Classical Management Theory is one of the well-established theories of managing a workplace, that emphasises on organising a workplace as a clearly defined structure with departmentalisation, division of work, and classifying the job into specialised tasks with monetary incentives. This theory was established during the industrial revolution, though some of its aspects can still be seen today since most of today’s management practices originate from it.
This article explores the definition of classical approach to management, classifies it into main approaches, and describes advantages and disadvantages of the theory.
“Classical Management Theory refers to a theory that explains the management of organisations in the structural context of the hierarchical systems."
The main objective is to have a high level of productivity and organisational capacity to achieve the project goals, follow formal procedures, and specific guidelines. Here the role of management refers to an authoritative figure that is charged with the responsibility of planning, organising and overseeing a workforce in order to achieve the organisational goals and objectives.
Classical theory of organisation revolves around three main concepts: Hierarchical Structure, Specialisation, and Incentives. All the concepts remain central in increasing organisational productivity and directing the employees’ activities towards the achievement of the organisation objectives.
Classical theory suggests that the organisation should operate on a strict top to bottom chain of command, where the decisions are made at the top hierarchy level. This structure provides clarity as to each worker’s responsibilities and prevents overlapping and confusion. With centralised decision-making, superiors dominate their subordinates to ensure order and efficiency. From this setup, the tendency for a stable well-ordered environment that would foster productivity is promoted.
Classical approach of management supports employees’ specialisation according to the tasks. Such division of work helps people become more skilled, accurate and effective. Thus, by encouraging staff specialisation, the organisation gains high levels of performance and organisational effectiveness.
The classical approach deals with the rewards of employees that are given under the assumption that money is the key motivator to their performance. Organisations benefit majorly by giving bonuses, which results in increased productivity and performance. This emphasis on incentives ensures that elements of employees’ remunerative motivations relate with organisational objectives, drives competition and productivity in the workplace.
There are three main types of classical theory:
First introduced by Frederick Taylor, scientific management aims at improving workers productivity by studying the amount of work a worker is able to accomplish in one day, standardisation of various tasks and close monitoring. Taylor’s approach aimed at bringing efficiency in performance by finding out the best methods of doing work.
This branch, in line with Henri Fayol’s way of thinking shifts the organisational focus to the function of managers within administrative processes as well as the enhancing of organisational goals. Organisation of work according to Fayol can be still effectively applied in today’s organisations to establish clear and structured work environments, division of work, unity of command, discipline.
Bureaucratic management was developed by Max Weber, a German sociologist, which works on principles of formal procedures, policies and hierarchy. In bureaucratic management, the hierarchy establishment and successful implementation of rational procedures prevent the employees’ biases in decision-making.
Just like any other theories, classical management perspective also has its strengths and demerits. Awareness of these aspects of the theory enables a manager to make use of the theory efficiently without getting too entangled in theoretical formulations.
Improved Efficiency: The encouragement of task specialisation and a hierarchical structure, results in high productivity, as employees are expected to do what they understand best.
Clear Organisational Structure: The hierarchical structure puts everyone in a specific rank, this helps in reducing confusion and improving communication.
Enhanced Accountability: Classical organisational structure, specifically the top-down approach, makes it easy to enforce accountability in an organisation because an employee’s actions are closely supervised and guided.
Motivation through Incentives: Financial gains help employees to work hard, which increases productivity and positively impacts the success of an organisation.
Lack of Flexibility: The organisation might suffer from low levels of flexibility and creativity due to classical theory's strict structure.
Limited Employee Satisfaction: By specialisation of work and putting emphasis on getting the job done fast, it is possible to have repetitive and uninteresting jobs which may demoralise the employees.
Excessive Bureaucracy: There are invariably obstructions in the form of procedures and rigidity in the bureaucratic structure which tends to stall decision-making and organisation direction.
Neglect of Human Aspects: The classical approach is mainly centred on efficiency and rationality while it pays little attention to the welfare of employees and their interactions.
The classical theory of management has had a profound effect on organisations in the manner through which they are managed. Classical organisational structure is a useful approach since it emphasises efficiency, productivity and work organisation hierarchy. However, it may lack adaptability, which is important in today’s volatile business environments.
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Who is the father of classical management theory?
The father of classical management theory is Henri Fayol, a French management theorist and the grandfather of the present-day classical theories who introduced 14 principles of management.
What is classical theory?
Classical theory in the management system can be described as an organised and well-planned management process of an organisation. To enhance the accomplishing of the organisational tasks, it fosters a definite chain of command, defined roles and task distinctiveness.
What are the four principles of classical theory?
The four key principles of classical theory are:
Division of Labour: Division of tasks in order to work with greater speed.
Authority and Responsibility: It is the power of managers to command while the duty of employees to obey.
Discipline: Ensuring that the required order within the organisation is enforced.
Unity of Command: Every employee has one direct superior, which makes the flow of instructions and the process of controlling the results much more effective.