Classical Management Theory

Summary

This script explores the foundations of classical management theory, emerging as a response to the Industrial Revolution's rapid changes in work dynamics. It delves into the context of the era, highlighting the importance of power, machinery, and transportation. The script introduces the key figures Max Weber, Frederick Taylor, and Henri Fayol, who contributed significantly to the theory with their ideas on bureaucracy, scientific management, and administrative science. It concludes by discussing the ongoing relevance of classical management theory in various sectors, despite the evolution of organizational studies and the rise of alternative approaches.

Takeaways

• 🏭 Classical management theory emerged as a response to the Industrial Revolution, which brought about significant changes in the way people worked and the rapid growth of large factories.
• 🔧 The Industrial Revolution was characterized by the use of power, such as steam and hydropower, to run manufacturing machines, leading to increased efficiency and production speed.
• 🚂 Transportation advancements, including railroads and steamboats, played a crucial role in the Industrial Revolution by connecting cities and facilitating the movement of goods.
• 🤔 The rapid industrial changes led to new organizational challenges, prompting questions about how to effectively organize and manage large groups of people working alongside machinery.
• 👨‍🏫 Max Weber is known for the concept of bureaucracy, advocating for a legal-rational approach to organizing where authority is tied to official positions within a hierarchy.
• 🔬 Frederick Taylor introduced scientific management, focusing on applying science to work to standardize tasks and improve efficiency through time and motion studies.
• 📚 Henri Fayol contributed the theory of administrative science, emphasizing the need for systematic training of managers and outlining key management activities such as planning, organization, command, coordination, and control.
• 🔗 All three theorists—Weber, Taylor, and Fayol—shared common elements in their approaches, including a clear hierarchy, division of labor, standardized work, centralization of authority, and separation of personal life from organizational life.
• 💼 The classical management theory has been foundational to organizational studies and has influenced almost all subsequent theories and practices in management.
• 🛠️ Classical management theory remains relevant today, especially in manufacturing, warehouses, delivery services, food service, and farming, where production line processes are prevalent.
• 🌐 While classical management principles are still applicable in many settings, knowledge-based and information-based companies like Google and Facebook may adopt alternative approaches that are more reflective of modern work environments.

Q & A

What was the context for the emergence of classical management theory?

Classical management theory emerged as a reaction to the Industrial Revolution, which took place from the late 1700s to late 1800s. It was a time of rapid change in the way people worked, with the shift from farms to factories and the growth of large companies.

What were the three main ingredients that sparked the Industrial Revolution?

The three main ingredients that sparked the Industrial Revolution were power (specifically steam power and hydropower), machinery innovations, and advancements in transportation, such as railroads and steamboats.

What is the significance of the cotton gin invented by Eli Whitney in 1793?

The cotton gin, invented by Eli Whitney in 1793, was significant because it separated the seed from cotton much more quickly than could be done by hand, thus speeding up work and contributing to the efficiency of the textile industry.

What are the three primary classical management theories discussed in the script?

The three primary classical management theories discussed are the bureaucratic approach by Max Weber, the scientific management approach by Frederick Taylor, and the administrative science or classical management theory by Henri Fayol.

What does the term bureaucracy mean in the context of Max Weber's theory?

In the context of Max Weber's theory, bureaucracy refers to an organizational structure that resembles an extension of government and the legal system, emphasizing a legal-rational approach to organizing with clear rules and standardized guidelines.

How did Frederick Taylor's scientific management approach differ from traditional work practices?

Frederick Taylor's scientific management approach differed by applying science to work, focusing on time and motion studies to determine the most efficient way to perform tasks, as opposed to the customized and often inefficient methods used traditionally.

What was the main focus of Henri Fayol's administrative science theory?

Henri Fayol's administrative science theory focused on the management side of organizations, emphasizing the need for managers to be trained in a systematic approach and outlining key management activities such as planning, organization, command, coordination, and control.

What are the common elements among the classical management theories of Weber, Taylor, and Fayol?

The common elements among the classical management theories include a clear hierarchy and chain of command, division of labor, standardized approach to work, centralization of authority, separation of personal life from organizational, and the selection of the best employees based on qualifications and performance.

How is the classical management theory still relevant today?

Classical management theory is still relevant today, particularly in manufacturing, warehouses, delivery services, food service, and farming. It provides a foundation for organizational structure and efficiency, even though some modern companies may adapt or react against it.

What is the significance of the classical management theory in the development of subsequent organizational studies?

