that democracy should mean organization,
the relating or parts, co-functioning? This should be the
definition of participation. . .participation must involve
the interpenetration of ideas of the parties concerned . .
Participation should not only be extensive among managers but
intensive as well, in the view of Fayol:
The study of resources, future possibilities, and means to be
used for attaining the objective call for contributions from
all departmental heads within the framework of their mandate,
each one brings to this study the contribution of his experience
together with recognition of the responsibility which will fall
upon him in executing the plan.27
The extent of participation, according to Koontz and O'Donnell,
should be to include all areas of authority of a manager touched on by
the operation of the plan in question. They write: "Participation
in all planning affecting a manager's area of authority through his
being informed, contributing suggestions, and being consulted, leads
to good planning, loyalty, and managerial effectiveness."28 Newman,
Summer and Warren agree with this point of view thinking it best
" . .that when formulating a plan, a manager draws on the ideas of
his subordinates and others who will be affected by the plan."29 They
think varying degrees of participation are possible and the amount
that is desirable depends on "(a) who initiates the ideas, (b) how
completely a subordinate carries out each phase of decision making,
(c) how much weight an executive attaches to the ideas he receives."30
Conditions are also recognized by Newman, Summer and Warren which will
help determine when participation is feasible. One of these is the
time available for making the decision. Another characteristic is
that motivational factors that deadlock with each other should be
avoided. A third factor is the capacity and willingness of the
subordinates to contribute to the plan. Finally, the extent to which
it will foster voluntary cooperation and how badly this is needed
should be considered.
On the subject of coordination of planning the authors who
discussed the topic were Sheldon, Koontz and O'Donnell, and Newman,
Summer and Warren. All of these seemed firmly convinced of the need
for such coordination in planning. Each, however, appeared to favor
different methods of achieving it. It would appear that Sheldon was
concerned with the organizational structure necessary for coordination.
Koontz and O'Donnell were concerned with what can be accomplished
through coordination. Newman, Summer and Warren were, on the other
hand, concerned with why coordination is necessary to successful
planning and the particular needs it satisfies.
Sheldon observed that a committee may be necessary to accomplish
coordination when the subjects are variable; where they are standard,
machinery can be established to accomplish coordination. Sheldon
says that . for the purpose of determining a policy, coordination
by committee is probably necessary, in executing that policy coordina-
tion by the establishment of the necessary machinery is more normally
Koontz and O'Donnell assert that coordination is necessary to
make and keep derivative plans consistent with major plans and requires
clear delegation of authority. Managers tend to forget the complexity
associated with the derivation of plans. "A great advantage of some
of the new planning in control systems is that they force managers to
consider these intricacies."32 They also advocate adequate timing,
both horizontally and vertically, in the structure of plans.
Newnan, Summer and Warren argue that employees should be allowed
freedom to adjust to circumstances as they arise. They believe:
Consequently, in every company for large quantities of inter-
related work people voluntarily coordinate their actions when
necessary. Each person acting within his own areas of discretion
adjusts to the needs of other workers.33
Common agreement on a set of objectives helps the process to work at
its best. In their opinion, "When the significance of each task is
defined in terms of clear-cut objectives, then exchanging information
enables each person to fit his actions into coordinated effort."'3
Only two of the subject books present ideas on the topic of
communications in planning. Koontz and O'Donnell emphasize the need
for access to complete information, insofar as it is available, if
planners are to do their best job. They think that many of the
problems of planning result from a lack of good communications.
Newman, Summer and Warren emphasize in their writing the causes of
communications problems. They observe that it is communications that
provide planners with the ideas and knowledge essential to the best
performance of their task. All of their observations are geared to
the common belief that planners depend on the ideas and information
which are provided them through the communications system.
Koontz and O'Donnell think the subordinate levels of planning
suffer from a lack of adequate knowledge about objectives, premises,
policies, and higher-level plans. Top management knows its objectives
and workers know theirs, but there is a planning gap in the middle
and upper management where managers do not know how to tie departmental
objectives into those of the enterprise. This problem results from
practical communications problems, lack of understanding for the need
of communications, and security needs. Granted there are some natural
limitations that restrict information, still it becomes apparent that:
"The best planning occurs when everyone has access to complete infor-
mation affecting the areas for whose planning he is responsible."35
Newman, Summer and Warren believe schemes are needed to enable
the manager to benefit from the knowledge of ideas of others, since "
. exchange of ideas in information is the typical and natural way
of making decisions within organizations."36 There are organizational
frictions that result from the dispersion of the planning effort that
reduce the effectiveness of communications. People who provide
information summarize and interpret and thus color communications with
their own knowledge and feelings about the subject matter. The higher
the executive the greater the incidence of screening and condensing,
resulting in an increase in the amount of loss in communication. In
spite of this, Newman, Summer and Warren write: "Yet, plans must be
based primarily on information supplied by other people."37
Limits and Requirements of Planning
The limits and requirements of planning are closely associated
because most requirements are needed to overcome limiting factors to
which planning would otherwise be subject. Some of the theorists
discuss both limits and requirements, some discuss one or the other.
The limitations that are discussed by more than one author include
the lack of competent, conscientious personnel and internal inflex-
ibilities or frictions that exist within the firm that can occur in
a number of forms. Although Miss Follett did not write on the
limitations or requirements of planning, the other theorists did, and
there seems to be considerable variation in their points of view. The
similarity of their observations concerned the level of competence
of personnel, consistency, and predictability. These appeared in
most of the writings, either directly or through some related feature.
