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Classical School of Management


 To explicate facts as to theories of classical school of Management

 To elucidate observations as to their characteristics

 To figure out distinction from neo-classical & modern schools


 Concept of Management - Management means organization and coordination of the activities
of an enterprise in accordance with certain policies and in achievement of clearly defined
objectives. 1

 Relevance of Discipline of Management - Management is often included as a factor of
production along with machines, materials, and money. According to the management guru
Peter Drucker (1909-2005), the basic task of a management is twofold: marketing and
innovation. 2

 Genesis of the Discipline of Management - Practice of modern management owes its
origin to the 16th century enquiry into low-efficiency and failures of certain enterprises,
conducted by the English statesman Sir Thomas More (1478-1535).3

 Table 1
Five Major Schools of Management Thought


Managing workers and organizations more
Scientific Management 1880s
Understanding human behavior in the organization.
Human Relations 1930s
Behavioral Science 1950s
QUANTITATIVE Increasing quality of managerial decision-making
SCHOOL through the application of mathematical and
Management Science 1940s statistical methods.
Management 1950s—
Information Systems 1970s
SYSTEMS SCHOOL 1950s Understanding the organization as a system that
transforms inputs into outputs while in constant
interaction with its' environment.
CONTINGENCY 1960s Applying management principles and processes as
SCHOOL dictated by the unique characteristics of each

Meaning of Schools of Management - The schools of management thought
are theoretical frameworks for the study of management. Each of the schools
of management thought are based on somewhat different assumptions about
human beings and the organizations for which they work.

 Emergence of Schools of Management - Since the formal study of management
began late in the 19th century, the study of management has progressed through several stages
as scholars and practitioners working in different eras focused on what they believed to be
important aspects of good management practice. Over time, management thinkers have sought

ways to organize and classify the voluminous information about management that has been
collected and disseminated. These attempts at classification have resulted in the identification
of management schools.

 Varied Schools of Management - Disagreement exists as to the exact number of
management schools. Different writers have identified as few as three and as many as
twelve schools. Majorly discussed schools are

- The classical school

- The behavioral school

- The quantitative or management science school

- The systems school &

- The contingency school.4

Each of the schools of management thought is based on somewhat different assumptions about
human beings and the organizations for which they work.


Early Theories of Organizations emerged mainly for military and Catholic Church. The
metaphor of the machine was dominant, where organizations are viewed as machines. Therefore,
the organizational application was, since workers behave predictably (as machines do rarely
deviate from the norm), management knows what to expect, and workers operating outside
expectations are replaced.



 Definition - Classical School of Management professes body of management thought
based on the belief that employees have only economical and physical needs, and that
social needs and need for job-satisfaction either don't exist or are unimportant.
Accordingly, it advocates high specialization of labor, centralized decision making, and
profit maximization. 5 The classical school looks for universal principles of operation in
the striving for economic efficiency. The organization works within itself and only within
itself. It emphasizes management separated from labor, and labor specialized down to the
smallest specialized tasks to which the most suitable (in each case) personnel are trained.
They need to be trained to nothing else.6

 Major Contributors - this school of management derives from the sociology of Weber,
the scientific management findings of Taylor, Gantt and Gilbreth, and the administration
perspective findings of Fayol, Urwick and Brech.

 Ambit - This school of thought is made up of two branches: classical scientific and
classical administrative and there are three well-established theories of classical

1. Taylor's Theory of Scientific Management,

2. Fayol's Administrative Theory,

3. Weber's Theory of Bureaucracy


Theory of Classical Scientific Management
Meaning - In its simplest form the theory is the belief that there is “one best way” to do a job and
scientific methods can be used to determine that “one best way”.

Distinctive nature - scientific management focused on the productivity of individuals & the
emphasis is on the development work methods.

Origin of Scientific Management Theory - Developed in the United States, mainly since about
1905 the theory of scientific management is the “brainchild” of Frederick Winslow Taylor.

