2. Major contributions and drawbacks of Classical Management Theory.

i. Contributions

The classical perspective on management emerged during the nineteenth and early

twentieth centuries. The factory system that began to appear in the 1800s posed challenges

that earlier organizations had not encountered. Problems arose in tooling the plants,

organizing managerial structure, training employees (many of them non-English-speaking

immigrants), scheduling complex manufacturing operations, and dealing with increased

labour dissatisfaction and resulting strike.

Classical management theory is based on the belief that workers only have physical

and economic needs. It does not take into account social needs or job satisfaction, but

instead advocates a specialization of labour, centralized leadership and decision-making,

and profit maximization. Designed solely to streamline operations, increase productivity and

enhance the bottom line, this idea arose in the late 19 th century and gained prominence

through the first half of the 20 th century. While not widely subscribed to in modern times, this

theory offers some principles that remain valid, to an extent, in small business settings in

regards to manufacturing. The classical management theory is a style of management that

emphasizes hierarchy, specialized roles and single leadership for optimized efficiency in the

workplace.

One of the contributions of the classical management structure is a clear

organizational hierarchy with three distinct management levels. Each management group

has its own objectives and responsibilities. The levels of leadership and responsibilities are

clear and well defined. While the three-level structure may not be suitable for all small

businesses, it can benefit those that are expanding. The second contributions of the

classical management approach are the division of labour. Projects are broken down into

smaller tasks that are easy to complete. Employees' responsibilities and expectations are

clearly defined. This approach allows workers to narrow their field of expertise and to
specialize in one area. Small-businesses owners can benefit from taking this approach if

they are looking to increase production with minimal expense.

Third, according to classical management theory, employees should be motivated

by monetary rewards. In other words, they will work harder and become more productive if

they have an incentive to look forward to. This gives management easier control over the

workforce. Employees feel appreciated when being rewarded for hard work. A small-

business owner can take this approach to motivate the employees to achieve production

goals.

Finally, the autocratic leadership approach is the central part of classical

management theory. It states that an organization should have a single leader to make

decisions, to organize and direct the employees. All decisions are made at the top level

and communicated down. The autocratic leadership approach is beneficial in instances

when small-business decisions need to be made quickly by a leader. Small businesses,

especially sole proprietorships, can have an advantage in taking this approach, as they

need a strong leader to grow.

ii. Drawbacks

Though the classical theory has a great contribution, it also has the drawbacks. The main

flaw of classical management theory was its limited emphasis on employee job satisfaction and

human relation. Classical approaches, by emphasising formal relationships in the organisation, tend

to ignore informal relationships, which are characterised by social interaction among workers, the

emergence of group leaders other than those specified by the formal organisation, and so on. For

businesses that rely on teamwork, creative contributions, and open communication, this might be a

disadvantage. As a result, their focus is understandably limited.

The drawbacks of classical theory included restricted the implementation of new ideas and

concepts. Since the classical theory has the autocratic leader approach, employee need to follow

and obey their leader instruction. In this case, most of the autocratic leader didn’t want to hear any
suggestion especially from his employee. Hence, the ideas and concepts from the employee can’t

be implemented in the business. As a result, a company's ability to grow and execute new ideas

and concepts is frequently restricted. It is also caused delay in business decision making as the top-

level management will keep the decision making authority with themselves. Therefore, if there any

emergency or situations that demanding immediate action, the lower level managers will have to

rely to the top level managers.

The third drawbacks of the classical theory are unintended consequences. Classical

approaches strive for high productivity, predictability of behaviour, and fairness among

employees and between managers and workers; yet, they fail to acknowledge that various

unforeseen effects might arise in practise. For example, a strong emphasis on rules and

regulations may lead to individuals simply obeying rules without considering their original

objective. Oftentimes, since rules specify a minimum level of performance demanded of

employees, that is all they achieve. Perhaps much more could be accomplished if the

regulations were not so specific.

References

i. What is Classical Management Theory? | Villanova University. (2015, January 13).

Villanova University. https://www.villanovau.com/resources/leadership/classical-

management-theory/

ii. The Advantages of a Team-Based Lateral Organizational Structure. (2017). Small

Business - Chron.com. https://smallbusiness.chron.com/advantages-team-based-

lateral-organizational-structure-718.html

iii. ‌Q&A: What Is the Classical Management Theory? (2021). Indeed Career Guide.

https://www.indeed.com/career-advice/career-development/classical-management-

theory

iv. Classical Management Theory Advantages and Disadvantages. (2020, September

13). CommerceMates. https://commercemates.com/classical-management-theory-

advantages-and-disadvantages/