Classical Management Theory

1. Classical Management Theory The work of Fayol and Weber

2. Henri Fayol Identified 6 management activities: • Forecasting • Planning • Organising • Commanding • Co-ordinating • Controlling

3. 6 Managerial activities • Forecasting – predicting what will happen in the future • Planning – devising a course of action to meet expected demand • Organising – Allocating resources then allocating separate tasks by department, unit and individual • Commanding – directing or motivating • Co-ordinating – ensuring synergy between activities and resources • Controlling – monitoring progress

4. 14 Principles of management • Specialisation/division of work • Authority with responsibility • Discipline • Unity of command • Unity of direction • Subordination of individual interests • Remuneration • Centralisation • Chain/line of authority • Order • Equity • Lifetime jobs for good workers • Initiative • Espirit de Corp

5. Principles of management • Division of labour – repetition of the same function brings speed and efficiency • Authority with responsibility – the right to give orders and the power to exact obedience • Discipline – obedience, application, behaviour & respect • Unity of command – an employee should receive orders from only one person

6. Principles of management • Unity of direction – having the same direction/objective • Subordination of individual interests – no conflict between personal ambition and the well being of the organisation as a whole • Remuneration – a fair days work for a fair days work • Centralisation – elements of it must be present

7. Principles of management • Line of authority - line management • Order - a place for everyone and everyone in his place • Equity – employees must be treated equally and fairly • Stability of tenure – employees need a degree of stability in their job to deliver their best

8. Principles of management • Initiative – being allowed to think through a problem and implement a solution • Espirit de corps – dividing enemy forces to weaken them is clever, but dividing one’s own team is a sin against the business

9. Similarities with F W Taylor • Taylor (1911) - focus on work methods, measurement and simplification to gain efficiency • Fayol (1916) – principles of management and work organisation • Both identify ‘one best way of working’ developed from experience

10. Criticisms of Classical Management Theory • Based on personal knowledge and experience • Proposed a single, standardised organisational model as the optimum one • Promoted a mechanistic organisation which stressed discipline, command and order • It neglected conflict management, decision-making and communication • It underestimated the complexity of organisations • Lack of concern with the interaction between people • Misunderstood how people thought

11. Max Weber • German sociologist • Studied – power and authority • Bureaucracy was the most efficient form of social organisation • His work complements that of F W Taylor

12. Authority • Traditional - the ruler has a natural right to rule, either God given or by descent • Charismatic – the ruler has some special, unique virtue • Legitimate – based on formal, written rules which have the force of law

13. Bureaucracy Based on legitimate authority The clear definition of tasks and responsibilities leads to a permanent administration and standardisation of work procedures Based on ‘order’ and ‘rationality’

14. Main characteristics • Official duties • Division of labour/specialisation • Hierarchy of authority • Uniformity of decisions and actions • Rules and regulations • Impersonal orientation – rational judgments • Employment based on technical qualifications

15. Strengths of the bureaucracy • Standardisation • Employee behaviour – controlled and predictable • Little time is spent on decision making • Routine administration

16. Criticisms of bureaucracies • Over-emphasis on rules, procedures, record keeping and paperwork • Difficulty in adapting to changing circumstances • Position and responsibilities can lead to officious behaviour • Result in mindless, unquestioning bureaucracy • Can have a dehumanising effect on individuals • Can stifle creativity and innovation

17. Chris Agyris (1964) Bureaucracies restrict the psychological growth of the individual and cause feelings of failure, frustration and conflict

18. Public Sector organisations • Demand uniformity of treatment, regularity of procedures and accountability for their operations • Specified rules and regulations limit the degree of discretion exercised by management • Detailed record keeping • Necessary functions run on a consistent and fair basis

19. Summary • Procedures provide a standard way of dealing with employees, avoiding favouritism and personal bias • Everyone knows what the rules are and receives equal treatment • However, there can be frustration in having to follow seemingly illogical rules and experience delays

20. A final thought…….. Research in 1960 - 1970 The question changed from whether or not an organisation was a bureaucracy, to one that asked to what degree an organisation was ‘bureaucratised’