4 Classical School of Thoughts

Dr.Vishal Kumar

3.1 Learning Objective

3.2 Introduction

3.3 Classical Approach of Management

3.4 Scientific Management

3.4.1 Principles of Scientific Management

3.4.2 Contributions of F.W.Taylor

3.5 Administrative Management

3.6 Bureaucratic Management

3.6.1 Features of Bureaucratic Administration

3.7 Summary

3.1. Learning Objective

After completing this module, you will be able to:

i. Understand the historical aspect of management thoughts.

ii. Understand various classical approaches of management.

iii. Know about the salient features of classical thoughts of management.

CLASSICAL SCHOOL OF THOUGHTS

3.2 Introduction:

In management history, two events are very significant. First, in 1776, when Adam Smith published a book named ‘The Wealth of Nations’. In this book Adam Smith argued the economic advantage that organisations would gain from job specialization/ Division of labour. According to Smith, division of labour increased productivity by increasing each workers skill, saving time and creating labour saving inventions and machinery.

The second important event is the Industrial Revolution. Starting in the late eighteenth century when machine power was substituted for human power, it became more economical to manufacture goods in factories instead at home. So they needed someone who forecast demand, ensure enough material in hand to make products, supervise as well as assign task to people, direct daily activities and so on. That “Someone” was managers, and these managers would need formal theories to get the directions in order to smooth running of the organisations. So in early 1900s, first step was taken toward developing such theories.

The classical thought to management developed during industrial revolution in the year 1900 when different problems related to production and labour began to appear. Some of these were low productivity, low wages, wastage in production and distribution, disaffection of relations between labour and management resulting in loss of man day’s etc. It contributed significantly to inefficiency. Both labour and management were suspicious to each other and did not see eye to eye. Communication system was also defective which enhance the degree of discord between labour and management. So at that time managers think how to increase the productivity and efficiency of the workers. Efforts were made to find out the best way to get the most work done by examining the work process and dividing the work according to the skills of the workforce. As a result, the classical thought to management developed. It is the oldest thought to management and the principles developed under this thought are accepted even today.

3.3 Classical Approach of Management:These first studies of management, described as the Classical Approach, focused rationality and making organisations and workers as efficient as possible. Frederic Winslow Taylor, Frank & Lillian Gilberth, Henri Fayol and Max Weber are the major contributors to the classical school of management. Classical management thought is divided into three separate school of thoughts:

Scientific Management
Administrative Management and
Bureaucratic Management

3.4 Scientific Management

The concept of scientific management is developed by Taylor and his contemporary owes it origin to the middle of nineteenth century. A number of business scientists have made significant contribution to management science which may be stated as the pace setter for evolving the concept of scientific management.

Frederick Winslaw Taylor developed the concept of scientific management on the basis of practical experience he gathered while working with a number of firms starting with Midvale Steel Company as a day labour in 1878. After a few months he became the gang boss and after three years became the foreman. As a foreman hedecided to change the old system of management. All these efforts gave him promotion to the status of Chief Engineer in 1884 at the age of 28 years. In 1886, Taylor joined the American Society of Mechanical Engineer and heard a paper read by Henry R. Towne entitled “The Engineer as an Economist”. It exercised a propound impact on him. With his experience on the job, in 1893 he presented a thought- provoking paper on “A Piece Rate System”. In this paper he had developed a system of management which was applicable to any system of wage payment. In 1903 he wrote the second paper on “Shop management” which was the extension of his previous paper on piece rate system. In this paper the emphasis was on “coupling the high wages for the worker with low labour cost for the employers”. In 1911 his famous book “The Principles of Scientific Management” was published by Harper and Bros,NewYork.

F.W.Taylor defined Scientific Management as the substitution of exact scientific investigations and knowledge for the old individual judgment or opinion; either of the workmen or the boss, in all matters relating to the work done in the establishment. The workers are selected scientifically and training is providing to both new and existing workers.

According to F.W.Taylor “Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way”

3.4.1 Principles of Scientific Management Principles of Scientific Management are given below:

1. Science not rule of thumb/Research: It means the replacement of old method of doing work scientifically. In simple words, it means develop a science for each element of a man’s work which replaces the old rule-of-thumb method. It includes the allotment of fair work to each worker, standardization in work, adoption of differential piece rate of payment system etc.