The classical management theory is significant as it serves as the great-grandparent of organizational studies. Almost all theories that came after it are reactions against or responses to the classical management approach, showing its enduring influence on the field.

How did the classical management theory address the issues of favoritism and particularism in organizations?

The classical management theory addressed issues of favoritism and particularism by advocating for standardized guidelines for hiring and firing, and by promoting the separation of personal life from organizational life, ensuring that employees are selected and paid based on qualifications and performance rather than personal relationships.

Outlines

00:00

🏭 The Emergence of Classical Management Theory

This paragraph introduces classical management theory as a response to the Industrial Revolution, which occurred from the late 1700s to late 1800s. It discusses the significant changes in work dynamics, such as the shift from farms to factories and the introduction of steam and hydropower. Innovations like Eli Whitney's cotton gin and advancements in transportation, including railroads and steamboats, are highlighted as catalysts for the revolution. The paragraph also addresses the new challenges faced by organizations, such as managing large groups of people working with machinery and the need for effective organizational strategies. It introduces three key figures in classical management theory: Max Weber, Frederick Taylor, and Henri Fayol, who are credited with providing early frameworks for organizational management.

05:02

👨‍💼 Contributions of Classical Management Theorists

The second paragraph delves into the specific contributions of the three classical management theorists. Max Weber is noted for his concept of bureaucracy, advocating for a legal-rational approach to organizing where authority is based on official positions within a hierarchy. Frederick Taylor is recognized for his scientific management approach, which involved time and motion studies to standardize tasks and improve efficiency, exemplified by his work in bricklaying that increased productivity by 300%. Henri Fayol is highlighted for his mid-level management focus, proposing the theory of administrative science, which emphasized the need for systematic management training. Fayol's principles included planning, organization, command, coordination, and control, which are foundational in management theory. The paragraph also points out common themes among the theorists, such as the importance of hierarchy, division of labor, standardization, centralization of authority, and the separation of personal life from organizational duties.

10:02

🔍 Relevance of Classical Management Theory Today

The final paragraph assesses the continued relevance of classical management theory in contemporary organizations. It acknowledges the theory's pervasive influence, particularly in manufacturing, warehouses, delivery services, food service, and farming. The paragraph contrasts classical management with newer organizational approaches found in knowledge-based companies like Google and Facebook, which may not adhere to classical management principles but are still influenced by them. The conclusion is that classical management theory remains relevant and influential, directly or indirectly, in many workplaces, despite the emergence of alternative management strategies.

Keywords

💡Classical Management Theory

Classical Management Theory refers to the foundational principles of organizational management that emerged as a response to the Industrial Revolution. It is the 'great-grandparent' of organizational studies, emphasizing efficiency and structure within organizations. The video script discusses this theory as the basis for understanding how work was organized and optimized during the rapid changes of the Industrial Revolution, with contributions from figures like Max Weber, Frederick Taylor, and Henri Fayol.

💡Industrial Revolution

The Industrial Revolution, which occurred from the late 1700s to late 1800s, marked a period of significant change in the way people worked, characterized by the shift from manual labor to machine-based manufacturing. The script describes this era as the catalyst for the development of classical management theory, as it necessitated new ways to organize and manage the workforce in burgeoning factories and industries.

💡Power

In the context of the video, 'power' specifically refers to the energy sources like steam and hydropower that drove the machinery of the Industrial Revolution. It is one of the three key ingredients, along with machinery and transportation, that sparked the rapid changes in industry. The script uses the analogy of a bicycle versus a motorcycle to illustrate the dramatic increase in work efficiency due to these power sources.

💡Machinery Innovations

Machinery Innovations such as the cotton gin invented by Eli Whitney in 1793 represent the technological advancements that facilitated the Industrial Revolution. These innovations are highlighted in the script as key to speeding up work processes and contributing to the efficiency that classical management theory sought to systematize and optimize.

💡Transportation

Transportation played a crucial role in the Industrial Revolution, with developments like railroads and steamboats connecting cities and improving the movement of goods. The script emphasizes the importance of transportation in the context of classical management theory, as it was an essential component in the rapid expansion and efficiency of industries.

💡Max Weber

Max Weber is one of the founding fathers of classical management theory, known for his concept of bureaucracy. The script discusses Weber's ideas on organizing work in a legal-rational manner, emphasizing a clear hierarchy and the separation of personal influence from official organizational roles, which is central to understanding the bureaucratic approach to management.

