Classical Management Theory
Here we focus on three well-known early writers on management:
Definition of management: Management takes place within a structured organisational setting with prescribed roles. It is directed towards the achievement of aims and objectives through influencing the efforts of others.
Classical management theory
- Emphasis on structure
- Prescriptive about ‘what is good for the firm’
- Practical manager (except Weber, sociologist)
|1.Division of work||Reduces the span of attention or effort for any one person or group. Develops practice and familiarity|
|2. Authority||The right to give an order. Should not be considered without reference to responsibility|
|3. Discipline||Outward marks of respect in accordance with formal or informal agreements between firm and its employees|
|4. Unity of command||One man superior|
|5. Unity of direction||One head and one plan for a group of activities with the same objective|
|6. Subordination of individual interests to the general interest||The interests of one individual or one group should not prevail over the general good. This is a difficult area of management|
|7. Remuneration||Pay should be fair to both the employee and the firm|
|8. Centralisation||Is always present to a greater or less extent, depending on the size of the company and quality of its managers|
|9. Scalar chain||The line of authority from top to bottom of the organisation|
|10. Order||A place for everything and everything in its place; the right man in the right place|
|11. Equity||A combination of kindliness and justice towards the employees|
|12. Stability of tenure of personnel||Employees need to be given time to settle into their jobs, even though this may be a lengthy period in the case of the managers|
|13. Initiative||Within the limits of authority and discipline, all levels of staff should be encouraged to show initiative|
|14. Esprit de corps||Harmony is a great strength to an organisation; teamwork should be encouraged|
- Fayol was the first person to actually give a definition of management which is generally familiar today namely ‘forecast and plan, to organise, to command, to co-ordinate and to control’.
- Fayol also gave much of the basic terminology and concepts, which would be elaborated upon by future researchers, such as division of labour, scalar chain, unity of command and centralization.
- Fayol was describing the structure of formal organizations.
- Absence of attention to issues such as individual versus general interest, remuneration and equity suggest that Fayol saw the employer as paternalistic and by definition working in the employee’s interest.
- Fayol does mention the issues relating to the sensitivity of a patients needs, such as initiative and ‘esprit de corps’, he saw them as issues in the context of rational organisational structure and not in terms of adapting structures and changing people’s behaviour to achieve the best fit between the organisation and its customers.
- Many of these principles have been absorbed into modern day organisations, but they were not designed to cope with conditions of rapid change and issues of employee participation in the decision making process of organisations, such as are current today in the early 21st century.
Taylorism involved breaking down the components of manual tasks in manufacturing environments, timing each movement (‘time and motion’ studies) so that there could be a proven best way to perform each task. Thus employees could be trained to be ‘first class’ within their job. This type of management was particularly relevant to performance drives e.g ‘Action On’ projects.
This was a rigid system where every task became discrete and specialized. It is fair to suggest that this is unlikely to be of value to the NHS with the Modernisation agenda suggesting that we should have a flexible workforce.
Key points about Taylor, who is credited with what we now call ‘Taylorism’:
- he was in the scientific management school
- his emphases were on efficiency and productivity
- but he ignored many of the human aspects of employment
For the managers, scientific management required them to:
- develop a science for each operation to replace opinion and rule of thumb
- determine accurately from the science the correct time and methods for each job (time and motion studies)
- set up a suitable organisation to take all responsibility from the workers except that of the actual job performance
- select and train the workers (in the manner described above)
- accept that management itself be governed by the science deployed for each operation and surrender its arbitrary powers over the workers, i.e. cooperate with them.
For the workers, scientific management required them to:
- stop worrying about the divisions of the fruits of production between wages and profits.
- share in the prosperity of the firm by working in the correct way and receiving wage increases.
- give up their idea of time wasting and co-operate with the management in developing the science
- accept that management would be responsible for determining what was done and how
- agree to be trained in new methods where applicable
The benefits (mainly for the management) arising from scientific management can be summarised as follows:
- its rational approach to the organisational work enables tasks and procedures to be measured with a considerable degree of accuracy
- measurement of paths and processes provide useful information on which to base improvements in working methods, plant design, etc
- improving work methods brought enormous increases in productivity
- it enabled employees to be paid by results and to take advantage of incentive payments
- it stimulated management into adopting a more positive role in leadership at shop floor level.
