CLASSICAL MANAGEMENT THEORY

Classical management theory has the assumption that workers only have physical and financial needs.
Classical management do not take into cognizance the effect of social, esteem and behavioral needs.
However, it emphasize on the specialization on labor, undemocratic leadership and business decision
implication and profit increasing.

Classical management theory was introduce in the late 19 th century and it became widely known in the
20th century. It was finally recognize through the implementation of Henri Fayol’s research; bring
some equilibrium within it. He is saw as the pioneered or father of basic management, as we know
today. He makes his apparition with his book “General and Industrial Management” published in
1916.

The classical management theory is constitute with three sub-management theory. Mainly scientific
management theory (by Frederick Taylor), bureaucratic management theory by (Max Weber), and
finally Henri Fayol with administrative management theory.

Scientific management theory (SMT)

SMT is a management theory created by Frederick Taylor with his book, named “The Principal of
Scientific Management” published in 1909. His belief of management was based on the assumption
that employees were going to work harder if they are given financial reward. He made his debut as
laborer in a factory in America and rose up to the chief engineer post. He conducted many research
and experiment that would forge his management thesis during his time. He is known majorly for his
piece rate system that consist of working more and earning more.

He did also get some consequent criticism and through evolution of management,
many has abandon his theory as many said that his ideas, as he was too simplistic on
behalf that workers are motivated by money.

Advantages of scientific management theory

Workers may get reluctant to work, however the reward in concern remain a wage or a salary.
Simple organizational structure, providing manager better control over employees and prevent
diseconomies of scale.

Higher reward for better performance causes employees to opt for better efficiency and productivity.

Disadvantages of scientific management theory

Workers are not able to give their views or opinion towards business objectives .There is no creativity
or novelty within the business causing, market share to saturate.

Jealousy may arise between employees as if there is not a strict quality control system: based on the
piece rate workers may get pay more due to quantity rather than quality.

Piece rate system requires a lot of supervision, to reduce faulty product attaining customers.
The Taylorism’s assumption that workers are motivated by money or personal gain is false. He sees
workers like robot rather than human that deprive the individual hygiene factor(Hertzberg
MOTIVATION THEORY).

First-line managers are used to be authoritarian under the imposing concept of scientific management;
that result in a disruptive and rude atmosphere in workplace.

Workers are the organization’s lung, if they delay works or projects; the organization suffers.
Therefore, making evidence that classical management does not accommodate for workers welfare
and job satisfaction.

It has led to many strikes for employees rights due to exploitation of worker.

Bureaucratic management theory

Bureaucratic management theory developed by Max Weber, contained two important elements,
including structuring an organization into hierarchies and having clearly defined rules to help control
an organization and its members. His grand fame is due to his sociological
approach onto management with ideas like division of labor, formal structure,
and management by rules. He greatly make importance of meritocracy, and
wanted that the right person postulate to right job. Therefore, omitting
favoritism in perhaps in any kind of organization. Nowadays bureaucracy is the
foundation itself of government systems at each scale of the nationalized
organization or and private firms and industries. It has find his way evolve still
in the modernized world, and became the better ruling essential for more
complicated governance structure.

Advantages of bureaucracy management theory

Meritocracy- it create an atmosphere diligence and help evacuate fraud or corruption.

Division of labor- Mr. Max Weber is well known for bringing cell production in the manufacturing
industry that is broke production process into simple into simple section of department. Therefore,
production flow goes more quickly and worker get to specialize more, thus reducing error.

Formal structure- He define better system of ruling and controlling of an organization, this has permit
the respect of the government or non-government institution.

Disadvantages of bureaucracy management theory

Inequality-Management was at his rudeness and this cause industry to develop a domineering
behavior towards poor people. It did develop some sort of favoritism towards industry and cause so
much strike in the era of Industrial Revolution.
Boredom- The specialization that derives from Max Weber’s development of division of labor does
create a repeat production pattern and that causes labors to get tedious. Therefore, production process
get slow down.

Administrative management theory

The administrative theory was develop and introduce by Henri Fayol who did
bring a differential aspect of the management we know today. His book made
his way as best seller descript the 14 principle of management and five pillars
of management (planning, organizing, commanding, coordinating and controlling. He did propose
group work and functional department.

Advantages of administrative management theory

Equilibrium- His theory did bring equality in the classical management, he also put accent on the roles
of a manager, and responsibility of being in charge of a production process. Also, destroyed
suppression that Industries did have on workers, although equality was not at its apogee.
The five pillars of management- Determining the role of manager was in fact the best idea possible
and this systematically change the image management forever. This create more direction and clarity
for the organization.
Disadvantages of administrative management theory
Reliance on experiences- His theory was based on his experience. One-man experience is not
sufficient to give solution to several business matters. It needed a detailed and deep understanding and
refinery.
Neglect the production flow- His approach does create some sort direction but deprive employees to
have their own thoughts. Too implementing rules in the place of work can cause the employees to
neglect the real matter.