2. Co-operation: Heartily cooperate with the men as to ensure all of the work being done in accordance with the principles of scientific management which has been developed. In simple words there should be cordial relationship between workers and management so that workers should help the management to get larger profits, better quality products and lower cost of production. According to Taylor, mutual understanding and change in thinking are the factors necessary for cooperation.

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3. Equal division of work and responsibility: There should be equal division of work and responsibility between the management and workmen. This principle states that only that work should be assigned to groups which can be perform effectively and efficiently. Management should take decisions and make plan and labour should be responsible for actually doing the work. In this way, each will be responsible and accountable for their tasks and the productivity of the organization will increase. All this promoted the division of responsibility and work.

4. Harmony in group action: Taylor emphasized peace and friendship in group action. In simple words, dissatisfaction of any worker is to be avoided in the group action. In case, there is any dissatisfaction among workers then, it is eliminated through scientific selection, training and strategic placing of workers. Taylor further elaborated that all the workers should be given opportunity to improve and it will added the value for a company.

5. Maximum output: The objective of maximum output is achieved through equal division of work and responsibility by the management and workers jointly. If production increases regularly thenit results in the increasing profit to the management and wages and incentives to the workers. So the workers must be provided proper training from time to time, so that their knowledge and efficiency may be increased.

3.4.2 Contributions of F.W.Taylor

F.W.Taylor was the father of Scientific Management. He has applied the principles of Scientific Management to solve the problems of management. According to him, it was the duty of the management to aware the employees about the expectations of management from employees. He further stated that management should specify the way through which the job is to be completed. He made several important contributions which are classified under Scientific Management.

I. Time and Motion Study: Taylor was the first person to conducted Time Study and Motion Study. Time Study refers to the act of measuring the time required to perform a particulat job. A standard time to do a job is fixed by conducting the time study. Motion Study is relating to the movement of a machine operator and his machine while performing the job. The purpose of conducting this study is elimination of unnecessary movement of machine operator and machine. Thus the best way of doing a job was found. This replaced the old rule-of-thumb-knowledge of the workmen.

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II. Differential Piece Rate System: F.W.Taylor focused upon fair wages to workers, and had introduced a new payment plan called the differential piece work, in which he linked incentives with production. According to this system worker get low piece rate if he produced less than the standard number of pieces and high rate if surpassed the standard. According to Taylor high piece rate would encourage the workers to increase production.

III. Scientific Selection and Training: Taylor strongly recommended the need for scientific selection and training. According to him, adequate training should be given to new as well as existing workers in order to update their knowledge and enable the workers to do a higher, more interesting and more profitable class of work than he has done in the past.

IV. Work Study: It refer to the systematic critical assessment of efficiency required to do the job. According to Taylor, Method Study, Motion Study, Time Study, and Fatigue Study are parts of Work Study.

V. Separation of Planning Function: Taylor known as the first person to separate the planning function from executive function. Previously both planning and executive function were performed by the same person. Taylor suggested two new concepts: (a) separation of planning and execution of work and (b) foremanship. In those days, foreman simply told the worker what job to perform, not how to do them. Taylor recommended that the work should be planned by a foreman and not by the worker so, he suggested the concept of functional foremanship. This concept is totally based on the principle of specialization and makes full utilization of the expertise of various experts. In those days, foreman simply told the worker what job to perform, not how to do them. Taylor recommended that the work should be planned by a foreman and not by the worker.he further stated that four foremen should be appointed for planning department and four for production department which is known as ‘functional foremanship’. In planning department they were route clerk, instruction cord clerk, time and cost clerk and disciplinarian and in production department they were speed boss, gang boss, repair boss and inspector.

VI. Concept of Mental Revolution: Taylor was the first person who supported mental revolution both on the part of the employer and the employee. By mental revolution he meant transformation in the traditional thinking of labour and management. He strongly believed enterprise is a cooperative venture of labour and management. If there is no cooperation between two then the whole concept of scientific management become useless. Such cooperation is possible if both have respect for one another and both partners in decision- making process. Taylor advised to workers that they should have a sense of belongingness to the enterprise and to the management to accept workers as partner and involve them in the decision making process. So in his belief the success of implementation of Scientific Management depends upon the mental revolution of Management and Workers.

