Classical Management Theory 
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Classical Management Theory

Early Management Theories
Early Theories of Organizations emerged mainly for military and Catholic Church. The metaphor of the machine was dominant, where organizations are viewed as machines. Therefore, the organizational application was, since workers behave predictably (as machines do rarely deviate from the norm), management knows what to expect, and workers operating outside expectations are replaced.

Classical Management Theories
There are three well-established theories of classical management: Taylor's Theory of Scientific Management, Fayol's Administrative Theory, Weber's Theory of Bureaucracy. Although these schools, or theories, developed historical sequence, later ideas have not replaced earlier ones. Instead, each new school has tended to complement or coexist with previous ones.

?Taylor's Theory of Scientific Management, U.S.A

Frederick Taylor (1856-1915) "The Father of Scientific Management".
Scientific Management theory arose from the need to increase productivity in the U.S.A. especially, where skilled labor was in short supply at the beginning of the twentieth century. The only way to expand productivity was to raise the efficiency of workers.

Taylor devised four principles for scientific management theory, which were:
1. The development of a true science of management,
2. The scientific selection and training of workers,
3. Proper remuneration for fast and high-quality work
4. Equal division of work and responsibility between worker and manager

Limitations of The Theory of Scientific Management:
Although it maximized efficiency and productivity but its main limitation was ignoring human aspects of employment. This is manifested in the following:
? Some workers and unions opposed this theory because they feared that working harder or faster would exhaust whatever work was available, causing layoffs.
? Objection to the "speed up" conditions that placed undue pressures on employees to perform at faster levels, some managers exploited both workers and customers.
? Reducing worker's role to a rigid adherence to compulsory methods and procedures.
? The increased fragmentation of work due to its emphasis on divisional labor .
? Economically based approach to the motivation of employees .
? It put planning and control of workplace activities only in the hands of managers.
? No real bargaining about wage rates ( jobs were measured and rated ?scientifically').

? Fayol's Administrative Theory

Henri Fayol (1841-1925)
Henri Fayol is considered the founder of the classical management school because he was the first to systematize it. Fayol was like Taylor in his faith in scientific methods. However, Taylor was basically concerned with organizational functions, while Fayol was interested in the total organization and focused on management. Fayol insisted that management was a skill that could be taught once its underlying 14 principles were understood. To him, Managerial Objectives are : Planning, Organizing, Command, Coordination, and Control, and his tools for accomplishing these objectives were the following 14 principles.

Fourteen Principles of Management
? Division of work - limited set of tasks
? Authority and Responsibility - right to give orders
? Discipline - agreements and sanctions
? Unity of Command - only one supervisor
? Unity of Direction - one manager per set of activities
? Subordination of Individual Interest to General Interest
? Remuneration of Personnel - fair price for services
? Centralization - reduce importance of subordinate's role
? Scalar Chain - Fayol's bridge
? Order - effective and efficient operations
? Equity - kindliness and justice
? Stability of Tenure of Personnel - sufficient time for familiarity
? Initiative - managers should rely on workers' initiative
? Esprit de corps - "union is strength" "loyal members"

? Fayol was the first to give a definition of management namely ?forecast and plan, to organize, to command, to co-ordinate and to control'
? Fayol gave much of the basic terminology and concepts, such as division of labor, scalar chain, unity of command and centralization

? He was basically describing the structure of formal organization
? Absence of attention to issues such as individual verses general interest, remuneration and equity. He saw the employer as paternalistic and working in the employee's interest .
? Many of the principles were not designed to cope with conditions of rapid change and issues of employee participation in the decision making process of organizations.

? Weber's Theory of Bureaucracy

Max Weber (1864 ? 1920), Germany

Weber developed a theory of bureaucratic management that stressed the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority. Bureaucracy is the organization form of certain dominant characteristics such as: Rules, Specified sphere of competence, Hierarchy, Specialized Training, Workers do not own technology, No entitlement to "official position" by incumbent, Everything written down, Maintenance of "ideal type". We should not apply our negative connotations of the word bureaucracy to the term as Weber use it.

Three basic types of legitimate authority:
Acceptance of those in authority arose from different reasons, such as
Traditional Authority - past customs and personal loyalty
Charismatic Authority - the personal qualities and skills
Rational-legal Authority - rational application of rules or laws. Bureaucracy allows for the optimal form of authority - "rational authority"

? Appointment, promotion and authority were dependent on technical competence and reinforced by written rules of promoting employees entirely on the basis of merit.
? Adoption of bureaucratic management systems allow organizations to grow into large complex organized systems geared towards formalized explicit goals.
? Weber's theory can be used as a gold standard to develop other modern theories.
? Tendency for organizations to become procedure- dominated rather than goal dominated.
? Heavily formalized organizational roles suppress initiative and flexibility of the jobholders.
? Rigid behavior by senior managers can lead to standardized services that do not meet the needs of the client.
? Rigid procedures and rules are demotivating for the subordinates that work in the organizations.
? Exercise of control based on knowledge has led to the growth of experts whose opinions and attitudes may frequently clash with those of the more generalized managers and supervisors.

In general, all classical theories of management attempt to enhance management's ability to predict and control the behavior of their workers. They were distinguished by the strict control of workers, absolute chains of command, predictability of behavior, and unidirectional downward influence.

Challenge of the Classical Management theory
The behavioral school emerged partly because the classical management theories did not achieve sufficient production efficiency and workplace harmony. Several theorists tried to strengthen classical organization theory with the insights of social sciences.