Neo-classical Organization Theory

The NEO-classical theory establishes on two basic aspect, that is the human condition and behavioral
needs. It is the deep roots of human resource management, as we know today. Although Henry Fayol
did bring balance to classical theory, still it did not focus on the individual liked Elton Mayo did .
Phycologist indeed saw the first theorist to incorporate human relations within industries to improve
the productivity level in aiming at satisfying the two parties (that is workers and managers). For
instance, before the implementation of neo-classical theory, they conducted
many research at Harvard University. Majorly, the experiments that has mostly
been used the Hawthorne effect. Elton Mayo and his partner researchers
investigated on informal and formal uses of communication, how relationship
could be simpler without neglecting the individual needs and influence behind
informal leadership.
Other credit due to the affinition of this management approach was the
contribution Mary Parker Follet describes as first women in his time stepping
into management.

Seen as the mother of modern management, a hero of the past, his views was
remarkable and make greater evidence after time. He did considerate the
motive “power with” rather than “power over”, this greatly help in resolving
conflicts with employees. His achievement in it was the direct contact,
reciprocal relationship and finally continuous process that coordination of the new technique or skills
learnt at work.

Advantages of Neo-classical organization theory

He emphasized on the importance for managers to develop the interviewing and listening skills.
Interpersonal roles in workplace, it include three basic skills that figure head, leader, and finally
liaison.
The delegation of certain work given to subordinate or worker, give them a certain importance,
therefore they become more confident and effective in their work. (THE SENSE OF CONTROL)
Disadvantages of Neo-classical organization theory
It mostly focus on the internal organization rather than the external side, which somehow could
directly influence the organization.
It assumes that the approach will suffice any organization in any kind of environment.
The Contingency Theory

Contingency theory is based on the assumption management effectiveness is dependent or contingent.

That is managers instantly adapt new way of managing for certain cases. The main concept behind the
contingency management theory is that no one management approach suits every organization. There
are several external and internal factors that will ultimately affect the chosen management approach.
The contingency theory identifies three variables that are likely to influence an organization’s
structure: the size of an organization, technology being employed, and style of leadership.

Fred Fiedler is the theorist behind the contingency management theory. Fiedler proposed that the traits
of a leader were directly related to how effectively he led. According to Fiedler’s theory, there’s a set
of leadership traits handy for every kind of situation. It means that a leader must be flexible enough to
adapt to the changing environment. The contingency management theory can be summed up as
follows:

 There is no one specific technique for managing an organization.

 A leader should be quick to identify the particular management style suitable for a particular
situation.
 The primary component of Fiedler’s contingency theory is LPC – the least preferred co-
worker scale. LPC is used to assess how well oriented a manager is.

The System Theory Management

Systems management offers an alternative approach to the planning and management of

organizations. The systems management theory proposes that businesses, like the human body,
consists of multiple components that work harmoniously so that the larger system can function
optimally. According to the theory, the success of an organization depends on several key elements:
synergy, interdependence, and interrelations between various subsystems.

Employees are one of the most important components of a company. Other elements crucial to the
success of a business are departments, workgroups, and business units. In practice, managers are
required to evaluate patterns and events in their companies so as to determine the best management
approach. This way, they are able to collaborate on different programs so that they can work as a
collective whole rather than as isolated units.

Theory X and Theory Y

Do you believe that every individual gets maximum satisfaction from the work they do? Or are you of
the opinion that some view work as a burden and only do it for the money? Such assumptions
influence how an organization is run. The assumptions also form the basis of Theory X and Theory Y.

Douglas McGregor is the theorist credited with developing these two contrasting concepts. More
specifically, these theories refer to two management styles: the authoritarian (Theory X) and
participative (Theory Y).

In an organization where team members show little passion for their work, leaders are likely to
employ the authoritarian style of management. But if employees demonstrate a willingness to learn
and are enthusiastic about what they do, their leader is likely to use participative management. The
management style that a manager adopts will influence just how well he can keep his team members
motivated.

Theory X holds a pessimistic view of employees in the sense that they cannot work in the absence of
incentives. Theory Y, on the other hand, holds an optimistic opinion of employees. The latter theory
proposes that employees and managers can achieve a collaborative and trust-based relationship.

Still, there are a couple of instances where Theory X can be applied. For instance, large corporations
that hire thousands of employees for routine work may find adopting this form of management ideal.