Classical organization theory grew out of the need to find guidelines for managing such complex organizations as factors.
Henri Fayol
Henri Fayol (1841-1925) is generally hailed as the founder of the classical management school not because he was the first to investigate managerial behavior, but because he was the first to systematize it. Fayol believed that sound management falls into certain patterns that can be identified and analyzed. From this basic insight, he drew up a blueprint for a cohesive doctrine of management, one that retains much of its force to this day.
With his faith in scientific methods, Fayol was like Taylor, his contemporary. While Taylor was basically concerned with organizational functions, however, Fayol was interested in the total organization and focused on management which he felt had been the most neglected of business operations. Fayol listed 14 principles of management most frequently to be applied. Before Fayol, it was generally believed that managers are born, not made. Fayol insisted, however, that management was a skill like any other one that could be taught once its underlying principles were understood.
Fayol’s 14 principles of organization (he called them principles of management):
- Specialization of labor. Specializing encourages continuous improvement in skills and the development of improvements in methods.
- Authority. The right to give orders and the power to exact obedience.
- Discipline. No slacking, bending of rules.
- Unity of command. Each employee has one and only one boss.
- Unity of direction. A single mind generates a single plan and all play their part in that plan.
- Subordination of Individual Interests. When at work, only work things should be pursued or thought about.
- Remuneration. Employees receive fair payment for services, not what the company can get away with.
- Centralization. Consolidation of management functions. Decisions are made from the top.
- Scalar Chain (line of authority). Formal chain of command running from top to bottom of the organization, like military
- Order. All materials and personnel have a prescribed place, and they must remain there.
- Equity. Equality of treatment (but not necessarily identical treatment)
- Personnel Tenure. Limited turnover of personnel. Lifetime employment for good workers.
- Initiative. Thinking out a plan and do what it takes to make it happen.
- Esprit de corps. Harmony, cohesion among personnel.
Max Weber
Reasoning that any goal-oriented organization consisting of thousands of individuals would require the carefully controlled regulation of its activities, the German sociologists Max Weber (1864-1920) developed a theory of bureaucratic management that stressed the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority. He considered the ideal organization to be a bureaucracy whose activities and objectives were rationally thought out and whose divisions of labor were explicitly spelled out. Weber also believed that technical competence should be emphasized and that performance evaluations should be made entirely on the basis of merit.
Today we often think of bureaucracies as vast, impersonal organizations that put impersonal efficiency ahead of human needs. We should be careful, though, not to apply our negative connotations of the word bureaucracy to the term as Weber used it. Like the scientific management theorists, Weber sought to improve the performance of socially important organizations by making their operations predictable and productive. Although we now value innovation and flexibility as much as efficiency and predictability, Weber’s model of bureaucratic management clearly advanced the formation of huge corporations such as Ford. Bureaucracy was a particular pattern of relationships for which Weber saw great promise.
Although bureaucracy has been successful for many companies, in the competitive global market of the 1990s organizations such as General Electric and Xerox have become “bureaucracy busters”, throwing away the organization chart and replacing it with ever changing constellations of teams, projects and alliances with the goal of unleashing employee creativity.