[Frederick Taylor (1856-1915): U.S.A. - "The Father of Scientific Management"]

Major Contributors of Classical scientific school - The classical scientific school owes its
roots to several major contributors, including Frederick Taylor, Henry Gantt, and Frank and
Lillian Gilbretth.

1. Frederick Taylor is often called the “father of scientific management.”
Taylor believed that organizations should study tasks and develop precise
procedures. As an example, in 1898, Taylor calculated how much iron from
rail cars Bethlehem Steel plant workers could be unloading if they were using
the correct movements, tools, and steps. The result was an amazing 47.5 tons
per day instead of the mere 12.5 tons each worker had been averaging. In
addition, by redesigning the shovels the workers used, Taylor was able to
increase the length of work time and therefore decrease the number of people
shoveling from 500 to 140. Lastly, he developed an incentive system that paid

workers more money for meeting the new standard. Productivity at Bethlehem
Steel shot up overnight. As a result, many theorists followed Taylor's
philosophy when developing their own principles of management.

2. Henry Gantt, an associate of Taylor's, developed the Gantt chart, a bar graph
that measures planned and completed work along each stage of production.
Based on time instead of quantity, volume, or weight, this visual display chart
has been a widely used planning and control tool since its development in

3. Frank and Lillian Gilbreth, a husband-and-wife team, studied job motions.
In Frank's early career as an apprentice bricklayer, he was interested in
standardization and method study. He watched bricklayers and saw that some
workers were slow and inefficient, while others were very productive. He
discovered that each bricklayer used a different set of motions to lay bricks.
From his observations, Frank isolated the basic movements necessary to do
the job and eliminated unnecessary motions. Workers using these movements
raised their output from 1,000 to 2,700 bricks per day. This was the first
motion study designed to isolate the best possible method of performing a
given job. Later, Frank and his wife Lillian studied job motions using a
motion-picture camera and a split-second clock. When her husband died at the
age of 56, Lillian continued their work.

Need of Scientific Management Theory - The classical scientific branch arose from the need to
increase productivity and efficiency in the U.S.A. especially, where skilled labor was in short
supply at the beginning of the twentieth century and the only way to expand productivity was to
raise the efficiency of workers. The emphasis was on trying to find the best way to get the
most work done by examining how the work process was actually accomplished and by
scrutinizing the skills of the workforce. Taylor developed his theory through

observations and experience as a mechanical engineer. As a mechanical engineer
Taylor noticed that the environment lacked work standards, bred inefficient workers
and jobs were allocated to people without matching the job to the worker’s skill and
ability. In addition to this the relationship of the workers with the managers included
many confrontations.

Principal premise - The theory underlying Scientific Management is briefly that “there is one
best way of doing every act that has to be performed in a workshop, and that it is the duty of the
management to discover that one best way ” and to make such arrangements as will ensure that
it is always carried out.

Extent of Acceptance & Applicability - Though applicable to most of the problems of industrial
administration, they have in fact been worked out mainly in connection with the control of
workshop processes. Taylor's system was widely adopted in the United States and the world.
Although the Taylor system originated in the factory production departments, the concept of
separating planning from execution was universal in nature and, hence, had potential application
to other areas: production support services offices operations service industries.

Major questions -

The method of procedure may be indicated by propounding the following three questions:

I. What are the factors which limit the speed of a particular workshop process or machine?

II. Why is it that the volume of output from a particular process is always less at the end of
the week than the product of the speed of the process or of the machine, multiplied by
the working hours in the week, would lead one to expect?

III. Why do some workers produce so much more than others working under the same

1. Principles of Scientific Management Theory - Taylor devised four principles for scientific
management theory, which were:

1. The development of a true science of management,

2. The scientific selection and training of workers,

3. Proper remuneration for fast and high-quality work,

4. Equal division of work and responsibility between worker and manager

Merits - Frederick Winslow Taylor’s innovations in industrial engineering, particularly in time
and motion studies, paid off in dramatic improvements in productivity. Moreover, Taylor's ideas
on management and workers speak of justice for both parties. He propounded that "It (the public)
will no longer tolerate the type of employer who has his eyes only on dividends alone, who
refuses to do his share of the work and who merely cracks the whip over the heads of his
workmen and attempts to drive them harder work for low pay. No more will it tolerate tyranny
on the part of labour which demands one increase after another in pay and shorter hours while at
the same time it becomes less instead of more efficient."7