- it contributed to major improvements in physical working conditions for employees
- it provided the formation for modern work studies
The drawbacks were mainly for the workers:
- it reduced the worker’s role to that of a rigid adherence to methods and procedures over which he/she had no discretion
- it led to increased fragmentation of work due to its emphasis on divisional labour
- it generated an economically based approach to the motivation of employees by linking pay to geared outputs
- it put the planning and control of workplace activities exclusively in the hands of the managers
- it ruled out any realistic bargaining about wage rates since every job was measured and rated ‘scientifically’
Therefore, in summary, while the scientific management technique has been employed to increase productivity and efficiency both in private and public services, it has also had the disadvantages of ignoring many of the human aspects of employment. This led to the creation of boring repetitive jobs with the introduction of systems for tight control and the alienation of shop floor employees from their managers.
Taylorism prevailed in the ’30s through to the early ’60s – and in many organisations considerably later than this. Peters and Waterman in the 70s/80 and Senge late ’80s/early ’90s led us towards what we now call ‘systems thinking’ where the rights and potential wider contributions of employees received considerably greater emphasis.
Bureaucracy in this context is the organisational form of certain dominant characteristics such as a hierarchy of authority and a system of rules.
Bureaucracy in a sense of red tape or officialdom should not be used as these meanings are value-ridden and only emphasize very negative aspects of the original Max Weber model.
Through analyses of organisations Weber identified three basic types of legitimate authority: Traditional, Charismatic, Rational-Legal.
Authority has to be distinguished from power in this discussion. Power is a unilateral thing – it enables a person to force another to behave in a certain way, whether by means of strength or by rewards. Authority, on the other hand, implies acceptance of the rules by those over whom it is to be exercised within limits agreeable to the subordinates that Weber refers to in discussing legitimate authority.
Weber presented three types of legitimate authority:
Traditional authority: where acceptance of those in authority arose from tradition and custom.
Charismatic authority: where acceptance arises from loyalty to, and confidence in, the personal qualities of the ruler.
Rational-legal authority: where acceptance arises out of the office, or position, of the person in authority as bounded by the rules and procedures of the organization.
It is the rational-legal authority form that exists in most organisations today and this is the form to which Weber ascribed the term ‘bureaucracy’.
The main features of bureaucracy according to Weber were:
- a continuous organisation or functions bounded by rules
- that individuals functioned within the limits of the specialisation of the work, the degree of authority allocated and the rules governing the exercise of authority
- a hierarchical structure of offices
- appointment to offices made on the grounds of technical competence only
- the separation of officials from the ownership of the organisation
- the authority was vested in the official positions and not in the personalities that held these posts. Rules, decisions and actions were formulated and recorded in writing.
It is not coincidence that Weber’s writings were at a time of the major industrial revolutions and the growth of large complex organisations out of the cottage industries and/or entrepreneurial businesses.
The efficiency of this rational and logistical organisation shares a considerable amount of common ground with the thinking of Fayol. In particular, features such as scalar chain, specialisation, authority and the definition of jobs which were so essential to successful management as described by Fayol, are typical of bureaucracy. There is also little doubt that Weber’s ideas concerning specific spheres of competence and employment based on technical competence would have considerable appeal for Taylor’s scientific managers.
- Appointment, promotion and authority were dependent on technical competence and reinforced by written rules and procedures of promoting those most able to manage rather than those favoured to manage. We take a lot of this for granted in the UK today. Anything else is regarded as nepotism and corruption.
- The adoption of bureaucratic type of management systems allow organisations to grow into large complex organised systems that are focused towards formalised explicit goals.
- It cannot be stated strongly enough that the Weber theory has the advantage of being used as a ‘gold standard’ on which to compare and develop other modern theories.
Subsequent analysis by other researchers have identified many disadvantages:
- Tendency for organisations to become procedure dominated rather than goal dominated.
- Tendency for heavily formalised organisational roles to suppress initiative and flexibility of the job holders.
- Rigid behaviour by senior managers can lead to standardised services that do not meet the needs of the client.
- Rigid procedures and rules are demotivating for the subordinates that work in the organizations.
