Understand the strengths and weaknesses of classical management theory

Classical management theory emerged as a pivotal paradigm that shaped organisational structures. While it's considered somewhat dated, as it neglects contemporary job considerations, its influence continues to impact all workplaces directly or indirectly - particularly industries that value structured processes.

Read on to understand what classical management theory is, its history, strengths, weaknesses, and its relevance in today's dynamic work landscape.

What is classical management theory?

Classical management theory is a management style that focuses on a hierarchical organisational structure, specialised job roles, and autocracy to optimise efficiency in the workplace. It posits that employees only have physical and economic needs, so positive and negative incentives are essential to motivating them to work. 

The main aim of classical management is to create an efficient production system that increases productivity and maximises profit. While efficiency, productivity, and profit are front and centre of all businesses, this management theory is largely outdated as it ignores modern management considerations, such as job satisfaction and social needs. 

Classical management theory is one of the earliest management theories propounded during the Industrial Revolution. At the time, there were significant changes to how people worked, due to the rapid development of big factories. People moved from farms to factories and from small shops to large companies.

As you would expect with the eruption of a new industry, business owners questioned how they could best organise their processes and manage people, all while maximising productivity and profits.

Three people answered those questions. They are Max Weber, Frederick Taylor, and Henri Fayol, the founders of classical management theory.

Classical theories of management 

Weber, Taylor, and Fayol defined three approaches to managing organisational affairs to achieve organisational efficiency and productivity. Let's break them down:

Bureaucratic theory of management

German socialist Max Weber was a big-picture thinker and the founder of the bureaucratic theory of management. He believed organisations should resemble the government and the legal system, following a legal-rational approach, as opposed to more traditional family-led businesses that were often disorganised and riddled with favouritism.

Weber believed that clear rules and structure should govern the performance of large companies. He suggested job titles and descriptions should dictate the role scope and level of authority, and standardised guidelines should determine hiring and firing. In short, he wanted to hire the best people to work in organisations and organise them logically and sensibly.

Administrative management theory

Henri Fayol took a mid-level approach and focused on the management of people. He put forward the theory known as administrative management. It's also known as administrative science or classical management. 

He believed that people needed to be trained in a much more systematic approach, specifically managers. He wrote a book in the 1940s called General and Industrial Management that discussed management activities where managers should have competence. He categorised them in five ways:

  • Planning: Look ahead and chart a course

  • Organisation: Select and arrange people

  • Command: Oversee, lead, and drive

  • Coordinate: Harmonise and facilitate

  • Control: Ensure compliance

Scientific management theory

Frederick Taylor was more micro-focused in his approach and was interested in applying science to work. He saw issues with self-stylised working patterns where employees set their own methods for doing their job, the main one being that it hampered productivity due to inefficiency.

Taylor popularised time and motion studies to combat this. He went into organisations and reviewed how much time every task took and how many motions each task compromised. Each task was broken down into very small steps and then standardised to the “one right way,” increasing speed and efficiency.

Characteristics of classical management theory

Weber, Fayol, and Taylor had commonalities and overlaps with their management theories. They included:

  • Hierarchy and chain of command

  • Division of labour

  • A standardised approach to work

  • Centralisation of authority

  • Separation of personal and work life

  • The best people in the right jobs

  • Paying people fairly

The work of these three men and their theories on bureaucracy, scientific management, and administrative science come together to form the foundations of classical management theory. 

Today, we characterise classical management theory into four main features:

1. Organisational leadership hierarchy

Classical management theory holds three levels of organisational leadership hierarchy that oversee a workplace: top-level, mid-level, and low-level. 

The top level is the first level, containing business owners or executives. They hold the highest level of authority and are responsible for planning an organisation's long-term goals. The mid level is the middle management layer. This layer oversees managers and sets department-level goals and initiatives. The low level consists of managers, supervisors, and team leads who oversee daily operations. 

All three levels work in a coordinated way to achieve the best results.