Limitations of Scientific Management Theory - Although Scientific Management Theory
maximized efficiency and productivity but its main limitation was ignoring human aspects of
employment. This is manifested in the following: “Some workers and unions opposed this theory
because they feared that working harder or faster would exhaust...” Thus Frederick Winslow
Taylor is a controversial figure in management history and he has been credited with destroying
the soul of work, of dehumanizing factories & making men into automatons.

Scientific Management, pg 139

Theory of Classical Administrative Management or Functional Management Theory and
Classical organization theory

Distinctive nature - the classical administrative approach concentrates on the total
organization. The emphasis is on the development of managerial principles .

Major Contributors of Classical Administrative school - The leading proponents of classical
organization theory were

1. Max Weber, (a German sociologist).

2. Henri Fayol, (a French engineer),

3. Mary Parker Follett, and

4. Chester I. Barnard.

Lyndall Urwick (a British company manager) was also among contributors to this school of

These theorists studied the flow of information within an organization and emphasized the
importance of understanding how an organization operated.

1. In the late 1800s, Max Weber disliked that many European organizations were
managed on a “personal” family-like basis and that employees were loyal to
individual supervisors rather than to the organization. He believed that
organizations should be managed impersonally and that a formal organizational
structure, where specific rules were followed, was important. In other words, he
didn't think that authority should be based on a person's personality. He thought
authority should be something that was part of a person's job and passed from
individual to individual as one person left and another took over. This
nonpersonal, objective form of organization was called a bureaucracy.

Weber believed that all bureaucracies have the following characteristics:

•A well-defined hierarchy. All positions within a bureaucracy are structured in a way
that permits the higher positions to supervise and control the lower positions. This
clear chain of command facilitates control and order throughout the organization.

• Division of labor and specialization. All responsibilities in an organization are
specialized so that each employee has the necessary expertise to do a particular task.

• Rules and regulations. Standard operating procedures govern all organizational
activities to provide certainty and facilitate coordination.

• Impersonal relationships between managers and employees. Managers should
maintain an impersonal relationship with employees so that favoritism and personal
prejudice do not influence decisions.

• Competence. Competence, not “who you know,” should be the basis for all
decisions made in hiring, job assignments, and promotions in order to foster ability
and merit as the primary characteristics of a bureaucratic organization.

• Records. A bureaucracy needs to maintain complete files regarding all its activities.

Classical organization theory is the “B” in bureaucracy. Weber defined the organization elements
which comprised the “ideal bureaucracy.” These included:

• A clearly defined (and documented) set of rules and procedures. This is
the company handbook, and other written instruments of company policy
• Division of labor according to functional expertise. This is the notion of
individual departments (sales, purchasing, accounting, etc.)
• A clear chain of command. There is a hierarchy based on management
rank. Weber also stipulated that authority in an organizational setting should be
based on the office itself—not on the individual. (Consider a political analogy:
Neither Gerald Ford nor Jimmy Carter would be empowered to declare war or
veto a bill today. Their past executive powers were based on the office they held
—not on their individual persons.)

• Individual advancement based on merit. Promotions should go to those
who deserve who perform well on the job.
• Professional managers. The person (or other entity) who owns the
company doesn’t necessarily possess the expertise needed to keep it running
smoothly on a day-to-day basis.

As you can see, many aspects of Weber’s “ideal bureaucracy” are simply measures that ensure
fairness and objectivity. But critics of classical organization theory charged that it placed too
much faith in the infallibility of rules and procedures, while ignoring important aspects of
individual motivation.

