The advent of mass production, in the period during and following the Industrial Revolution in Europe and the United States, brought novel approaches and ideas as to how organisations were best managed.

The Classical School of management is thought to have originated around the turn of the century and dominated management thinking into the 1920s. It focused on the efficiency of the particular work process, and has been divided into three schools of thought. These include Bureaucratic management that focuses on rules and procedures, Scientific management which concentrates on the ‘best’ way in which a job can be done and Administrative management which has emphasised the need for the flow of information within the organisation.

Classical theorists considered workers and their needs as being secondary to the needs of the organisation and hence it has become an outdated form of management. Despite being outdated classical management theory remains of interest as it introduced management as a subject for analysis and provided ideas for the future development of management theory.

In this analysis Bureaucratic, Scientific and Administrative management theory will be evaluated and their contribution to our understanding of today’s organisations discussed.

Bureaucratic Management

Max Weber (1864-1920) was a German sociologist who first used the word bureaucracy to describe a particular form of management structure. He proposed a structure that was to provide maximal efficiency and stability. The six key elements of this were:

1. A hierarchical structure that has a clear chain of command with the higher positions having control over the lower positions. (Hierarchy)
2. Each employee was to have the expertise to complete a particular task. Labour available was divided and there was specialisation of skills. (Division of Labour)
3. All decisions and situations that could arise were to be governed by a complete and binding set of rules. (Formalisation)
4. The relationships between management and employees were to be impersonal. (Impersonality)
5. The recruitment and selection process was to be based around the applicants’ technical competence for the particular job or task he is to perform. (Selection)
6. Managers were to be viewed as having professional careers rather than being just owners in the company. (Career Orientation)

Bureaucracy became the accepted form of management structure in large public organisations, many semi state bodies and the civil service. The hierarchical structure allowed the development of a chain of command. The idea of a management career meant that the company gained continuity, efficiency was increased by the strict rules applied, a formal selection process gave recognition to merit and the division of labour also increased efficiency as expertise increase with repetition.

Disadvantages of this model include the lack of flexibility that it is able to tolerate. This clearly discourages individual initiative and innovation. The rigid rules and procedures make the organisation inflexible and slow to respond to changes in market forces. An emphasis on impersonal relations within an organisation leads to discontentment in a workforce and a policy of strict division of labour leads to a unmotivated and bored workforce. Overemphasis on rules and procedures may be made so important that the underlying objectives of the organisation may become secondary to the strict adherence to procedure.

In today’s world the remnants of bureaucratic structure remains in many organisations. This is a reflection of the strength of Weber’s suggestions. It remains of particular relevance to organisations that operate in particularly stable and secure environments, where change occurs infrequently and flexibility is less important than structure.

Scientific Management

The father of scientific management theory is Frederick Taylor (1856-1917). The theory of scientific management is concerned with the development of one best way to perform a task through the application of a scientific method. Taylor felt that management should ensure maximum prosperity for employer that should be coupled with the prosperity of the employee. Jobs were to be well designed so that each employee had a well-defined and controlled task, for which he was to follow specific procedures and methods. Prosperity was to be achieved through the scientific analysis of the one best method of performing a task to ensure that each employee was operating at his highest level.

Analysis of a workers task was shown to maximise output and benefit both organisation and individual employee during his work with the Bethlehem Steel Works Company. Here through the introduction of piece-rate pay system and scientific analysis of the tasks performed he showed that both productivity and workers salaries could be improved in a mutually beneficial manner.

His work developed four principles of scientific management:

1. Development of a true science of work.
Unofficial rules and assumptions regarding a task should be replaced with a scientific approach. This was to be a scientific assessment of tasks to be performed by employees and breaking them down into their specific components to determine the best way to perform them. Clarity would be provided to the employee of what the expectations of the job were and he would be paid a fair wage for his work. An employee could expect an improved wage for his work, however if he under performed he would lose income.
2. Scientific selection and development of workers.
The best person to perform the task would be selected by managers and they were to ensure that the best training was given. Utilising a piece to rate system of pay, both workers and managers would be rewarded by increased productivity.
3. Co-operation of management and workers.
Taylor advised co-operation between managers and their workers. He felt that this would ensure that the best person for a job did it using the best available methodology.
4. Division of work.
The worker was to be responsible only for the performance of the task in hand. Responsibility for the method was to lie with the manager. Managers were to direct operations and assign tasks and the workers were to simply carry them out.

Famously Henry Ford adopted this style of management in his car factory. The piece and rate pay system that this concept of management instigated gained much recognition as it linked effort to final reward. Whilst this strategy gained much acceptance and did lead in many instances to increased efficiency and productivity, it became evident over time that there were significant flaws with it. The assignment of workers to a repetitive task and the piece-rate system of pay assumed that the sole concern of the employee was wage related. This ignored other psychological needs of the worker, and the routine of repetitive task performance in a set and standardised manner lead to boredom and apathy amongst staff over longer periods of time.

Trade unions concerns, with this style of management, centred on the possible exploitation of the workforce under a piece-rate payment scheme. It was feared that jobs would be lost as a result of employees not meeting the targets set. Scientific management also concentrates on the functional tasks within an organisation and largely ignores the need to relate to an external dynamic environment.

Despite being largely outdated in today’s management process, scientific management established the principle of management being a specialised career. Solving the problems of efficiency and productivity has its roots in this original work. Today all organisations continue to have as their ultimate goal increased productivity and efficiency. This leads to an increased overall profit, from which both management and workforce may mutually benefit.

Administrative Management

Henry Fayol (1841-1925) was a French industrialist and one of the most influential early management thinkers. He spent his entire life working with one mining company where he rose from an apprentice to General Manager.

In contrast to Taylor, Fayol concentrated on the senior management of an organisation and concluded that there were 6 essential business activities. These areas were:- technical, commercial, financial, security, accounting and managerial. This gave recognition to management as a separate and distinct business activity. Administrative management suggested there were universal principles for senior managers that could be applied by them to solve all situations.

A managers five main activities he described as planning, organisation, command, co-ordination and control.

He also identified 14 basic principles of management based on his life times experience:

1. Division of labour.
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to general
7. Remuneration
8. Scalar chain
9. Order
10. Equity
11. Stability of Tenure
12. Initiative
13. Espirit de Corps
14. Centralisation

Rigid application of a set of rules and procedures was not part of his concept of management, rather he recognised the requirement of flexibility. These principles included room for individual initiative, efficiency, teamwork, clarity in command, the flow of information with good communication, and the idea that the general interest had to supersede the individual interest.

The five principles of management that Fayol recognised are closely related to the modern day principles of management. Modern teaching of management theory recognises the key management functions as being planning, organising, staffing, leading and controlling. Fayols ideas have endured the test of time more than other early management theorists and remain relevant in today’s organisation.