What is Classical Theory of Management – Free Notes | PDF Download

There are different views of management and classical views of management or classical management theory is also one of them. Management has always remained a challenge for people.  Planning, organizing, recruiting, directing and controlling, etc everything comes under the Responsibilities of Manager. In early 90’s, when industrialization got boom, managers realized that there should be some scientific methods to increase productivity. Different managers provided their views to describe the classical viewpoint, which are also known as classical theory of management, such as scientific, bureaucratic and administrative, etc.


The Classical Theory is a traditional theory, wherein emphasis is more on the organization rather than the employees working therein. According to the classical theory, the organization is considered as a machine and the human beings as different components/parts of that machine.

Characteristics of Classical Theory

The classical theory has the following characteristics:

  1. This Theory is built on an accounting model.
  2. It lays emphasis on detecting errors and correcting them once they have been committed.
  3. It is more concerned with the amount of output than the human beings.
  4. The human beings are considered to be relatively homogeneous and unmodifiable. Thus, labor is not divided on the basis of different kinds of jobs to be performed in an organization.
  5. It is assumed that employees are relatively stable in terms of the change, in an organization.
  6. It is assumed that the authority and control should be vested with the central authority only, in order to have a centralized and integrated system.

Components of Classical Theory of Management

1. Scientific Management Theory:

Scientific management is also called Taylorism. It emphasized detailed, precise planning of work to achieve efficiency, standardisation, specialisation, and simplification. It relied on formal top-down budgeting which led to a centralised control system.

Scientific techniques of management were employed for the management of physical resources rather than for human resources. Primary emphasis was on the planning and control functions related to performance of basic tasks.

It was assumed that normal economic incentives were enough for implementation of plans and policies. It aimed at improving the efficiency of human work but it considered human being as a rational economic man who can act just like a machine.

Scientific management assumed that industrial efficiency can be improved through the application of the methods of science and the payment of high wages for higher productivity. It advocated that standardization of working conditions, work methods, time study, motion study, standardisation of work, planning of daily tasks, etc., can promote industrial efficiency.

Taylor emphasised five concepts on which management theory and practice could be based:

(1) Research,

(2) Standards,

(3) Planning,

(4) Control and

(5) Co-operation.

F. B. and Lillian M. Gilbreth made pioneering efforts in the field of motion study and they laid the entire foundation of our modern applications of job simplification, meaningful work standards, and incentive wage plans.

Mrs. Gilbreth had a unique background in psychology and management and the couple could embark on a quest for better work methods. F. Gilbreth is regarded as the father of motion study. Taylor (a stopwatch man) and Gilbreth (a motion-study man) both are responsible for inculcating in the minds of managers the questioning frame of mind and the search for a better way of doing things.

Henry L. Gantt, an Urdent advocate of scientific management, made four important contributions to the concepts of management:

(1) Gantt Chart to compare actual to planned performance,

(2) Task-and-bonus plan for remunerating workers! indicating a more humanitarian approach,

(3) Psychology of employee relations indicating management responsibility to teach and train workers,

(4) Emphasis on service rather than on profits. Gantt’s contributions were more in the nature of refinements rather than fundamental concepts. They made scientific management more humanized and meaningful to devotees of Taylor. If we take a broad view of Taylorism the contributions of Taylor and his followers were truly outstanding and many features have proved to be enduring.

The essence of the positive view of scientific management was described by Taylor as follows:

Science, not rule of thumb.

Harmony, not discord.

Co-operation, not individualism.

Maximum output in place of restricted output.

The development of each man to his greatest efficiency and prosperity.

Integration of scientific management, human relations movement and Fayol’s administrative theory can give us a broader and sounder base for organisation and management.

2. Bureaucratic Model:

The second pillar or thread in the classical organisation and management theory was provided by Max Weber, a German sociologist, and his bureaucratic model. He viewed bureaucracy as the most efficient form for complex organisation.

His model of bureaucracy included:

(1) Hierarchy of authority,

(2) Division of labour based upon functional specialisation,

(3) A system of rules,

(4) Impersonality of interpersonal relationships,

(5) A system of work procedures,

(6) Placement of employees based upon technical competence, and

(7) Legal authority and power. Bureaucracy is preferred where change is not anticipated or where rate of change can be predicted. It is usual in government departments and in many large businesses.

Bureaucracy provided a rigid machine model of an organisation. It could not account for important human elements.

Rigidity, impersonality, higher cost of controls, anxiety due to pressure of conformity to rules and procedures (creating insecurity, frustration and dependence on the superior), tendency to forget ultimate goals of the organisation, self-perpetuation and empire building, are the glaring disadvantages of bureaucracy.

Above all, bureaucracy cannot offer satisfaction of higher level wants of employees and to that extent there is limited scope for management development.

3. Administrative Theory:

Administrative theory is the third pillar or component of classical theory of organisation and management. During the first half of the twentieth century a body of knowledge termed as administrative management theory was developed.

Henry Fayol was its most important exponent. The pattern of management was established by Henry Fayol. The pyramidal form, scalar principle, unity of command, exception principle, span of control, and departmentalisation are some of the important concepts set forth by H. Fayol and his followers such as Mooney and Reiley, H. Simon, L. F. Urwick, L. Gullick.

Elements of administrative theory include:

(1) Principles of management (given by Fayol),

(2) Concepts of line and staff,

(3) Committees,

(4) Functions of management (Guilick coined them as ‘POSDCORB’, i.e., planning, organising, staffing, directing, coordinating, reporting and budgeting. Social scientists described administrative theory as an ideal bureaucracy.

It places heavy emphasis on the power and authority structure of an organisation. It enjoys all the advantages of bureaucracy. It also suffers from its disadvantages. It is institutionally power-centred and cannot give greater scope for individualism. Hence, it cannot provide democratic organisations. Administrative theory is a way to achieve bureaucracy. If you desire bureaucracy, administrative theory will also be valued.

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