A2. Classical Management

Classical Organizational Theory

Theory that merged in the first few decades of the 20th century that focused mainly on structural relationships and believes that organizations exist for economic reasons and to accomplish productivity goals

4 Basic Tenets of the Classical Organization Theory

A system of differentiated activities, People, Cooperation, & Authority

4 Major Structural Principles of the Classical Organizational Theory

Functional Principle, Scalar Principle, Line/Staff Principle, & Span of Control

Functional Principle

This principle states the concept behind division of labor in which organizations should be divided into units with similar functions "Horizontal growth"

Scalar Principle

This principle refers to the chain of command that grows with levels added to the organization with each level having its own degree of authority and responsibility "Vertical Growth" also includes Unity of Command

Unity of Command

Concept under the Scalar Principle in which each subordinate should be accountable to only one superior

Line/Staff Principle

This principle is composed of line/staff functions

Line functions

Function responsible for meeting the major goals of the organization

Staff functions

Function that supports the line's activities but are subsidiary to the importance of line functions

Span of Control

Number of subordinates a manager is responsible for supervising wherein the optimal range, according to Lyndal Urwich, is 5-6

Branches under Classical Organizational Theory

Scientific Management, Bureaucratic Management, & Administrative Theory/Management

Scientific Management by Frederick Taylor

Classical organizational theory that believes the organization is a machine whose focus is to run more effectively and studies are conducted to discover the fastest and efficient method to implement

4 Principles of Scientific Management

Management gathers data from workers

Workers are carefully selected and trained

Scientific selection, data collection, and training are combined to enhance efficiency

The work itself is redistributed, with management taking over tasks previously left to subordinates

Bureaucratic Management by Max Weber

Classical organizational theory that describes the structure, organization, and operation of many efficient organizations with a well-defined authority hierarchy with strict rules for governing behavior, with few members with highest status on the top

Division of labor

Characteristic of bureaucratic management in which each job is a specialized position with its own set of responsibilities and duties; division of tasks performed in an organization

Delegation of authority

Approach whereby supervisors assign tasks to separate employees and hold them responsible for completing these tasks (Micromanagers); Information about which lower-level employees report to higher-level employees

5 Principles of the Bureaucratic Management Theory

Structure, Specialization, Predictability and Stability, Rationality, & Democracy

Administrative Theory by Henri Fayol

Classical organizational theory that aims to improve organizational productivity by focusing on methods that managers can use to synchronize internal processes

5 Functions of Management in the Administrative Theory

Planning, Organization, Commanding, Controlling, & Coordinating

Division of Labor

Principle of the Administrative Theory that involves the specialization of individuals

Authority

Principle of the Administrative Theory that involves issuing commands and comes with responsibility

Discipline

Principle of the Administrative Theory in which the subordinate must fully obey the superiors

Unity of Command

Principle of the Administrative Theory in which there is only one boss from whom a worker receives instructions

Unity of Direction

Principle of the Administrative Theory in which the organization is working under a singular plan

Subordination of Individual Interest

Principle of the Administrative Theory in which the interests of individuals are subordinate to the general interests

Remuneration

Principle of the Administrative Theory in which compensation is used to incentivize worker performance

Centralization

Principle of the Administrative Theory in which decision making is either centralized or decentralized

Line of Authority (Scalar Chain)

Principle of the Administrative Theory that describes the hierarchy of authority that places workers below managers in the reporting structure

Order

Principle of the Administrative Theory that involves well defined rules and standards for the work environment and work responsibilities

Equity

Principle of fairness of the Administrative Theory

Stability of Tenure

Principle of the Administrative Theory in which organizations need to have low turnover

Initiative

Principle of the Administrative Theory that allows employees to create plans and carry them out

Espirit de Corps

Principle of the Administrative Theory that is the sense of belonging within the organization