Evolution of management- Classical Managment theory

Classical management theory

There are three well-established theories of classical management: Taylor's Theory of Scientific Management, Fayol’s Administrative Theory, Weber’s Theory of Bureaucracy.

Taylor's Theory of Scientific Managment(1900)
Taylor’s theory of scientific management aimed at, improving economic efficiency, especially labor productivity. Taylor had a simple view about, what motivated people at work, - money. He felt that, workers should get a, fair day's pay for a fair day's work, and that pay, should be linked to the amount produced. Therefore he introduced the, DIFFERENTIAL PIECE RATE SYSTEM, of paying wages to the workers.

Taylor's Differential Piece Rate Plan:

If Efficiency is greater than the defined Standard then workers should be paid 120 % of Normal Piece Rate.
If Efficiency is less than standard then workers should be paid 80% of Normal Piece Rate.

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Principles of Scientific Management.
Four Principles of Scientific Management are:

1.Time and motion study: - Study the way jobs are performed and find new ways to do them.

2.Teach, train and develop the workman with improved methods of doing work. Codify the new methods into rules.

3.Interest of employer & employees should be fully harmonized so as to secure mutually understanding relations between them.

4.Establish fair levels of performance and pay a premium for higher performance.

Practical Uses of Theories in our day to day life

Scientific management is present when workers assemble a McDonald’s hamburger or when a technical 

support representative answers a call under pressure from a 90/10 protocol (a set of procedures that 

requires 90 percent of all calls to be answered within 10 seconds and that 90 percent of all problems be 

resolved within 10 minutes of the customer’s first call). 

Administrative theory

The importance of the function of management was first recognized by French industrialist Henri Fayol in the early 1900s.

· Division of work or specialization This increases productivity in both technical and managerial work.
. Authority and responsibility These are imperative for an organizational member to accomplish the organizational objectives.
. Discipline Members of the organization should honour the objectives of the organization. They should also comply with the rules and regulations of the organization.

· Unity of command This means taking orders from and being responsible to only one superior.

· Unity of direction Members of the organization should jointly work toward the same goals.

· Subordination of individual interest to general interest The interest of the organization should not become subservient to individual interests or the interest of a group of employees.

· Remuneration of personnel This can be based on diverse factors such as time, job, piece rates, bonuses, profit-sharing or non-financial rewards.

· Centralization Management should use an appropriate blend of both centralization and de-centralization of authority and decision making.

· Scalar chain If two members who are on the same level of hierarchy have to work together to accomplish a project, they need not follow the hierarchy level, but can interact with each other on a 'gang plank' if acceptable to the higher officials.

· Order The organization has a place for everything and everyone who ought to be so engaged.

· Equity Fairness, justice and equity should prevail in the organization.

· Stability of tenure of personnel Job security improves performance. An employee requires some time to get used to new work and do it well.

· Initiative This should be encouraged and stimulated.

· Esprit de corps Pride, allegiance and a sense of belonging are essential for good performance. Union is strength.

Earlier thinkers on management followed learning by experience approach in developing theories of management. Learning principally is through empirical process and through analysis of the data collected through observation. Draw the principles of managment by looking at and anyalysing the jobs that all managers commonly do. This approach served as a starting point for pioneers on management science to verify the validity and improve the applicability of the principles and practices of management. Analysis of observd data is what constitute a case study. The observational method of case study helps arriving at logical conclusions about past experience and to test the same as standards for future events.
The German socialists, Max Weber followed the classical approach and developed his theory of Bureaucracy, which portrays the structure and design of organisation characterized by a hierarchy of authority, formalized rules and regulations that serve to guide the coordinated functioning of an organization.

 Classical Approach by Max Weber

1. Management of an organization is considered as a chain of inter-related functions. The study of the scope and features of these functions, the sequence through which these are performed and their inter-relationship leads one to draw principles of management suitable for universal application

2. Learning principles of management is done through the past experiences of actual practicing managers
3. As business environment consists of uniform cycles exhibiting an underlying unity of realities, functions and principles of management derived through process of empirical reasoning are suitable for universal application
4. Emerging new managers through formal education and case study can develop skill and competency in management concepts and practices
5. The classical approach also recognized the importance of economic efficiency and formal organizational structure as guiding pillars of management effectiveness.
6. Business activity is based on economic benefit. Organizations should therefore control economic incentives

Strengths of Classical Management Theory

Current management organization and structure can find much of its roots from the classical management theory. One of the main advantages of the classical management theory was to devise a methodology for how management should operate. Management principles devised during this period can be seen as a foundation for current management behavior today, such as serving as a force of authority and responsibility.

In addition, another benefit of the classical management theory is the focus on division of labor. By dividing labor, tasks could be completed more quickly and efficiently, thus allowing productivity to increase. Division of labor can be seen in many applications today, ranging from fast food restaurants to large production facilities. In addition, the classical management theory also gave rise to an autocratic leadership style, allowing employees to take direction and command from their managers.

Flaws of Classical Management Theory

The main weakness of the classical management theory arose from its tough, rigid structure. One of the main principles of the classical management theory is to increase productivity and efficiency; however, achieving these goals often came at the expense of creativity and human relations. Oftentimes, employers and theorists would focus on scientific, almost mechanical ways of increasing productivity. For example, managers would use assembly line methods and project management theories that focused on efficient division of tasks. However, employers ignored the relational aspect in employees, in the process of trying to predict and control human behavior. In fact, the human relations movement arose in response to the classical management theory, as a way to understand the role of human motivation in productivity.

Additional flaws of the classical management theory include a heavy reliance on prior experience. The theorists of this time only tested their assumptions with certain industries, such as manufacturing and other high production companies. However, in today’s environment, the rigid structure of classical management theory would not translate well in most companies. Many businesses realize the importance of improving employee motivation and behavior, and implement departments devoted solely to improving human relations.

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- Learn more at www.technofunc.com. Your online source for free professional tutorials.

- Learn more at www.technofunc.com. Your online source for free professional tutorials.