Beginning to reconsider Taylor's incentive system as having too little motivational impact. Henry Gantt (1861-1919) came up with a new idea. Every worker who finished a day's assigned work load would win a 50-cent bonus. The supervisor would earn a bonus for each worker who reached the daily standard, plus an extra bonus if all the workers reached it. This, Gantt reasoned, would spur supervisors to train their workers to do a better job. Every worker's progress was rated publicly and recorded on individual bar charts. Gantt originated a charting system for production scheduling; the "Gantt chart" is still in use today.

Mary Parker Follett (1868-1933) introduced many new elements especially in the area of human relations and organizational structure. She was a great believer in the power of the group, where individuals could combine their diverse talents into something bigger. Moreover, Follett's "holistic" model of control took into account not just individuals and groups, but the effects of such environmental factors as politics, economics, and biology. By adding the organizational environment to her theory, it included a broader set of relationships, inside and outside the organization.

Chester Barnard's (1886-1961) central thesis was: An enterprise can operate efficiently and survive only when the organization's goals are kept in balance with the aims and needs of the individuals working for it. Barnard stressed the work of executive managers, he also focused on the role of the individual worker as "the basic strategic factor in organization." He emphasized the organization as the cooperative enterprise of individuals working together as groups.

Mayo and his colleagues pioneered the use of the scientific method in their studies of work environments. However, later "behavioral scientists" brought two new dimensions. First, they advanced a more sophisticated view of human beings and their drives. Second, behavioral scientists applied the methods of scientific investigation to the study of how people behaved in organizations as whole entities. According to Maslow, the needs that people are motivated to satisfy fall into a hierarchy. Physical and safety needs are at the bottom of the hierarchy, and at the top are ego needs and self-actualizing needs.

Some later behavioral scientists argue that the more realistic model of human motivation is "complex person." In this model, the effective manager is aware that no two people are alike and tailors motivational approaches according to individual needs. Moreover, theories can be culturally bounded. For example, in Sweden, quality of life is ranked most important, while in Japan security is ranked highest.

McGregor distinguished two assumptions that he called Theory X and Theory Y, for opposite views of people's commitment to work. Theory X managers, assume that people must be constantly coaxed into putting forth effort in their jobs. Theory Y managers, on the other hand, assume that people relish work and eagerly approach their work as an opportunity to develop their creative capacities.

Rise of Motivation Theories in late 1950's through 1980's
Late 40's & early 50's: clinical psychologists Carl Rogers' and Abraham Maslow's theories of motivation supported the human relations movement. Skinner initiated discussions of behaviorism's applications to organizational settings
1954 Peter F. Drucker outlined his Management by Objectives (MBO) approach 1954 John C. Flanigan outlined his Critical Incidents Technique
Late 1950's: Douglas McGregor proposed his Theory X and Theory Y assumptions of the relations between employees and organizations

Early 1960's: contingency models of leadership proposed a need for different styles under different circumstances, a view that rose with work of Fred Fiedler .
1964: Vroom's VIE theory (valence, instrumentality, expectancy) of motivation proposed influential
development of later expectancy theories
Mid 1960's: David McClelland proposed need for achievement theory. Argues there are two groups of people, the majority ( not concerned about achieving) and the minority (challenged by achieving).
Late 1960's: Frederick Herzberg proposed his two-factor theory of motivation (satisfiens/motivators & hygiene factors).
Late 1960's: Edwin Locke outlined his goal setting approach to motivation.
1964 Civil Rights Act passed. Title VII, states: "it is unlawful to discriminate in any employment practice on the basis of race, color, religion, sex, or national origin"
1966: Katz & Kahn published classic text outlining theory and research of organizational behavior as embedded in open, sociotechnical systems.

1960's into early 1970's: advances in job analysis techniques included:
- 'task inventory' approach developed from research with U.S. Air Force
- Dictionary of Occupational Titles published in 1965 (third edition)
- 1960's research at Purdue Occupational Research Center led to publication of the Position Analysis Questionnaire in 1972
- Edwin Fleishman developed 'ability requirements' approach
1971: B.F. Skinner advocated behavior modification strategies to motivate people in organizations. Organizational behavior modification's successes increasingly demonstrated (e.g., in Luthans & Kreitner's (1975) and Frederiksen's (1982) books).
- Rise of cognitive approaches to studying topics in psychology including their influence on a wide range of I/O research.
Early 1970's: Porter & Lawler proposed revised expectancy model of motivation
Early/mid 1970s: Civil rights laws, and related Supreme Court decisions, led to increasing research on bias in organizations

Early 1980's, rigidity of classical management theories produced harsh consequences for businesses during these times of rapid change in technological and business environments.
Mid 1980's: increasing attention to use of quality circles and other participatory management techniques
Late 1980's: renewed interest in organizational climate and groups
Late 1980's: rise of participatory management techniques known by such terms as
Total Quality Management (TQM), Continuous Quality Improvement (CQI).
1986: first ruling by U.S. Supreme Court on subject of sexual harassment
Late 1980's: work stress received increasing attention in I/O research, theory, and practice Balancing work and family lives received increasing attention.


- Organisation and Management of Health Care, April 2002, Version 2.0 , Main Contributor: Katie Enock, Public Health Specialist, Harrow Primary Care Trust
- Henri Rayol Industrial and General Administration, J.A.Caubrough, trans.(Geneva International Management Institute, 1930)
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