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University of Karachi

Management
Theory and Practice

Part I Managing Theories

1 - Classical Theories
(1900-1930)

Background:

Classical Management Theory is considered as the first schools of management thought. It was
developed in a result of the Industrial Revolution when new problems related to the factory
system began to appear. Managers were unsure of how to train employees (many of them non
English speaking immigrants) or deal with increased labour dissatisfaction, so they began to
test solutions. As a result, the classical management theory developed from efforts to find the
one best way to perform and manage tasks.

Classical management theories can be divided into two branches:

1. Classical scientific theories and
2. Classical administrative theories.

1. Classical Scientific Theories

Scientific Management Theories arose because of the need to increase productivity and
efficiency. 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.

The classical scientific school owes its roots to several major contributors, including Frederick
Taylor, Henry Gantt, and Frank and Lillian Gilbreth.

a. Frederick Winslow Taylor (1856 1915)

Frederick Winslow Taylor also called father of scientific management was an American
mechanical engineer who was born on March 20, 1856. Taylor developed concept that states
that the tendency of a worker to put more than the minimal effort into their daily work, and
called it soldiering. He, then, subdivided this concept into natural soldiering that is natural
tendency to take things easy, and systematic soldiering that is deliberate and organized
restriction of the work-rate by the employees. Following are the reasons, Taylor explain, for
soldiering:

1) Fear of unemployment,
2) Fluctuations in the earning from piece-rate systems and
3) Rule-of-thumb methods (a method of procedure based on experience and common sense)
permitted by management.

Taylor believed that organizations should study tasks and develop precise procedures. This
philosophy of Taylor is called Taylorism. His emphases were on the increase of efficiency and
productivity but he ignored many of the human aspects of employment. Taylorism prevailed
in the '30s through to the early '60s - and in many organisations considerably later than this.
University of Karachi
Management
Theory and Practice
Part I Managing Theories


Taylorism requires the management to adapt the following:

develop a science for each operation to replace opinion and rule of thumb
determine accurately from the science the correct time and methods for each job (time and
motion studies)
set up a suitable organisation to take all responsibility from the workers except that of the
actual job performance
select and train the workers (in the manner described above)
accept that management itself be governed by the science deployed for each operation and
surrender its arbitrary powers over the workers, i.e. cooperate with them.

In addition to the above, Taylorism also requires the workers to adapt the following:

stop worrying about the divisions of the fruits of production between wages and profits.
share in the prosperity of the firm by working in the correct way and receiving wage
increases.
give up their idea of time wasting and co-operate with the management in developing the
science
accept that management would be responsible for determining what was done and how
agree to be trained in new methods where applicable

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 shovelling 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.

b. Henry Laurence Gantt (1861 1919)

Henry Laurence Gantt was born on May 20, 1861. He was a colleague of Taylor at Bethlehem
Steel Company and was an American mechanical engineer and management consultant who is
best known for developing the Gantt chart in the 1910s.


University of Karachi
Management
Theory and Practice
Part I Managing Theories


Gantt chart, a bar graph that measures planned and completed work along each stage of
production. This visual display chart is based on time instead of quantity, volume, or weight.
Gantt charts were employed on major infrastructure projects including the Hoover Dam and
Interstate highway system and continue to be an important tool in project management.

c. Frank and Lillian Gilbreth

A husbandandwife 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. He was able to reduce the number of movements in laying bricks from
18 per brick to 5 per brick. 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.

2. Classical Administrative Theories.

The classical administrative approach concentrates on the total organization. The emphasis is
on the development of managerial principles rather than work methods.

Contributors to this school of thought include Henri Fayol, L F Urwrick and Max Weber. These
theorists studied the flow of information within an organization and emphasized the importance
of understanding how an organization operated.

a. Henri Fayol (1841 1925)

Henri Fayol was born on 29 July 1841 in Istanbul. His family returned to France in 1847, where
Fayol graduated from the mining academy in 1860. He began his working life as mining
engineer when he was 19 years old and made his way to Managing Director at the age of 47.
Based largely on his own experience, he developed his concept of administration. In 1916, he
published a book on general and industrial administration purely based on these experiences.

Fayol divide industrial activities into following six different categories:

1) Technical activities, e.g. production.
2) Commercial activities, e.g. buying and selling.
3) Financial activities, e.g. securing capital.
4) Security activities, e.g. safeguarding property.
5) Accounting activities, e.g. providing financial information.
6) Managerial activities, e.g. planning and organizing.

Fayol's work was one of the first comprehensive statements of a general theory of management.
He define managerial activities by defining managing. He said, to manage is to forecast and
plan, to organise, to command, to coordinate and to control. He called these as basic functions
of management and further define to forecast and plan as to examine the future and draw up
University of Karachi
Management
Theory and Practice
Part I Managing Theories

plans of action; to organise as to build up the structure, material and human, of the
undertaking; to command as to maintain activity among the personnel; to co-ordinate as to
bind together, unify and harmonise activity and effort; and to control as to see that everything
occurs in conformity with policy and practise.

The fourteen principles of management suggested by him are related these basic functions of
management process and are universally accepted. He also made them easily acceptable by
others. According to Henry Fayol, managers should be flexible in the application of these
principles. He emphasised that these principles were not absolute but capable to adaptation,
according to the need. Fayol has given adequate details of every principle suggested by him.