Fayol thought the use of plans in some firms is limited because
of the lack of personnel with sufficient competence. He was of the
opinion that planning requires certain abilities:
The compilation of a good plan demands for the personnel in
charge: (1) The art of handling men, (2) Considerable energy,
(3) A measure of moral courage, (b) Some continuity of tenure,
(5) A given degree of competence in the specialized requirements
of the business, (6) A certain general business experience.38
These conditions presuppose experience and intelligent management.
Koontz and O'Donnell believe that limitations on planning should
not bar effective planning, but they are real and should be recognized.
One limitation is accurate premising. Rapid change is a second
limitation. Internal inflexibilities also limit the effectiveness
of planning. For example, such things as psychological policies or
procedures for capital investment. External inflexibilities offer
added limits, while time and expense are still other limitations.
Newman, Summer and Warren think that one of the major areas of
limitations to planning is the variety of frictions that develop when
ideas of different people are brought to bear on a decision. The
sources of friction which they discuss are: (1) differences in
perception of objectives; (2) distortion and loss in communications;
(3) the persuasive advisor who intentionally sways the decision maker;
(b) unofficial influence exerted by informal groups on values, beliefs,
and acceptance actions; (5) personal wants such as aspirations, needs,
In the area of requirements of planning, there are a few more
points that theorists have in common including control, consistency,
allowance for change, overcoming internal inflexibilities, and partic-
ipation or decentralization of authority. To safeguard against
incompetence resulting from the lack of competent personnel, Fayol
suggests using the following guides: "(1) A plan must be compulsory.
(2) Good specimen plans must be made generally available. (3) Planning
as a subject must be introduced into education."40
Sheldon believed consistency was a necessary characteristic of
planning. He wrote: "Planning in fact cannot be effective unless the
same system of planning applies through the whole route."il Central-
ization of planning would thus appear necessary to assure the
achievement of good plans; he thought localized planning had distinct
drawbacks for achieving consistency. In regard to what is necessary to
execute good planning, Koontz and O'Donnell feel that several positive
conditions can be identified; they provide that it must: be deliberate
and not be left to chance, start at the top of the organization, be
organized, be definite, include awareness and acceptance of change,
and integrate long range plans with short range plans.L2
Dale focuses his attention more on the decision-making policies
than on planning and thinks that managers must be specifically trained
in areas with which they are not familiar. The delegation of authority
in a clear, distinct manner enables people to know when and how they
are expected to act. Fostering the development of a favorable attitude
on the part of management about decision making can be very helpful.
These features can be extended reasonably to apply to the planning
As far as requirements of good planning are concerned, Newnan,
Summer and Warren think that participation is very important because
of the advantages of added experience and increased points of view
it givos the decision maker. Also, getting ideas and information
from as many sources as possible is desirable. Having planning spread
over an adequate span of time is also essential if the planning is
to be of good quality and serve its purpose.
Since this chapter deals with more detailed facets of planning
than the previous chapter, it is not surprising to find a relatively
smaller number of the theorists writing on each of the topics. There
is, however, an equal amount of agreement among the theorists on the
several topics they discussed. Conclusions to be drawn about external
premising are the following: (1) It should take into consideration
problems and influences arising from the general economy and conditions
of the business, political, and social environments. (2) The discus-
sion of internal promising was directed at slightly less general
topics and included financial conditions, quality of management, and
the short term plans to which the firm is already committed. (3)
Decision making necessitates selection of alternatives which are seen
generally to be the conflicts of situations that make decisions
necessary, and it is very desirable that managers seek out or develop
alternatives to evaluate and from which to select. There was less
agreement on the last point than on some of the others. It is further
agreed that the evaluation of alternatives must be a rational or
realistic process to be effective; also, marginal analysis should be
employed where possible. Marginal analysis is aided by quantification
of the factors involved, as are other methods of analysis.
On formulation and evaluation of policy, only two cohtCemporary
theorists made comments. What they agreed upon about policy formula-
tion includes consistency, contribution to objectives, delimitation
of decision areas, and frequent spontaneous growth. Their common
views on evaluation and implementation suggest that policies should
be chosen to reflect firm objectives, be consistent, be adaptable to
conditions, and see that all subordinates are aware of them. The
several planning functions examined reveal certain characteristics
that should be associated with these functions in order to facilitate
policy formation and utilization. All of the theorists believed in
some degree of subordinate manager participation with two supporting
worker participation. This was thought to be the source of a number
of advantages such as gaining use of a greater span of experience,
cooperation, and knowledge of plans. Coordination of plans would
seem to be a necessity, but the methods to achieve it can vary.
Communications are needed to provide managers with ideas and infor-
mation necessary to their planning. The limits on planning are a
lack of competent or conscientious personnel and internal inflexi-
bilities or frictions. The requirements of planning include control,
consistency, allowance for change, overcoming inflexibilities, and
decentralization of authority in the form of participation.
The early theorists recognized the basic need to plan. It is
apparent that they gave attention to some of the problems of planning,
but mostly to those that caught their eye rather than those which
emerged from a detailed study of the entire procedure. This further
supports the view that they were faced with priorities and simply
could not deal with everything. The contemporary theorists were much
more complete and detailed in their treatment of the subject, as
would be expected. They have benefited from the discovery of a more
complete array of problems and more extensive examination of them by
other authors since the writings of the early theorists.
1Harold Koontz and Cyril O'Donnell, Principles of Management: An
Analysis of Managerial Functions (3rd ed.; New York: McGraw-Hill Book
Company, 1964), p. 108.