3.5Administrative Management

Henry Fayol wrote during the same time-period as Taylor.While Taylor was concerned with first-line managers and the Scientific Management but Fayol’s focus was on the activities of all the managers. Henry Fayol is considered as the Father of Administrative Management theory. Henry Fayol focuses on the development of broad administrative principles which are applicable to general and higher managerial levels. He was a French industrialist. The observations of Henry Fayol on the principles of management were brought out in French language in 1916. He wrote a book entitled “General and Industrialist Administration”. Later on it was published In English language. The principles of Management of Henry Fayol were known to the world only after 1949.Fayol joined as an engineer in mining company and become the chief managing director of the same company for his remarkable abilities and skills. From 1918 to 1926, he worked hard to popularize his principles of management.

Fayol wrote that all the activities of business which are describe as technical, commercial, financial, accounting, security or administrative (management). Henry Fayol used the word administrative for what we call management. He concentrated on top management. It is known from his book “General and Industrial Management”. Management plays a very important role in the government undertakings whether large or small, industrial, commercial, religious or any other. In the words of Henry Fayol, business activities could be classified as commercial, financial, security, accounting, technical and managerial or administrative. Of course, Henry’s primary focuses on managerial activity because he felt that managerial skills had been the most neglected aspect of business operations. He indicated that managerial activity was by far the most important and deserved the most attention.

Henry Fayol draws a clear line between principles of management and elements or functions of management. He considered planning, organizing, commanding, co-ordination and control as an element or functions of management. Many management theorists and even practitioners have found this classification very realistic and useful. Further the process of management as a series of functions originated with Henry Fayol. He continuously emphasized that this process is the same at every level of an organization and is common to all types of organizations. Fayol also presented 14 principles of management as general guides to management process and management practice. These are given below:

Division of Work: Specialisation increases output by making employees more efficient so, principles of specialisation necessary for efficiency in utilising labour.
Authority and Responsibility: Responsibility is the outcome of Authority and arises from it. Managers must be able to give orders and authority gives them the right.
Discipline: Every employee must obey and respect the rules that govern the organisation. It requires supervision at all levels, clear and fair agreements. Disciple is obtained through judicial application of penalties.
Unity of Command: Each employee should receive orders from one superior only. In other words, each employee is responsible to only one superior.
Unity of Direction: It means each group of activities having a common object must have one head and one plan. So there should be complete harmony between individual and organizational goals on the one hand and between departmental goals on the other hand.
Subordination of Individual interest to group interests: The interest of the group should have priority over the individual interest. In the event of clash between the general and the personal interests, the management should bring reconciliation between the two on the basis of priority of general interests.
Remuneration: Workers should be paid a fair wage for their services. Because fair remuneration increases worker’s efficiency and morale and foster good relations between worker’s and management.
Centralisation: The Management must decide the degree of centralization or decentralization of authority on the basis of nature of circumstances, size of undertakings, type of activities and nature of organizational structure.
Scalar chain: The line of authority from top management to the lowest ranks is the scalar chain. According to Fayol, Scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks.
Order: People and materials should be in the right place at the right time. In simple words, a place for every-one and everything in its place.
Equity: Mangers should be kind and fair to the employees by dealing with employees in a just and kindly manner, loyalty and distribution of power are required to inspire.
Stability of tenure of personnel: Security of job is the fundamental aspect of morale and motivation. Management should provide orderly personnel planning and ensure that replacement is available to fill the vacancies.
Initiative: A manager should have the conceiving and executing initiative. It will have psychological effect over the employees.
Esprit de corps: Promoting team spirit will build harmony and unity within the organisation. It emphasise the need for the team work and the importance of communication in obtaining it.