2. Job specialisation

Job specialisation is a vital part of classical management. Also known as labour specialisation, it refers to the breakdown of different tasks that are assigned to specific job roles. Commonly known as an “assembly line view,” job specialisation and the division of labour is about breaking down large tasks into smaller, specific ones that are more quickly and efficiently accomplished.

Each employee has a job title with a specific list of tasks they are responsible for. Often, these tasks are specialised in a single area. This way of working reduces the need for multi-tasking and keeps work focused and productive.

3. Incentives as motivation

Classical management theory assumes that employees are motivated by financial rewards. It suggests that employees will work at their best if they are awarded incentives based on their performance, such as bonuses. Employees working optimally means increased efficiency and profit for the business.

4. Autocratic leadership

An autocratic leadership style is the cornerstone of classical management theory. It states that all decisions should sit with one leader who oversees, directs, and manages all business operations. These choices are then communicated through the ranks to the lower levels. This approach differs greatly from the more modern and preferred democratic leadership style.

Advantages of classical management theory

Interestingly, almost all management theories that come after classical management theory are a reaction against it. However, it's still relevant in manufacturing, food services, farming and production, or any other assembly-line heavy industries. 

That said, there are some strengths in classical management theory that many large organisations take influence from, including:

Clear role definitions 

Everyone in the workplace appreciates clarity on their role, including an overview of what they are accountable for and their day-to-day responsibilities. Knowing what's in your remit makes it easier to make decisions and crack on with your job, contributing to a well-organised and coordinated workplace. If you work with a Project Manager, you might, in addition to your role definition, also have a RASCI for specific projects. 

Standardised operations

Classical management theory emphasises standardised operations, including clear rules, job titles, job descriptions, and a uniform approach to tasks and processes. This is a huge asset to businesses, particularly matrix or functional organisations, as it enhances predictability, reduces errors, and streamlines operations.

Automation integration

Classical management theory is compatible with modern technological advancements, particularly the seamless integration of automation - including artificial intelligence (AI). Standardised processes and structured guidelines create fertile ground for incorporating cutting-edge tech into various organisational functions, which can help companies to maintain their competitive edge.

Disadvantages of classical management theory

Of course, classical management theory is too one-dimensional for the modern workplace, which requires more focus on human elements. Therefore, weaknesses of classical management theory include:

Neglect of modern management considerations

Classical management theory was influential in its prime during the 1700s, but the 21st Century has different requirements. The theory fails to address contemporary management considerations, such as job satisfaction and social needs. Overlooking human aspects of work in 2024 will only lead to disengagement and a lack of retention.

Lack of adaptability

Structure is a great thing in the workplace, particularly in large organisations. However, the structure that classical management theory suggests should be taken with a pinch of salt in modern workplaces, particularly in businesses with a flat organisational structure. 

Standardised processes may hinder adaptability and creative thinking, which are often sought after in modern, dynamic work environments. Plus, a business in a rapidly changing industry may experience challenges if bound by a rigid structure.

Limited view of employee motivation

Financial incentives will often motivate employees. However, assuming that money is the only driving factor is shortsighted. Staff may appreciate other employee benefits, such as critical illness cover or an employee assistance programme.

There are other less tangible incentives that staff appreciate too, such as recognition, a sense of purpose, or professional development opportunities.

Challenges to diversity and inclusion

An emphasis on standardisation may lead to challenges in fostering diversity and inclusion. If a process follows a uniform set of rules, it won't accommodate varied individual needs and backgrounds.

Potential for employee burnout

Focusing on optimal performance, efficiency, and productivity without consideration for employee welfare and other human needs may contribute to employee burnout. Prioritising the optimisation of processes and maximising output neglects essential aspects of employee wellbeing, such as job satisfaction and work-life balance.

When choosing your next job, it's important to consider the company's management style, size, and organisational structure. If you want to make sure your CV showcases the right traits for the company, submit your CV for a free review.

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