MANAGEMENT OF

BUSINESS
Topic : CLASSICAL
MANAGEMENT THEORY

D E F I N I T I O N O F M A N A G E M E N T:

Management takes place within

a structured organisational
setting with prescribed roles. It
is directed towards the
achievement of aims and
objectives through influencing
the efforts of others.

C L A S S I C A L M A N A G E M E N T T H E O RY

Emphasis on structure
Prescriptive about 'what is
good for the firm'
Practical manager (except
Weber,
sociologist)

HENRI FAYOL
1841 1925
French engineer who worked on
the mining industry
He proposed that there are five
primary functions in management :
planning, organizing, commanding,
coordinating and controlling

FAYO L P R O P O S E D 1 4 P R I N C I P L E S
OF MANAGEMENT
1)
2)
3)
4)
5)
6)

Specialization of labour
Authority
Discipline
Unity of command
Unity of direction
Subordination of individual
interest
7) Remuneration

8) Centralization
9) Scalar chain
10) Order
11) Equinity
12) Personal tenure
13) Initiative
14) Esprit de corps

ADVANTAGES
Fayol was the first person to actually give a
definition of management which is generally
familiar today namely 'forecast and plan, to
organise, to command, to co-ordinate and to
control'.
Fayol also gave much of the basic
terminology and concepts, which would be
elaborated upon by future researchers, such
as division of labour, scalar chain, unity of
command and centralization.

DISADVANTAGES
Fayol was describing the structure of
formal organizations.
Absence of attention to issues such as
individual versus general interest,
remuneration and equity suggest that
Fayol saw the employer as paternalistic
and by definition working in the
employee's interest.

Fayol does mention the issues relating to the

sensitivity of a patients needs, such as initiative and
'esprit de corps', he saw them as issues in the context
of rational organisational structure and not in terms
of adapting structures and changing people's
behaviour to achieve the best fit between the
organisation and its customers.
Many of these principles have been absorbed into
modern day organisations, but they were not designed
to cope with conditions of rapid change and issues of
employee participation in the decision making
process of organisations, such as are current today in
the early 21st century.

FREDRICK TAYLOR
1856-1915
American mechanical engineer
Taylors scientific management
or Taylorism promoted four
principles

TAY LO R S S C I E N T I F I C
M A N AG E M E N T P R I N C I P L E S
Rely upon work methods that are based on
scientific evidence
Commit to employee selection and training
based upon scientific criteria
Provide detailed instruction and supervision
of employee performance
Divide tasks equally between management
and employees

ADVANTAGES
its rational approach to the organisational
workenables tasks and procedures to be
measured with a considerable degree of
accuracy
improving work methods brought enormous
increases in productivity
it enabled employees to be paid by results and
to take advantage of incentive payments
it contributed to major improvements in
physical working conditions for employees

DISADVANTAGES
it led to increased fragmentation of work due
to its emphasis on divisional labour
it generated an economically based approach
to the motivation of employees by linking pay to
geared outputs
it put the planning and control of workplace
activities exclusively in the hands of the
managers
it ruled out any realistic bargaining about
wage rates since every job was measured and
rated 'scientifically'

MAX WEBER
1864-1920
German sociologist and the founder

of modern sociology
His bureaucratic management theory

followed Fredrick Taylors scientific

management concepts

WEBER PRESENTED THREE TYPES

O F L E G I T I M AT E A U T H O R I T Y:
Traditional authority
Charismatic authority
Rational-legal authority

T H E M A I N F E AT U R E S O F B U R E A U C RA C Y A C C O R D I N G T O
W E B E R Wor
E Rfunctions
E:
a continuous organisation
bounded by

rules
A hierarchal structure of offices
appointment to offices made on the grounds of
technical competence only
the separation of officials from the ownership of
the organisation
the authority was vested in the official positions
and not in the personalities that held these posts.
Rules, decisions and actions were formulated and
recorded in writing.

ADVANTAGES
Appointment, promotion and authority were
dependent on technical competence and
reinforced by written rules and procedures of
promoting those most able to manage rather
than those favoured to manage. We take a lot
of this for granted in the UK today. Anything
else is regarded as nepotism and corruption

The adoption of bureaucratic type of

management systems allow
organisations to grow into large
complex organised systems that are
focused towards formalised explicit
goals.
It cannot be stated strongly enough
that the Weber theory has the
advantage of being used as a 'gold
standard' on which to compare and
develop other modern theories

DISADVANTAGES
Tendency for organisations to
become procedure dominated rather
than goal dominated.
Rigid behaviour by senior managers
can lead to standardised services that
do not meet the needs of the client.
Rigid procedures and rules are
demotivating for the subordinates
that work in the organizations.

CONCLUSION
These three people all offered
important concepts in
understanding modern management
theories. Their performance driven
approaches served the needs of the
early years of the Industrial
Revolution. The post industrial
revolution era has witnessed the
new criteria of nurture social
factors that assist in cohesion as
well as task cohesion

GROUP MEMBERS
simren davi
Malicia ali
Clevern joesph
Brandon deoraj
Roshan maraj