2Ernest Dale, Management: Theory and Practice (New York: McGraw-
Hill Book Co., 1965), p. 5.
3Koontz and O'Donnell, op. cit., p. 108.
4Dale, op. cit., p. 352.
5William H. Newman, Charles E. Summer, and E. Kirby Warren, The
Process of Management (2nd ed.; Englewood Cliffs, New Jersey: Prentice-
Hall, Inc., 1967), p. 434.
6Ibid., p. 435.
7H. C. Metcalf and L. Urwick, eds., Dynamic Administration: The
Collected Papers of Mary Parker Follett (New York: Harper and Brothers
Publishers, 1940), p. 31.
8Ibid., p. 32.
9Ibid., p. 41.
10Koontz and O'Donnell, op. cit., p. 136.
11Dale, op. cit., p. 565.
12Newman, Summer, and Warren, or. cit., p. 309.
13Ibid., p. 338.
14Metcalf and Urwick, pp. cit., p. 45.
15Dale, op. cit., p. 566.
16Ibid., p. 571.
17Newman, Summer, and Warren, op. cit., p. 375.
18Koontz and O'Donnell, op. cit., p. 75.
19Newman, Summer, and Warren, op. cit., p. 489.
201bid., p. 492.
21Henri Fayol, General and Industrial Management, trans. by
Constance Storrs (London: Sir Isaac Pitman and Sons, Ltd., 1949),
22Dale, op. cit., p. 397.
23Newman, Summer, and Warren, op. cit., p. 181.
2401iver Sheldon, The Philosophy of Management (New York: Pitman
Publishing Corp., 1965), p. 88.
25Metcalf and Urwick, op. cit., p. 171.
261bid., p. 212.
27Fayol, op. cit., p. 48.
28Koontz and O'Donnell, or. cit., p. 181.
29Newman, Summer, and Warren, op. cit., p. 533.
30Ibid., p. 534.
31Sheldon, op. cit., p. 223.
32Koontz and O'Donnell, op. cit., p. 180.
33Newman, Summer, and Warren, op. cit., p. 473.
35yoontz and O'Donnell, op. cit., p. 180.
36Newman, Summer, and Warren, op. cit., p. 430.
371bid., p. 440.
38Fayol, op. cit., p. 50.
39Newman, Summer, and Warren, op. cit., p. 439.
40Fayol, op. cit., p. 51.
41Sheldon, oa. cit., p. 224.
42Koontz and O'Donnell, op. cit., p. 197.
CHAPTER IV ORGANIZING
The second management function is the activity, organizing.
This function is concerned with the placement of elements within
firms and the establishment of relationships within the framework
of group endeavors. Although the ingredients of organization are
not agreed upon by theorists, the importance and need for the function
itself is generally recognized as an essential activity of management,
and it is present in some form or other in all group activities.
Nature and Purpose
Represented in this section is a comparison of the thoughts of the
selected theorists pertaining to the nature and purpose of organization.
This is undertaken to show why they viewed the process of organization
as an essential management activity. In order to examine their ideas,
formal and informal organizational concepts are distinguished.
Formal organization is that which results from the conscious
design of management and is the intentional grouping of activities and
establishment of relationships. The theorists believed the act of
structuring such relationships to necessitate consideration of a nLuber
of factors. All of them had ideas to express about organization in the
formal sense, but most did not distinguish clearly between its nature
and purpose. The features of organization that two or more of the
theorists had in common include: provide the factors of production,
maintain unity of command and direction, provide for change, achieve
maximum efficiency, create a decision-communications network, and
provide for coordination.
Most of the theorists put considerable stress on organization and
are concerned primarily with people in the organization, the work they
do and the relationship they have with one another. This includes
assignment of authority and responsibility and the development of
communications necessary for making good decisions. Sheldon stressed
the performance of the basic functions and also considered organizing
as an activity essential but apart from management. Miss Follett, on
the other hand, devoted her attention almost exclusively to the
relations of people plus their determination of and participation in
Fayol and Sheldon both thought of organization as a means of pro-
viding the necessary factors of production and the structuring of
channels through which the work of the organization could flow. Fayol
thought organization to be a tool which enables management to perform
its functions effectively. His attention was focused on human organi-
zation but he recognized, however, that organization deals with both
people and materials. Fayol wrote:
To organize a business and to provide it with everything useful
to its functioning: raw materials, tools, capital, personnel.
All this may be divided into two main sections, the material
organization and the human organization.1
The conduct of a given enterprise entails performance of certain
activities which the management personnel should be capable of exe-
cuting if given essential material resources.
Sheldon's concept of organization is that it consists of the pro-
cess of combining the work individuals or groups must perform with the
necessary resources so as to provide the best channels for positive,
efficient, and coordinated application of effort. He did not define
management to include organization, and thought that, as an activity,
organizing precedes management. He also pointed out factors excluded
from organizing by writing:
It is no business of the organizer, for instance, to consider
whether the product is good, fair or bad, whether the office
machinery is efficient, whether the engines are old or new,
whether the workers are efficient or inefficient. Those are
tasks of management. The organizer must accept these as
fundamental and constant.2
Although separate and distinct, it was apparent to Sheldon that the two
activities of organizing and managing definitely go together and
neither could function without the other.