- Exercise of control based on knowledge as advocated by Weber has led to the growth of ‘experts’ whose opinions and attitudes may frequently clash with those of the more generalised managers and supervisors.
Elton Mayo: Hawthorns studies
Where Classical theorists were concerned with structure and mechanics of organisations, the theorists of human relations were, understandably, concerned with the human factors.
The foci of human relations theory is on motivation, group motivation and leadership.
At the centre of these foci are assumptions about relationship between employer and employee. Best summarised by Schein (1965) or Elton Mayo
- they were academic, social scientists
- their emphasis was on human behaviour within organisations
- they stated that people’s needs are decisive factors in achieving an organisation’s effectiveness
- they were descriptive and attempted to be predictive of behaviour in organisations
A ‘motive’ = a need or driving force within a person.
The process of motivation involves choosing between alternative forms of action in order to achieve some desired end or goal
Alternative forms of action of motivation depend on a manager’s assumptions about his/her subordinates:
|1. Rational- economic man||Self interest and maximisation of gain||Basis of Classical, especially, Taylor/Scientific theory|
|2. Social man||Social need, being part of a group||Basis of Mayo|
|3. Self actualising man||Self-fulfilment of individual||Maslow, Likert, McGregor, Argyris, Herzberg|
|4. Complex man||Depends on individual, group, task||‘Systems approach’|
Elton Mayo : Hawthorne Studies
The ground-breaking Hawthorne studies carried out in the Hawthorne plant of the Western Electric Company (USA) 1927 – 32.
Stage 1 (1924 -27)
Study of the physical surroundings (lighting level) on productivity of workers. Control group and experimental group previously had similar productivity before study began
Control Group = constant lighting level
Experimental Group = varied lighting level
Both groups productivity increased – even when experimental group was working in dim light
Product leader called Mayo and colleagues to explain
Stage 2 (1927 – 29) ‘Relay assembly room stage’
Still analysing effect of physical surroundings (rest, pauses, lunch break duration, length of working week) on output
Output increased even when worsening conditions
Hypothesis was now that it was the attitudes of subjects at work and not the physical conditions. This gave rise to the ‘Hawthorne Effect’ – employees were responding not so much to changes in the environment as to the fact they were the centre of attention – a special group.
Stage 3 (1928 – 30)
A Total of 20,000 interviews were collected with the workers on employee attitudes to working conditions, their supervision and their jobs.
Stage 4 (1932) ‘Bank winning observation room’
This time the new subjects (14 men) put in separate room for six months
Productivity restricted due to pressure from peers to adopt a slower rate to circumvent company wages incentive scheme to generally adopt own group rules and behaviour
- first real attempt to undertake genuine social research in industrial setting
- individuals cannot be treated in isolation, but function with group members
- that individual motivation did not primarily lie in monetary or physical condition, but in need and status in a group
- the strength of informal (as opposed to formal) groups demonstrated a behaviour of workers (formal supervisors were powerless in Stage 4)
- it highlighted need for supervisors to be sensitive and cater for social needs of workers within the group
- from 1930s -1950s some doubt was cast on the increased applicability of these theories to every day working life
Maslow is often-quoted still today, having developed a seminal theory of the needs of human beings. Herzberg’s and McGregor’s neo-human relations theories both focus on motivation and leadership, but their theories are, as we shall see, very different.
In this group we find a particular focus on human motivation including:
- This psychologist, from his studies, proposed a hierarchy of human needs building from basic needs at the base to higher needs at the top.
- Maslow made assumptions that people need to satisfy each level of need, before elevating their needs to the next higher level e.g. a hungry person’s need is dominated by a need to eat (i.e survival), but not to be loved, until he/she is no longer hungry.
- Today the focus in most Western societies is on the elements towards the top of Maslow’s hierarchy – in which work environments and ‘jobs’ (including ‘having a job’ and the satisfaction or otherwise such jobs provide – have become typical features. Notably the attainment of self-esteem and, at the very top of the hierarchy, what Maslow calls ‘self-actualisation’ – fundamentally the synthesis of ‘worth’, ‘contribution’ and perceived ‘value’ of the individual in society.
- Managers can/should consider the needs and aspirations of individual subordinates.
- The broad assumptions in 2 above have been disproved by exceptions e.g. hungry, ill artist working in a garret.