3.6 Bureaucratic Management

Max Weber, a German social scientist, is known as the Father of the theory of Bureaucratic Management. He wanted to frame a rigid form of organization. He proposed a form of organization which is very similar to the form of organization by Henry Fayol. In the early 1900 he made a study of different types of business and Government organizations and distinguished three basic type of administration in them:(a) Leader Oriented (b) Tradition-Oriented and (c) Bureaucratic.Weber believed that an efficient form of organization cannot be founded if managerial inconsistencies exist. So, he framed rigid rules to eliminate managerial inconsistence in order to bring effectiveness in an organization. He advocated the strict adherence of rules and regulation in an organization. His firm belief that these would make an efficient form of organization and he called it Bureaucratic –A form of organization characterized by divisionoflabour, a clearly defined hierarchy, detailed rules and regulations and impersonal relationship.

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3.6.1 Features of Bureaucratic Administration

Max Weber analysed the various points before finalising an idear form of organisation. Bureaucratic organisation offers a lot of benefit to the public. Important features of bureaucratic administration are as given below:

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SystematicDivision of Work: Weber stated that systematic division of work increases production by improving efficiency and saving time in changing over the one job to another. Each person performs his work in a pre-determined manner. In this way a high degree of functional specialization can be obtained.
Hierarchy of Authority: Each lower officer is under the control and supervision of a higher authority. A clearly defined hierarchy is needed to give commands for performance of duties. Each superior has control over his subordinates with a right for making a report to higher authorities in a specified manner.
Rights and Duties: Weber stated that each employee should understand his rights and the duties to be performed. The procedure is to be taken into account while performing the work.
Rules and Regulations: Rules and regulations are framed to ensure consistency in the performance of work. To achieve this objective a special training is provided to impart knowledge of rules and regulation
Impersonal Relationships:Peoples are selected on the basis of their credentials and merits and are paid according to their position in the hierarchy. Promotions are made systematically. It helps in winning people’s loyalty and commitment.
Administrative acts, decisions and rules are recorded in writing: This makes the organization independent of people besides making peoples understanding more accurate.

3.7 Summary

Management has developed since the time when the world came into existence. Classical approach contains three theories that is scientific theory, Administrative theory and Bureaucratic theory. Each one of these approaches has made a distinct contribution to management theory. The stress in the scientific management approach is on task aspect of group effort, in administrative management approach, it is on laying down universal principles of management and in bureaucracy it is on following standard rules.F.W.Taylor, known as the father of Scientific Management, studied manual work using scientific principles as guidelines for improving production efficiency and to find the best way to do these jobs. Henry Fayol believed that the functions of management were common to all business endeavors but were different process from other business functions. He developed 14 principles of management from which many current management concepts have evolved. Weber described an ideal type of organization he called bureaucracy, which is a type still used by many of today’s large organizations.

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Suggested Readings

Kootnz & O’Donnell, Principles of Management.
J.S. Chandan, Management Concepts and Strategies.
Douglas McGregor, The Human side of enterprise, McGraw Hill Company Inc., New York, 1960, pp.33-34.
Houghton Mifflin Harcourt, Behavioural Management Theory Disha, Behavioural approach to management (with criticism)
Sherri Hartzell, The emergence of the neo classical theory of management
Ziarab Mahmood and Muhammad Bashara (2012), “Review of Classical Management Theories” International Journal of Social Sciences and Education, ISSN: 2223-4934 Volume: 2 Issue: 1, January 2012.
Gatewood, Taylor & Ferrell (1995), Management: Comprehension, Analysis, and Application.
Arun Kumar and R. Sharma, Principles of Business Management. Sherlerkar and Sherlerkar, Principles of Management
B.P. Singh, Business Management and Organizations
Stephen P Robbins, David A Decanzo, Fundamentals of Management, 3rd Edition, Pearson Education, 2002.
VSP Rao, V Hari Krishna, Management- Text and Cases, Excel Books, 2002.
P CTripathi, P N Reddy, Principles of Management, 4th Edition, Tata McGraw- Hill, 2008.
Encyclopaedia of Management, op., p. 866.
Frederick Winslaw Taylor, Principles of scientific Management, harper and Bros., New York, 1911, pp. 36-37.
Scientific Management in American Society, ed., R.S. person, Harper and Bros, New York, 1929.