One of the features of formal organization stressed by Fayol is
that of unity of command, a matter on which he received support from
Koontz and O'Donnell and Dale. This is the idea that an employee
should receive orders from only one superior. A corollary to this is
unity of direction, ". . one head and one plan for a group of acti-
vities for the same objective."3 Koontz and O'Donnell express the
same idea by saying: "Organization should be designed to clarify the
environment so that everyone knows who is to do what; to remove
obstacles to performance caused by confusion and uncertainty of assign-
ment; and to furnish a decision-making communications network
reflecting enterprise objectives."4 Dale thinks that the decision-
making ability of people determines the effectiveness of the utili-
zation of all resources and that their best utilization is a prime
necessity. Each person must know what to do and the efforts of all
must be coordinated. Dale thus concludes:
Organization as the term is used in management, then is a method
of ensuring that: 1. The work necessary to achieve the goal is
broken down into segments, each of which can be handled by one
person. 2. There is not duplication of work. 3. All efforts
are bent toward a common goal.5
Not only do these writers see unity of command and direction as
important, but also the establishment of decision-communication
networks by means of organization.
The ability to adjust to change as it is encountered in a dynamic
economy is an important characteristic of organizations. Newman,
Summer and Warren point this out along with three other basic consider-
ations that are involved in all structural formation: "(a) the balance
and emphasis we wish to give to various departments, (b) the way we
overcome limits to the effective span of supervision of each executive,
(c) the provision we make for dynamic change, and (d) how we manage to
integrate organizing with the other phases of management."6 Formal
organization was considered by Miss Follett to be a changing thing,
with little alterations being made each day. The whole executive force
thus has an opportunity to contribute to organization, especially with
authority associated more with capacity and less with position than has
previously been the case.
Koontz and O'Donnell believe that the focus of organization should
be on the activity-authority structure. This entails grouping acti-
vities and assigning them along with authority to a responsible person.
In their opinion,
. organization, then, involves establishment of authority
relationships with provision for coordination between them,
both vertically and horizontally in the enterprise structure.
Using organization as a structural system appears to the
authors to be more realistic than other concepts of organi-
Fayol also related authority to organizational structure and noted that
authority is increasingly concentrated as it is transmitted upward from
one stage of the organization to the next. It becomes more diffused
with its transmission downward and extends to all parts of the
Another feature of concern to Fayol is the authority relationship
of individuals and the route followed in the transmission of authority.
The scalar chain is the chain of superiors ranging from the
ultimate authority to the lowest ranks. The line of authority
is the route followed--via every link in the chain--by all
communications which start from or go to the ultimate
Closely associated with authority in Fayol's view was the problem of
order--both material order and social order. His idea about order was:
For social order to prevail in a concern there must, in accord-
ance with the definition, be an appointed place for every
employee and every employee be in his appointed place . .
Social order demands precise knowledge of the human require-
ments and resources of the concern and a constant balance
between these requirements and resources.9
Balance was also stressed by Newman, Summer and Warren.
Another feature of organization that was pointed out by several of
the theorists is that the effectiveness of an organization is dependent
on the quality of the personnel with which it is staffed. Fayol
thought that "the general form of an organization depends almost solely
on the number of its employees."10 "This likeness is explained by the
fact of there being identity of functions in business of the same type,
or else a preponderance of similar functions in enterprises of differ-
ent types."11 The similarity of appearance does not necessitate the
same detail of structure or the same organic quality. These are
dependent upon the personal qualities of the individuals who compose
them; . every intermediate executive--can and must be a generator
of power and of ideas."12 The quality of personnel determines the
effectiveness of the organization and is a limiting factor in the
growth of organizations.
Stressing that organizational quality is dependent on the person-
nel in it, Koontz and O'Donnell make the point that organization is not
mechanistic. People are the central concern of managers; .
organization must be so structured that people can perform in the
environment that it furnishes.113 Dale, as well as Newman, Summer and
Warren, emphasized the relationship between an organization and its
personnel. Although they thought quality important, their major con-
cern was with the effective utilization of personnel, including task
assignment and coordination.
A number of additional aspects of formal organization were pointed
out by the theorists as individual items of interest or concern.
Included among these is Sheldon's belief that "the form of an organi-
zation depends upon the extent to which the basic functions of a
business have been developed and distinguished by delegation."l1
Sheldon also identifies five basic ingredients that have to be intro-
duced into any attempt at organization. These include (a) work to be
done, (b) an objective, (c) human faculties, (d) relationships,
(e) methods.15 Fayol stands alone in his opinion that "the same frame-
work is appropriate for all industrial concerns, of whatever kind,
employing the same number of people."16
Miss Follett's opinion was that too much distinction was made in
the business world between various functions, responsibilities, and
loyalties. She thought there was too much taking of sides. She wrote:
It seems to me that the first test of business administration,
of industrial organization, should be whether you have a
business with all its parts so coordinated, so moving together
in their closely knit and adjusting activities, so linking,
interlocking, interrelating, that they make a working unit--
that is . what I have called a functional whole or integ-
Integrative unity is clearly an organizational concept in which every-
one in a group does what he can to facilitate attaining the objective
of the group. She thought it detrimental to segment functions too
much since this tends to discourage loyalties and responsibilities
beyond very limited areas.
Pluralistic responsibility is another of Miss Follett's principles
of organization: "Another task of organization is to join managerial
capacity of worker with managerial capacity of executive. Functional
authority, pluralistic responsibility, requires conference as its
method."l8 Additional organizational considerations discussed by Miss
Follett are presented in the following quotation:
Four fundamental principles of organization are: 1. Co-
ordination by direct contact of the responsible people
concerned. 2. Co-ordination in the early stages. 3. Co-
ordination as the reciprocal relating of all the factors
in a situation. h. Co-ordination as a continuing process.19
Organization offers a freedom from problems unobtainable otherwise;
freedom through organizational relations, not freedom from them should
be the objective of organizational activities.