- Empirical research over the years has not tended to support this theoretical model.
Regarding monetary reward, sometimes beyond certain level of pays (e.g. consultant) other things become more important than another £1000 a year
e.g. working conditions, boss, environment etc.
Managers were perceived by McGregor, whose theories are still often quoted, to make two noticeably different sets of assumptions about their employees.
|Theory X (essentially ‘scientific’ mgt)||Theory Y|
|Avoid responsibility||Accept/seek responsibility|
|Therefore need control/coercion||Need space to develop imagination/ingenuity|
|Schein type: ‘rational economic man’||Schein type: ‘self-actualising man’|
- Identifies two main types of individual for managers to consider and how to motivate.
Only presents two extremes of managerial behaviour.
200 engineers and accountants were asked to recall the times/occasions when they experienced satisfactory and unsatisfactory feeling about their jobs. Later this also involved manual and clerical staff similar results claimed:
Herzberg showed two categories of findings:
Motivators – factors giving rise to satisfaction
Hygiene factors – factors giving rise to dissatisfaction
|Important Motivators||Important Hygienes|
|Achievement||Company policy and recognition|
|Recognition||Supervision – the technical aspects|
|Responsibility||Interpersonal relations – supervision|
- Herzberg’s work led to a practical way to improve motivation, which had, up to that point, been dominated by Taylorism (salary, wages). In particular ‘ job enrichment’ programs mushroomed. The aim of these was to design work and work structures to contain the optimum number of motivators.
- This approach counters the years of Taylorism, which sought to break down work into its simplest components and to remove responsibility from individuals for planning and control.
- There remain doubts about Herzberg’s factors applicability to non-professional groups, despite the fact that some of his later studies involved the clerical and manual groups. The numbers were in these categories though were small and many researchers still argue about the results in these groups.
- Social scientists argue about the validity of his definition of ‘job satisfaction’
Four main patterns:
Essentially Likert’s work gives more alternatives in the spectrum between Theory X and Theory Y of McGregor
- criticised for being based more on theory than empirical practice. Therefore not widely accepted by practising managers.
Studied the needs of people and the needs of organisation. He felt that classical models of organisation promoted ‘immaturity’ (see below). He felt that it was important to understand the needs of people and integrate them with needs of organisation. Only in this way, he said, can employees become co-operative rather than defensive or aggressive
- Argyris is moving here towards a ‘contingency approach’ i.e. remedy depends on diagnosing problems first
- He presents a spectrum rather than bipolar patterns of employees behaviour could be expected from immaturity to maturity. Certain behaviours of employees may be preferred
- Still too centred around ‘self -actualising man’. Viewed not to be applicable to production lines with manual workers, workers in sterile supplies, people manning phone helplines etc whose needs are perceived to be typically lower in Maslow’s hierarchy of needs
Attention began to focus on organisations as ‘systems’ with a number of inter-related sub-systems. The ‘systems approach’ attempted to synthesise the classical approaches ( ‘organisations without people’) with the later human relations approaches that focused on the psychological and social aspects, emphasised human needs – almost ‘people without organisations’.
Systems theory focuses on complexity and interdependence of relationships. A system is composed of regularly interacting or interdependent groups of activities/parts that form the emergent whole.
Part of systems theory, system dynamics is a method for understanding the dynamic behaviour of complex systems. The basis of the method is the recognition that the structure of any system — the many circular, interlocking, sometimes time-delayed relationships among its components — is often just as important in determining its behaviour as the individual components themselves.
Early systems theorists aimed at finding a general systems theory that could explain all systems in all fields of science. The term goes back to Bertalanffys basic work ‘General Systems Theory’. Sociologists like Niklas Luhmann also worked towards a general systems theory. As of today, whilst no systems theory can live up to this claim, there are general system principles which are found in all systems. For example, every system is an interaction of elements manifesting as a whole. Miller and Rice likened the commercial and industrial organisation to biological organisms.
Systems theories took much more of an holistic view of organisations, focusing on the total work organisation and the inter-relationships between structures and human behaviours producing a wide range of variables within organisations. They help us understand the interactions between individuals, groups, organizations, communities, larger social systems, & their environments and help us enhance our understanding of how human behaviour operates in a context.
