Classical management theory is based on developing universal management principles for various situations. It’s broken down into three emphases.
* SCIENTIFIC MANAGEMENT Theory which focuses on production work flows and productivity of individual workers, * ADMINISTRATIVE MANAGEMENT THEORY which focuses on the total organization. The emphasis is on the development of managerial principles rather than work methods.
* BUREAUCRATIC MANAGEMENT THEORY which focuses on strict implementation of rules and regulation, hierarchy systems in achieving maximum efficiency. Bureaucratic Theory by Max Weber
Bureaucratic Theory was developed by a German Sociologist and political economist Max Weber (1864-1920). According to him, bureaucracy is the most efficient form of organisation. The organisation has a well-defined line of authority. It has clear rules and regulations which are strictly followed.
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.
* MAX WEBER was the first of management theorists who were concerned the management structure with the sets of rule and regulations
* Weberian bureaucracy is characterized by hierarchical organization, action taken on the basis of and recorded in written rules, and bureaucratic officials requiring expert training. Career advancement depends on technical qualifications judged by organization, not individuals. * Weber’s ideas on bureaucracy stemmed from society during the Industrial Revolution.
Bureaucracy is a complex means of managing life in social institutions that includes rules and regulations, patterns, and procedures that are designed to simplify the functioning of complex organizations.
* bureaucratic control
setting standards, measuring actual performance and taking corrective action through administrative or hierarchical techniques such as creating policies Weber believed that all bureaucracies have the following characteristics: 1. Hierarchical positions
* There is a well defined chain of command.
* 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. * Eliminate managerial inconsistencies.
2. 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. * Each placement has a specialty or specific duty.(“ You stick to your duty and your duty only”) * People are given authority according to their position in organization * Maintain the consistency of working.
3. Rules and regulations.
* A well understood system must have Rules and regulation of the duties to be followed by the employees. * Standard operating procedures govern all organizational activities to provide certainty and facilitate coordination. * Records are kept for future references. A bureaucracy needs to maintain complete files regarding all its activities. * Maintain the consistency of working
4. An “up-focused” or “in-focused” mission
* If the mission is described as “up-focused,” then the organization’s purpose is to serve the stockholders, the board, or whatever agency empowered it. * If the mission is to serve the organization itself, and those within it, e.g., to produce high profits, to gain market share, or to produce a cash stream, then the mission is described as “in-focused. 5. Impersonal relationships between managers and employees. * Managers should maintain an impersonal relationship with employees so that favoritism and personal prejudice do not influence decisions. * To eliminate bias, ignore persuasion and personal differences 6. Employment based on technical qualifications
* People are selected on the basis of their credentials and merit and are paid according to their position in the hierarchy. * Competence, not “who you know,” should be the basis for all decisions made in hiring, job assignments, and promotions
Criticism of Bureaucratic Organization
Bureaucratic Management Approach of Max Weber also has some fault-lines and received criticism for it. * The emphasis only on rules and regulations.
* There will be unnecessary delay in decision-making due to formalities and rules of Bureaucratic Organization. * Coordination and communication hampered because of too much formality and rules. * Bureaucracy involves a lot of paper work and has just too much level of authority which results in lot of wastage of time, effort and money. Not ideal for efficiency. * Because of its too much formality, Bureaucratic approach is not suitable for business organizations. Bureaucratic model may be suitable for government organizations. * Too much importance is given to the technical qualifications of the employees for promotion and transfers. Dedication and commitment of the employee is not considered. * Limited scope for Human Resource (HR). No importance is given to informal groups and neither any scope is given to form one.
Max Weber’s bureaucratic approach worked as a solution to problems of traditional administrative systems. But it was not the prefect or “close to perfect” solution. The bureaucratic structure gives all the importance and power to the top level management. And the rules and levels of authority are just too much. It gives a greater sense of security to the employees. But bureaucratic management gives window for “red-tapism”.
(Contribution of Henri Fayol)
* Fayol took a “top-down” approach to management by focusing on managerial practices to increase efficiency in organizations. His writing provided guidance to managers on how to accomplish their managerial duties, and the practices in which they should engage. * The major difference between Fayol and Taylor is Fayolism’s concern with the “human” and behavioral characterisitcs of employees and Fayol’s focus on trainingmanagement instead of focusing on individual worker efficiency. * Fayol stressed the importance and the practice of forecasting and planning in order to train management and improve workplace productivity.
* Scalar chains
The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain.
Fayolism focused on managerial practices that could minimize misunderstandings and increase efficiency in organizations.The focus is on enlightened managers on how to accomplish their managerial duties.
* Top-down perspective
Focusing on the big picture first then moving to smaller items, Fayol focused on improving upper management first and then moved to improving efficiency of workers.
* a French industrialist and a 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 her department and manage her staff. * According to Fayol, management was not personal talent; it is a knowledge base skill. .
Henri Fayol’s Administrative Management is based on six admin activities. They are-
1. Technical : Production and manufacture
2. Managerial: Planning, controlling, co-ordination 3. Commercial: Purchasing and selling
4. Financial: Use of capital
5. Accounting: Asset, Liabilities, cost, profits
6. Security: Protection of goods and Person
FAYOL’S FOURTEEN PRINCIPLES OF MANAGEMENT
1. Division of work:
* Division of work means specialization.
* Each job and work should be divided into small task and should be assigned to specialist of it.
2. Authority and responsibility:
* Authority is the right to give orders and command, the power to exact obedience. * A manager has official authority because of her position . * Authority creates responsibility.
* Responsibilty means to accomplish objective.
* Discipline is required at every level in every organization. * Fayol stated discipline in terms of obedience, application, and respect to superiors. * Good discipline requires managers to apply sanctions whenever violations become apparent
4. Unity of command: A subordinate should receive order from only one boss/superior.
5. Unity of direction:
* It means that all the works of an organization must work together to accomplish a common objective, * must have one central authority and one plan of action.
6. Subordination of individual interest to common interest: * The interests of one employee or group of employees are subordinate to the interests and goals of the organization. * Worker follows the common interest of organization rather than individual.
7. Remuneration: Salaries — the price of services rendered by employees — should be fair and provide satisfaction both to the employee and employer.
8. Centralization: There should be one central point in organization which exercises overall direction and control of all the parts.
9. Scalar Chain: Scalar chain is the chain or line of command from superior to subordinates. 10. Order: Only proper order can give an efficient management.
* In organizations, equity is a combination of kindliness and justice. * Both equity and equality of treatment should be considered when dealing with employees. * Equity creates loyalty and devotion among the employees.
12. Stability of tenure personnel:
* Security of job for an employee in an organization is very important and pre-requisite condition. * Retaining productive employee should always a higher priority of management.
13. Esprit de corps:
* Management should encourage harmony and proper understandings between workers. Fayol said that in union there is strength. * Whole organization should work as a team.
* Work teams and extensive face‐to‐face verbal communication encourages teamwork.
* Manager should be encouraged the employees Initiative for creative working. * 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 ladder