Dale recommends what he calls a comparative approach to organi-
zation. This entails a structural examination of similar firms to
determine which organizational form is producing the best results from
the set of circumstances facing it. This would enable organizers to
draw conclusions which would not be generally applicable guides, but
they would do much more than many of the present observations in
helping managers solve problems.
Newman, Summer and Warren believe: "Two elements are invariably
present in organizing: dividing up the work into jobs, and at the same
time, making sure that these separate clusters of work are linked
together into a total team effort."20 Balance is thus an important
factor. Two other problems of organization that they see are those of
overcoming the limits to the effective span of supervision and inte-
grating organizing with the other phases of management.
The early theorists did not write on the nature of informal organi-
zation. It is not surprising because it was the latter 1930's before
this type of relationship was generally recognized to exist within
organizations. The traditional autocratic organizational practices
that prevailed in the early years ignored the problems involved with
informal organization because of the dependence of workers on employ-
ment. The lack of economic alternatives and the general acceptance by
workers of autocratic leadership as being proper contributed to the
power of the employer and his ability to overlook the various facets of
informal relationships. Present labor market conditions, however,
afford a sharp contrast to the conditions that existed during these
earlier times. Now the employee has more than one choice of employ-
ment available to him and the pressure of economic necessity does not
weight upon him as heavily as before. In addition, the ideas of
authority acceptance and participation have encouraged a rejection of
autocratic authority and forced managers to give consideration to the
various conditions of work to which their subordinates are subjected.
The modern writers all give attention to informal organization
and recognize their importance because of their influence on the formal
organization. They do not agree with the nature or extent of informal
organization but do generally agree there is need to consider it and
its uses. The features that were supported by all of the latter are
that informal organization fosters the communication of the organization
and it establishes stable patterns of behavior for the members of the
organization. Koontz and O'Donnell agree with Newman, Summer and
Warren that it imposes conformity within its group and that the group
can be of any type. Dale, along with Koontz and O'Donnell, believes
the nature of informal organization is such that it includes all group
relations that are not included in the formal organization chart. Dale
writes: "These deviations from the division of authority and responsi-
bility shown on the formal chart produce the informal organization."21
Koontz and O'Donnell think by fostering better communications each
person can function to make the group more effective. Desirable
patterns of behavior, resulting from informal organization, may enable
individuals to perform better within the group. Newman, Summer and
Warren think that a pattern of common attitudes tends to evolve and
that informal organization creates pressure on members to conform to
group standards. "Managers should realize that, in addition to such
standards of conduct, groups also provide many beliefs and values to the
individual."22 Conformity of one type or another is one of these
behavior patterns which promotes smooth group performance. It estab-
lishes patterns which promote smooth group performance. It establishes
patterns and, in many cases, serves to eliminate a variety of frictions
that would otherwise develop within the group. It may, of course, have
the reverse effect and thereby lead to disorganization.
Dale thinks that whether informal organization is bad depends on
the group's performance and the relationship of the informal organi-
zation to this performance. Informal relationships may aid or hinder
the normal operations of the group; if they do not work at cross-
purposes to the formal organization they may be unimportant. Newman,
Summer and Warren believe that small social groups have a significant
effect on the workings of a formal organization. Small social groups
form spontaneously and occur almost everywhere. They exist on common
interests and exchange of ideas; leadership emerges naturally.
Dale is of the opinion that informal organization has no stability-
it is constantly changing. It deals with group relationships which can
be changed but cannot be eliminated. Because informal organization
tends to be of a changing nature, it cannot very well be incorporated
into formal organization. In contrast to this view, Newman, Summer and
Warren think harmonizing formal and informal organization is necessity
and can be attempted by adopting the group practices into the formal
organization. Another attempt at this can be made by structuring
formal organization to encourage informal groups that are inclined to
support the formal organization objectives.
Dale's view that informal organization is continually changing
leads him to conclude that it is impractical to attempt to do anything
significant with it. Although the negative aspocts should bn minimize'd
and the positive maximized, he thinks it is impractical to attempt to
incorporate parts of it into the formal organization. On the other
hand Newman, Summer and Warren think it desirable to try to incorporate
some informal group practices into the formal organization. Koontz and
O'Donnell recognize that it can be used to facilitate the easy flow of
communications and that it enables individuals to function better within
the limits of the formal organization and that it should thus be used,
if not encouraged.
Span of Management
The extent of effective supervision by a manager of his subordi-
nates is a problem that has received considerable attention in recent
years. It is a problem of significant importance to a firm because it
deals with the rather crucial personal relationship that exists between
a supervisor and a supervisee. The personal superior-subordinate
relationship serves as the basis for communications, control, and the
creation of a favorable atmosphere for effective execution of both
work and management activities. The extent of the span of management
appears to be directly related to the quality of the superior-
Unlike current writers, none of the early theorists devote atten-
tion to the problem of span of management. The lack of attention to the
span of management is probably due to the nature of early business
environments and the characteristics of the businesses themselves. In
the early stages of industrial development, most firms were small and
created only limited problems of supervision. These firms were also
single-product firms with rather standard production processes which
make for relatively easy supervision. The production processes them-
selves were usually simple in form and, as such, were relatively easy
to supervise. The current writers all recognize the existence of a
practical limit to the extent of the span and agree there is no given
number of subordinates that is best for all cases. The extent of the
span is dependent on a number of circumstances in the situation, such
as the time and energy limitations of the supervisor, the nature of the
work supervised, etc. Dale expressed a preference for a wide span of
control on the grounds that the loss of supervisory efficiency was
compensated for by an improvement in the communications it made
Koontz and O'Donnell feel that it is necessary to consider the
extent of the span in every organization. They think a wide variety of
practices exist, and, because of the varying circumstances that prevail,
there is no given number that is ideal in all cases. The major reasons
for the wide variety of practices are simply that organizations differ
so greatly in their structure and that a great difference exists within
the various levels of any given organization.