A system is a part, and it is a whole, at the same time.
An example of this in the Modern NHS is care pathways for patients which will often require a range of health disciplines to work together and will often also include professionals from social services or the local authority as well.
System Theory Key Terms:
Boundary – an imaginary line around system of focus. Regulates flow of energy (e.g. information, resources) into & out of the system.
Focal system – the system on which you are concentrating at any given time (eg: a manufacturing plant or a family).
Subsystem – a part of the focal system (e.g., in a family, it may be children or parents) , sometimes referred to as ‘sibling subsystem’ & ‘parental subsystem’).
Suprasystem – is external to focal system; it is its environment. May include place of employment, school, neighbourhood, church, social service system.
Open system – Relatively open systems have a freer exchange of information and resources within the system and also allow relatively free passage of energy from and to the outside of the system.
Closed system – is more self-contained & isolated from their environment.
The business organisation is an Open System: there is continual interaction with the broader external environment of which it forms a part, The systems approach considers the organisation within its total environment and emphasises the importance of ‘multiple channels of interaction’. Thus the systems approach views organisations as a whole and involves the study of the organisation in terms of the relationship between technical and social variables with the systems. Thus changes in one part, technical or social, will affect other parts and therefore the whole system.
It was Trist and others at the Tavistock Institute of Human relations who focused in on socio-technical systems arising from their study of the effects of changing technology in the coal-mining industries in the 1940s.
The following Timeline gives an interesting perspective to the development of Systems Theory:
- 1950 General Systems Theory (founded by Ludwig von Bertalanffy)
- 1960 cybernetics (W. Ross Ashby, Norbert Wiener) Mathematical theory of the communication and control of systems through regulatory feedback. Closely related: “control theory“
- 1970 catastrophe theory (René Thom, E.C. Zeeman) Branch of mathematics that deals with bifurcations in dynamical systems, classifies phenomena characterized by sudden shifts in behavior arising from small changes in circumstances.
- 1980 chaos theory (David Ruelle, Edward Lorenz, Mitchell Feigenbaum, Steve Smale, James A. Yorke) Mathematical theory of nonlinear dynamical systems that describes bifurcations, strange attractors, and chaotic motions.
- 1990 complex adaptive systems (CAS) (John H. Holland, Murray Gell-Mann, Harold Morowitz, W. Brian Arthur,). The “new” science of complexity which describes emergence, adaptation and self-organization, all of which are basic system principles, was established mainly by researchers of the Santa Fe Institute (SFI). It is based on agents and computer simulations and includes multi-agent systems (MAS) which have become an important tool to study social and complex systems. CAS are still an active field of research.
- organisation is an ‘open system’ with environment
- organisations are complex systems of people, task, technology
- technological environmental factors are just as important as social/psychological
From the late 1950s, a new approach to organisation theory was developed which became known as contingency theory. This theory argues that there is no ‘one best way’ to structure an organisation. An organisation will face a range of choices when determining how it should be structured, how it should be organised, how it should be managed. Successful organisations adopt structures that are an appropriate response to a number of variables, or contingencies, which influence both the needs of the organisation and how it works.
- these theories take a comprehensive view of people in organisations
- they recommend a diagnosis of people/ task/ technology/environment – then suggest the development of appropriate solutions
- if there is no ‘one best way’, then even apparently quite similar organisations, for example, two nearby colleges, may choose significantly different structures and still survive, be reasonably successful in achieving their missions, and so on
- if different parts of the same organisation are influenced in different ways by the contingencies bearing upon them, then it may be appropriate for them to be structured differently, for example, one university department may have a functional structure, whilst another may have a matrix structure
- Bertalananffy L. von ‘Problems of General Systems Theory : A New Approach to the Unity of Science’ Human Biology, vol 23,no 4, December 1951 Pgs 302-312
- Luhmann N. ‘Social Systems’, Frankfurt, Suhrkamp, 1994
- Miller E.J and Rice A.K ‘Systems of Organization’, Tavistock Publications (1967)
- Schein EH, Bennis WG. Personal and Organizational change through Group Methods: The laboratory approach. New York: John Wiley & Sons, 1965.
- Trist E.L et al ‘Organizational Choice’, Tavistock Publications (1963)