1) Division of work or separation of work or specialization of labour. Work should be divided
among individuals and groups to ensure that effort and attention are focused on special
portions of the task. Fayol presented work specialization as the best way to use the human
resources of the organization.
2) Authority. Managers must be able to give orders. Authority gives them this right. Note
that responsibility arises wherever authority is exercised.There must be balance between
authority and responsibility.
3) Discipline. Employees must obey and respect the rules that govern the organization. Good
discipline is the result of effective leadership, a clear understanding between management
and workers regarding the organization's rules, and the judicious use of penalties for
infractions of the rules.
4) Unity of command. Every employee should receive orders from only one superior.
5) Unity of direction. Each group of organizational activities that have the same objective
should be directed by one manager using one plan. All the efforts of the employees must
be directed in one way in achievement of one common goal.
6) Subordination of individual interests to the general interest. The interests of any one
employee or group of employees should not take precedence over the interests of the
organization as a whole.
7) Remuneration. Workers must be paid a fair wage for their services.
8) Centralization. Centralization refers to the degree to which subordinates are involved in
decision-making. Whether decision-making is centralized (to management) or
decentralized (to subordinates) is a question of proper proportion. The task is to find the
optimum degree of centralization for each situation.
9) Scalar chain. The line of authority from top management to the lowest ranks represents
the scalar chain. Communications should follow this chain. However, if following the chain
creates delays, cross-communications can be allowed if agreed to by all parties and
superiors are kept informed.
10) Order. This principle is concerned with systematic arrangement of men, machine, material
etc. there should be specific place for every employee in organization
11) Equity. Managers should be kind and fair to their subordinates.
12) Stability of tenure of personnel. High employee turnover is inefficient. Management
should provide orderly personnel planning and ensure that replacements are available to fill
vacancies.
13) Initiative. Employees who are allowed to originate and carry out plans will exert high
levels of effort.
14) Esprit de corps. Promoting team spirit will build harmony and unity within the
organization.

University of Karachi
Management
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b. Lyndall Fownes Urwick (1891 1983)

Lyndall Fownes Urwick was a British management consultant and business thinker. He was
born on March 3, 1891. He is recognised for integrating the ideas of earlier theorists like Henri
Fayol into a comprehensive theory of management administration.

Urwick believed that an organization is built on some principles. In 1952, he outlined these
principles as follow:

1) The principle of the objective - Every organisation and every part of the organisation must
be an expression of the purpose of the undertaking concerned, or it is meaningless and
therefore redundant.
2) The principle of specialisation - The activities of every member of any organised group
should be confined, as far as possible, to the performance of a single function.
3) The principle of co-ordination - The purpose of organising, as distinguished from the
purpose of the undertaking, is to facilitate co-ordination: unity of effort.
4) The principle of authority - In every organised group the supreme authority must rest
somewhere. There should be a clear line of authority to every individual in the group.
5) The principle of responsibility - The responsibility of the superior for the acts of the
subordinate is absolute.
6) The principle of definition - The content of each position, both the duties involved, the
authority and responsibility contemplated and the relationships with other positions should
be clearly defined in writing and published to all concerned.
7) The principle of correspondence - In every position, the responsibility and the authority
should correspond.
8) The principle of span of control - No person should supervise more than five, or at most,
six direct subordinates whose work interlocks.
9) The principle of balance - It is essential that the various units of an organisation should
be kept in balance.
10) The principle of continuity - Re-organisation is a continuous process: in every
undertaking specific provision should be made for it.

c. Max Weber (1864 1920)

Max Weber was born on April 21, 1864. He was a German sociologist, philosopher, and
political economist. His interest in an organization was from the point of view of their authority
structures. He wanted to find out why people in organization obeyed those in authority over
them. It was in his publication that the term bureaucracy was used to describe a rational form
of organization that today exists to a greater or lesser extent in practically every business and
public enterprise.

Weber believed that organizations should be managed impersonally and that a formal
organizational structure, where specific rules were followed, was important. In other words, he
did not 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 non-personal, objective form of organization was
called a bureaucracy.

University of Karachi
Management
Theory and Practice
Part I Managing Theories

Bureaucracy in this context is the organisational form of certain dominant characteristics such
as a hierarchy of authority and a system of rules.

Bureaucracy in a sense of red tape or officialdom should not be used as these meanings are
value-ridden and only emphasize very negative aspects of the original Max Weber model.

Through analyses of organisations, Weber identified three basic types of legitimate authority:
Traditional, Charismatic and Rational-Legal. Authority has to be distinguished from power in
this discussion. Power is a unilateral thing - it enables a person to force another to behave in a
certain way, whether by means of strength or by rewards. Authority, on the other hand, implies
acceptance of the rules by those over whom it is to be exercised within limits agreeable to the
subordinates that Weber refers to in discussing legitimate authority.

Weber presented three types of legitimate authority:

Traditional authority: where acceptance of those in authority arose from tradition and
custom.

Charismatic authority: where acceptance arises from loyalty to, and confidence in, the
personal qualities of the ruler.

Rational-legal authority: where acceptance arises out of the office, or position, of the person
in authority as bounded by the rules and procedures of the organization.

It is the rational-legal authority form that exists in most organisations today and this is the form
to which Weber ascribed the term 'bureaucracy'.

Weber believed that all bureaucracies have the following characteristics:

A welldefined 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 labour 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 favouritism 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.