Dale also agrees with the basic concept of a maximum span of con-
trol but fails to specify a particular number, which should and does
vary with the situation. He seems to favor a wide span for two reasons:
in one case it makes possible a shorter chain of command and in the
other it prevents too close supervision.23 Freedom from close super-
vision encourages subordinates to stand on their own feet and use their
own initiative, enabling them to develop their capabilities more fully.
Newman, Summer and Warren agree that there are limits to the
number of subordinates that can be supervised effectively by a single
manager but acknowledge there is little agreement about how many.
Leadership may become ineffective if the span is too wide. Each leader
has limited time and energy, both of which are necessary for effective
supervision. But they believe: "Since many of us may exhaust our
nervous energy and alertness before we exhaust the time we are willing
to devote to supervision, the effective limit on our ability is energy
rather than time."21
Agreement was established by the contemporary theorists that the
span of management is determined by the nature of the situation,
including the type of supervision required and the individual ability of
the supervisor involved. In addition Koontz and O'Donnell stress the
importance of the type of supervision and what it entails. Dale, with
Newman, Summer and Warren, put emphasis on the ability of the executive
and the supervisory restrictions this places on him. Dale in addition
points out that the ability of the manager to learn and evaluate what
is happening is a very real determinant of the maximum span of manage-
ment. All of these seem to focus attention on the supervisor and his
personal capabilities as the most significant determinant of the size
of the span of management.
According to Koontz and O'Donnell, the factors which determine the
proper span of management are: (1) subordinate training, (2) delegation
of authority, (3) planning, (l) rate of change, (5) use of objective
standards, (6) communications techniques, and (7) amount of personal
contact.25 Dale thinks it desirable to control the number of subordi-
nates subject to a single span of control, but that the span may vary
with individual supervisors and with the nature of the work. In
diagnosing the ills of an organization, the span of each top executive
especially should be examined to see that it is expanded . to the
point where they no longer have time to learn what is actually being
done to provide the necessary direction or to evaluate what is actually
happening."126 The extent to which these conditions can be maintained
would seem to be Dale's idea of the determining factors for an executive
span of management.
Newman, Summer and Warren maintain it is important for a firm to
set upper and lower limits of acceptable spans for each administrative
position in its structure. They believe that one of the most important
determinants is the personal energy of an executive but that other
factors are also important. These other considerations are: (1) time
devoted to supervision, (2) variety and importance of activities being
supervised, (3) repetitiveness of activities, (i) ability of subordi-
nates, (5) degree of decentralization, (6) staff assistance provided.27
It would thus seem that the span of supervision should be tailored to
the right size for each executive position.
The concept of departmentation refers to the grouping of activities
within a given organization. It has a more inclusive meaning than the
formation of departmental groups and includes groupings at all levels of
the organization for any purpose regardless of their manner of identifi-
cation. As an activity of management, it establishes relationships
within and between departments or groups to aid efficient operation.
The aspects of departmentation which will be examined are the criteria
used and the reasons for departmentation.
Miss Follett did not discuss the subject of departmentation nor the
bases for its establishment. The other theorists did take up the topic
and found common ground in the causes for the grouping of activities.
They all agreed that the need for departmentation was, therefore,
function and process. All of the theorists saw departmentation in a
slightly different light. Fayol commented on the causes of depart-
mentation, Sheldon on the basis for division, and Miss Follett on the
essential relationship that exists between parts and the whole which
they constitute. The current authors agree that traditional work
division may be used profitably. Koontz and O'Donnell think, in
addition, that at lower organizational levels there are good reasons
for preferring the functional division of departments. Newman, Summer
and Warren think there are few rules to follow in establishing depart-
ments but that identification and accommodation of the essential factors
of a situation is the best approach to this problem.
That departmentation resulted from specialization was about as far
as Fayol went with the subject. He wrote that "specialization belongs
to the natural order . it is observable in human societies where
the more important the body corporate the closer is the relationship
between structure and function."28 Specific criteria were not dis-
cussed, but he pointed out the importance of a clear demarcation
between departments in order to avoid the problem of dual command.
Sheldon noted that departmentation could be based on function where
the organization precedes from managers to workers according to the
basic functions of production and without regard to the processes used.
Another basis for departmentation is the principle of decentralization
in which work is divided according to thinking and doing or advising
and executing. Dale also stressed the functional base of organization,
especially the three he considered the basic functions of finance,
marketing, and production. He believes that the mechanics of organi-
zation are derived from what the organization is trying to do--its
objectives--and that this necessitates consideration of what work must
be performed and which of these jobs can best be coordinated at the
same place or by the same person.
The basis for departmentation discussed by Koontz and O'Donnell
includes departmentation by simple number, enterprise function, terri-
tory, product, customer groups, and by process or equipment employed.