2. Henri Fayol, a French mining engineer, developed 14 principles of management
based on his management experiences. These principles provide modern-day
managers with general guidelines on how a supervisor should organize his
department and manage his staff. Although later research has created controversy
over many of the following principles, they are still widely used in management

This developed from the work of Henri Fayol (1841 - 1925) and his book
Administration Industrielle et Genrale. He advocates the following principles of
business organization: (1) Division of work, (2) Clear allocation of authority, (3)
Discipline stemming from close supervision of work, (4) Unity of command - that is,
everyone should know who his supervisor is. Other principles are introduced to
develop in detail these ideas, which in essence compare business organization to a
military organization.8

• Division of work: Division of work and specialization produces more and better
work with the same effort.

• Authority and responsibility: Authority is the right to give orders and the power to
exact obedience. A manager has official authority because of her position, as well as


personal authority based on individual personality, intelligence, and experience.
Authority creates responsibility.

• Discipline: Obedience and respect within an organization are absolutely essential.
Good discipline requires managers to apply sanctions whenever violations become

• Unity of command: An employee should receive orders from only one superior.

• Unity of direction: Organizational activities must have one central authority and one
plan of action.

• Subordination of individual interest to general interest: The interests of one
employee or group of employees are subordinate to the interests and goals of the

• Remuneration of personnel: Salaries — the price of services rendered by
employees — should be fair and provide satisfaction both to the employee and

• Centralization: The objective of centralization is the best utilization of personnel.
The degree of centralization varies according to the dynamics of each organization.

• Scalar chain: A chain of authority exists from the highest organizational authority to
the lowest ranks.

• Order: Organizational order for materials and personnel is essential. The right
materials and the right employees are necessary for each organizational function and

• Equity: In organizations, equity is a combination of kindliness and justice. Both
equity and equality of treatment should be considered when dealing with employees.

• Stability of tenure of personnel: To attain the maximum productivity of personnel,
a stable work force is needed.

• Initiative: Thinking out a plan and ensuring its success is an extremely strong
motivator. Zeal, energy, and initiative are desired at all levels of the organizational

• Esprit de corps: Teamwork is fundamentally important to an organization. Work
teams and extensive face-to-face verbal communication encourages teamwork.

3. Mary Parker Follett stressed the importance of an organization establishing
common goals for its employees. However, she also began to think somewhat
differently than the other theorists of her day, discarding command-style
hierarchical organizations where employees were treated like robots. She began
to talk about such things as ethics, power, and leadership. She encouraged
managers to allow employees to participate in decision making. She stressed the
importance of people rather than techniques — a concept very much before her
time. As a result, she was a pioneer and often not taken seriously by management
scholars of her time. But times change, and innovative ideas from the past
suddenly take on new meanings. Much of what managers do today is based on the
fundamentals that Follett established more than 80 years ago.

4. Chester Barnard, who was president of New Jersey Bell Telephone Company,
introduced the idea of the informal organization — cliques (exclusive groups of
people) that naturally form within a company. He felt that these informal
organizations provided necessary and vital communication functions for the
overall organization and that they could help the organization accomplish its

Barnard felt that it was particularly important for managers to develop a sense of
common purpose where a willingness to cooperate is strongly encouraged. He is
credited with developing the acceptance theory of management, which
emphasizes the willingness of employees to accept that managers have legitimate
authority to act. Barnard felt that four factors affected the willingness of
employees to accept authority:

• The employees must understand the communication.

• The employees accept the communication as being consistent with the organization's

• The employees feel that their actions will be consistent with the needs and desires of
the other employees.

• The employees feel that they are mentally and physically able to carry out the order.

Barnard's sympathy for and understanding of employee needs positioned him as a bridge to
the behavioral school of management, the next school of thought to emerge.


• Behavioral school of management - Body of management thought based on the belief that
use of psychological techniques in motivating employees works better than rules and
regulations proposed by classical school of management. 9

• Contingency school of management - Body of management thought, based on the
premises that there is no single best way to manage because every situation and every
manager is different. Therefore, there are only a few universal management principles,
and an appropriate management style depends on the demands of a particular situation.10

• Quantitative school of management - Body of management thought that seeks to combine
classical management theories and behavioral science through the use of elaborate
mathematical models. 11