Classical School of Management Theories

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Different School of Management Theories : 1) Classical Theory : One of the first schools of management thought, the classical management theory, was developed during the age of Industrial Revolution during the period from 1900's to mid-1930. During this period the classical theories of organization began to emerge. This theory belief that employees have only economical and physical needs, and their social needs and job-satisfaction either don't exist or are unimportant. Accordingly, this school advocates high specialization of labor, centralized decision making, and profit maximization. This school of thought is made up of two branches : a) classical scientific and b) classical administrative, described as follows : a) Classical Scientific Theory : Frederick Taylor is called as the “father of scientific management. ” It is focused on the main work force involved directly with the production. This method emphasized to ensure productivity of the individual workers by : • Select workers with appropriate abilities for each job • Train workers to carry out the given job efficiently • Support workers by proper planning Provide wage incentive to the workers for increased output With this theory, Time And Motion Studies and Differential Piece Rate Methods are also used to increase the productivity. b) Classical Administrative Theory : Among all well-known contributors, Henry Fayol is called as the most notable contributor to this theory. Administrative theory focused on the total organization It is focused on the administrative aspects of management which directly or indirectly effect productivity of the organisation. He discussed 14 general principles of management. 1. Division of labor. Specialization of labour results in increased productivity. Both managerial and technical work are amenable to specialization. 2. Authority. Authority was defined by Fayol as the "right to give orders and the power to exact obedience". It is needed to carry out managerial responsibilities. 3. Discipline. Employees must respect the rules that govern the organization. 4. Unity of command. Employees should receive orders from only one superior. 5. Unity of direction. Each group of activities in an organization should be grouped together under one head and one plan. 6. Subordination of individual interests to the general interest The interests of one person should not be placed before the interests of the organization as a whole. 7. Remuneration. Compensation should be based on systematic attempt to reward good performance. 8. Centralization. The degree to which centralization or decentralization should be adopted depends on the specific organization, but managers should retain final responsibility to do the tasks successfully. . Scalar chain. A chain of authority should extend from the top to the bottom of the organization. This chain implements the unity-of-command principle and allows the orderly flow of information. 10. Order. Human and material resources must be in the right place at the right time. 11. Equity. Employees should be treated as equally as possible. 12. Stability of personnel. Successful firms usually had a stable group of employees. 13. Initiative. Employees should have the freedom to take initiative. 14. Esprit de corps. Managers should encourage a sense of unity of effort through harmony of interests. Limitations of Classical Theory : • Workers and unions began to oppose his approach because they feared that working harder or faster would exhaust whatever work was available Causing layoffs. • Critics objected to the speed up condition that placed undue pressure on employees to perform at faster and faster levels. • As a result more workers joined unions and thus reinforced a pattern of suspicious and mistrust that shaded labor relations.
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