In their opinion,
.the process of selection involves a consideration of the
relative advantages of each type at each level in the organi-
zation structure. In all cases the central question concerns
the type of coordination that the manager wishes to achieve.29
Although they think it is hard to generalize for all levels of organi-
zations, in primary departmentation there are strong claims for the use
of the functional base as it very closely conforms to enterprise
Newman, Summer and Warren include in departmentation criteria the
bases of geographic, product, customer, and function for dividing work.
They include in the functional method work that can be divided accord-
ing to (1) a distinct guide of work, (2) any essential step in a total
business process, (3) any aspects of operations or management that
typically calls for technical knowledge or skill.30 They think that
the manner of dividing the work of an organization depends on the view
taken of it; this view can be from the top management downward, from
the individual operations upward, or following the flow of work through-
out the organization.
Miss Follett did not discuss departmentation of an organization
but did point out the importance of relationships of parts toward each
other in determining the character of the whole. In Miss Follett's
opinion, "they all together make a certain situation, but they
constitute that situation through their relation to one another. If
you change one, usually some, if not all, of the others are changed."31
This is a reality that needs consideration in all attempts to group
work and people.
In regard to identifying the reasons for departmentation, all but
Miss Follett made some observations. Most of them agreed that depart-
mentation results from a need for specialization which in turn creates
a need for coordination, although this need is present to an extent
even in the absence of specialization and is related to the size of
operations. Associated with this is the idea that departmentation is
the means for facilitating the growth of an organization, in that it is
a way to circumvent the limitation of the span of management. Newman,
Summer and Warren believe stress on team work and the need to expand
job scope, have, to some extent, offset the influence of specialization
on the nature of departmentation.
Fayol wrote that departmentation of function produces speciali-
zation of work which avoids continual changing of tasks by workers and
the disruptive adaptations which this require. Grouping skills together
to meet special needs is another advantage produced by it. Fayol
each change of work brings in its train an adaptation which
reduces output. Division of work permits a reduction in the
number of objects to which attention and effort must be
directed and has been recognized as the best means of making
use of individuals and of groups of people."
Sheldon's thought that departmentation is based on processes rather
than functions has the advantage of concentrating all functions under
one head and of offering the best chance to achieve effective
coordination. Although he recognized disadvantages, Sheldon saw a big
Functional organization has, however, one great initial
advantage--that the whole task of the business is grouped
into logical sections, thus leaving the supreme executive
free for the work of coordination alone.3
This should also facilitate growth by insuring the expansion capability
of the organization. The inability of managers to handle all of the
functions in a business organization is the major limitation of this
form of work division.
Koontz and O'Donnell write: "Departmentation is not an end in
itself but is simply a method of arranging activities to facilitate the
accomplishment of the enterprise objective."3h They think the need for
departmontation is the result of a limited span of management and a
desire for specialization. Through the use of departmentation it be-
comes possible to expand an organizational structure almost indefi-
nitely. Dale, on the other hand, does not discuss departmentation as a
separate or distinct topic but does discuss the problems of a functional
type of organizational structure. Most problems are those growing out
of the need for both specialization and coordination, and he thinks the
former is the most significant cause of departmentation.
Newman, Summer and Warren believe that, in the first half of this
century, the functional basis of work division predominated because of
the stress placed on specialization. Two developments in recent years
have tended to reduce the emphasis on functionalization of organi-
zations. One of these is the greater emphasis placed on team work. The
second development is at the operating level where it has been dis-
covered that a greater variety of activities increases the productivity
of workers. In regards to the manner in which a firm should be
organized, they offer no concrete guides:
.there is no magic formula for dividing up operating
work. Whether he likes it or not, the manager of tomorrow
will need to give original thought to how he ought to divide
among his subordinates the particular activities under his
Adapting a firm to changing conditions in a dynamic economy necessitates
giving attention to the structure of departments and to their modifi-
Assignment of Activities
Given a need and criteria for departmentation, there still remains
the task of assigning activities within the organizational framework.
Having determined the type of departmentation is only part of the
problems it is then necessary to decide where to place each job or
piece of work. There is a problem of identifying and classifying work
activities and of determining the other activities with which it could
be associated. Two aspects of the whole problem are examined--that of
combining activities, and the guides for use in their assignment.
Only Koontz and O'Donnell offer suggestions about the process of
combining activities within the firm. They believe that, in combining
activities, the first step is to recognize and identify all activities.
One approach to doing this is to view the firm in terms of the employee
skills required to achieve firm objectives; this requires analyzing the
activities of people when performing their tasks. The other is to
define the enterprise purpose and then "enumerate activities that make
a net positive contribution to the production, sale, and finance
functions."6 They prefer this second procedure because it can be used
by both old and new firms.
Three theorists did not offer any suggestions pertaining to guides
to follow when assigning activities; these were Fayol, Miss Follett, and
Dale. The others made comments on this subject and indicated agreement
about some guides which include grouping according to like function,
interlocking work, coordination, executive interest, and control. All
the theorists discussing work assignment guides gave a group of
essential factors to be considered in problems of this type. These
factors are expressed in different terms, but, for the most part, they
are quite similar in their intent. This is especially true for Koontz
and O'Donnell and Sheldon. Newman, Summer and Warren list factors that
are more general than the ones discussed by the others.
Sheldon discussed the division of work primarily on a functional
basis but also presented some requirements for an ideal organization
stating that their application should be local consideration. Some
of these requirements seem applicable to the assignment of activities.
The features he included that can be considered guides to assignment of
activities are such things as scientific analysis of work, grouping
like functions, interlocking work and facility, coordination, and using
committees and staff to supplement executive management. Not all of
these are directly applicable to the assignment of activities, but most
are clearly guides to the performance of this operation.
Koontz and O'Donnell distinguish two types of activities that
should be associated when assigning work; they are tasks that are
similar and tasks that are intimately associated with each other. The
latter include diverse activities that are closely related because of a
mutual contribution to objectives, and can be identified by the follow-
ing guides: where the activity is most used, executive interest,
stimulation or suppression of competition, policy control, impossibility
of separation, necessity for coordination, need to separate for control
purposes, and where there is a functional interest in the activities.38
Newman, Summer and Warren believe there are key factors in almost
every problem of activity assignment, the identification and utili-
zation of which facilitate the placement of work for effective
performance. These key factors which they discuss are: take advantage
of specialization, facilitate control, aid coordination, secure ade-
quate attention, reduce expenses, recognize human considerations.39
Line and Staff Relationships
Line and staff is a special, though generally used, form of organi-
zation which creates a large variety of organizational problems. The
way in which the staff is related to the line reflects the problems
that the organization considers most significant, because the two are
related for the purpose of solving problems. The nature of staff
relationships, functional authority, and the limitations restricting
the use of staff are the management problems to be examined within this
Nature of Staff Relationships
With the exception of Miss Follett who is silent on the matter,
all the theorists agree that staff assistance is necessary to a firm of
any size. They also agree that a staff can be established to perform
nearly any service needed by management. These services are needed
to assist with carrying out essential duties of management because of
the limitations of the line management personnel. Staff activities
are intended to increase the efficiency of operations, but staff men
must rely on persuasion and cooperation to implement their services.
The staff should serve the line in an advisory and supplementary
Sheldon maintained the difference between line and staff to be
that of doing and thinking, but Koontz and O'Donnell think this
distinction inadequate. They think it is the presence or absence of
authority that divides them. Even where functional authority is
delegated to the staff, it is still held to be only a partial authority
subject to strict limitations. Additional staff features identified
by more than one theorist include extending managerial personality,
discovering improvements, necessitating cooperation, functioning in a
non-executive capacity, and possessing no authority.
A staff performs duties that must be done in a business and, as
such, is not something that can be eliminated as nonessential. Fayol
Staff work falls into four categories. (1) Diverse assistance
afforded to the manager in current matters, correspondence,
interviews, consideration, and preparation of records.
(2) Liason and control. (3) Future projects, either drawing
up plans or bringing them into line. (4) Development study.h0
He thought the usual situation was that the last two of these were
badly neglected in most businesses.
In Sheldon's opinion the need for a staff is based on the inabi-
lity of managers to do all they need to do. "The presumption is that
the executive manager . cannot have time or opportunity for the
investigation, analysis, coordination of information, and constructive
thinking which are necessary for progress. A staff is thus
instituted to give aid. Koontz and O'Donnell stress the staff's lack
of authority and their need to work for and through the line executives
who have the authority. For them, it is necessary that,
superiorr and subordinate alike must know whether they are
acting in a staff or line capacity. If in a staff capacity,
their job is to advise and not command, and their line
superiors must make the decisions and issue the instructions
through the scalar chain.h2
Dale gives support to the concept of staff assistance with the
essential management duties in his statement that
the line organization is made up of those whose work
contributes directly to the fundamental goal . staff
officers are those who provide supplies, transportation, and
other auxiliary services necessary, and those who work on
Newman, Summer and Warren also view the staff as a special way of
dividing up managerial work. As far as the composition of staff duties
is concerned, they say: "Staff work is that part of managerial work
that an executive assigns to someone outside the chain of command."14
Utilization of a staff is one of the ways an executive can relieve him-
self of some of his administrative burden.
The concept of the use of staff as a means to extend the manager's
personality is evident in Fayol's view that [the staff is a group of
men equipped with the strength, knowledge, and time which the general
manager may lack, and is an adjunct, reinforcement and sort of extension
of the manager's personality." This idea of management extension is
further supported by Newman, Summer and Warren who identified it as one
of the features of successful staff relationships:
(1) A staff man is primarily a representative of his boss.
(2) A staff man must rely largely on persuasion to get his
ideas put into effect. (3) A staff man must be prepared
submerge his own personality and his own desire for glory.6
The theorists had, in addition to these corron points of interest,
observed other features of line and staff relations that they thought
important. Fayol believed one of the major objectives of staff is to
discover improvements in the operation of the firm. To do this requires
close cooperation of executives with their staff at all levels of
management. Provision must be made for a staff to assist in the perfor-
mance of managerial duties in given areas where they provide service to
top management and serve as a reserve of physical and mental strength,
competence, and time for managers to draw upon at will.
Sheldon's opinion of line and staff was that the staff is advisory
and supplementary to the line, and in addition:
It is based upon a strict demarcation between thinking and
doing; between the actual execution of production, which is
the 'Line', and the business of analyzing, testing, comparing,
recording, making researches, cordinating information, and
advising, which is the 'Staff'.
The function of the staff is to find the best path to efficiency for the
firm, and the function of the line is to attain it. This follows from
what he considers to be a profound distinction between men--some have
minds of action and some have minds of thinkers.
Koontz and O'Donnell think the relationship of line and staff
reduces to a matter of authority delegation: "Line and staff are
distinguished by their authority relationship and not by grouping of
activities.u"h8 Contrary to Sheldon's view, they think the distinction
between acting and thinking is not valid for distinguishing between
the two, since staff officers often assist in carrying out line
Dale believes the need for utilization of staffs has grown out of
the use of large scale organizations, technological developments, and