💡Frederick Taylor

Frederick Taylor, another key figure in classical management theory, is renowned for his approach called scientific management. The script describes Taylor's focus on micro-level efficiency, using time and motion studies to standardize tasks and improve productivity, which is a direct application of scientific principles to work processes.

💡Henri Fayol

Henri Fayol contributed to classical management theory with his administrative science, focusing on the management side of organizational operations. The script outlines Fayol's 14 principles of management, which include planning, organization, command, coordination, and control, and how these principles are integral to the mid-level approach to managing people within an organization.

💡Hierarchy

Hierarchy in the context of classical management theory refers to the structured levels of authority within an organization. The script mentions the clear hierarchy as a common element among the theories of Weber, Taylor, and Fayol, which is essential for maintaining order and facilitating the chain of command for efficient management.

💡Division of Labor

Division of Labor is a concept within classical management theory that suggests breaking down tasks into specialized roles to increase efficiency. The script touches on this idea as a standard approach to work, where each worker has a specific role, contributing to the overall productivity of the organization.

💡Relevance

The script discusses the relevance of classical management theory in contemporary organizations, particularly in manufacturing, warehouses, delivery services, and food service industries. It suggests that while the theory may not be universally applicable, especially in knowledge-based companies, its principles continue to influence many workplaces directly or indirectly.

Highlights

Classical management theory emerged as a response to the Industrial Revolution, addressing new challenges in work organization and productivity.

The Industrial Revolution led to a shift from farms to factories and small shops to large companies.

Power, machinery, and transportation were key ingredients that sparked the Industrial Revolution.

Inventions like the cotton gin by Eli Whitney in 1793 revolutionized the speed of work.

The development of railroads and steamboats marked a significant improvement in transportation during the Industrial Revolution.

Max Weber introduced the concept of bureaucracy, emphasizing a legal-rational approach to organizational structure.

Frederick Taylor's scientific management focused on optimizing work tasks through time and motion studies.

Henri Fayol contributed to management theory with his administrative science, emphasizing systematic management training.

Fayol's 14 principles of management include planning, organizing, commanding, coordinating, and controlling.

Classical management theory advocates for a clear hierarchy, division of labor, and standardized work approaches.

The theory supports the separation of personal life from organizational to prevent favoritism and ensure merit-based hiring.

Taylor and Fayol discussed the importance of fair pay and profit-sharing to attract and retain top talent.

Classical management theory remains relevant in manufacturing, warehouses, delivery services, food service, and farming.

Modern knowledge-based companies like Google and Facebook have organizational structures that often react against classical management principles.

Despite the rise of alternative management approaches, classical management theory continues to influence many workplaces indirectly.

Transcripts

- [Alex] Classical management theory is like

the great-grandparent of organizational studies.

We're gonna look at the context at the time it emerged,

the three primary theories that generally make it up,

and talk about whether or not it's still relevant today.

(gentle music)

So first, let's look at the context at the time.

This came about as a reaction to the Industrial Revolution

which is the late 1700s to late 1800s.

Industry equals work, revolution equals rapid change,

big changes in the way people worked,

the rapid explosion of big factories.

That's what was happening at the time.

People were moving from farms to factories,

from small shops to large companies.

One of the main sparks or ingredients

of the Industrial Revolution was power,

steam power and hydropower specifically.

The machines used to manufacture

in these new large factories were run on power,

not by hand.

It's like the difference between a bicycle

and a motorcycle.

This sped up work dramatically

and helped factories grow very quickly.

There were also some machinery innovations

inside of these factories.

For example, in *1793* [correction] Eli Whitney invented the cotton gin.

Gin is just short for engine.

It was a little apparatus

that separated the seed from the cotton

much more quickly than could be done by hand,

and inventions and innovations like the cotton gin

and other machines sped up work even further.

Transportation was also booming at the time.

That's another key ingredient of the Industrial Revolution,

like the railroads.

They connected most cities in the U.S.

by the mid-1800s.

Steamboats started to catch on around 1800 as well,

and the roads were improving in general.

This rapidly changing context created a great need.

The three ingredients, power, machinery, and transportation,

came together to spark the Industrial Revolution.

There were a lot of emerging issues at the time

that people needed to grapple with.

They were new.

Large groups of people working together,

people working alongside machinery,

the pace of industry was speeding up very quickly,

and companies were looking for more effective ways

to handle their new challenges.

These issues prompted a lot of new questions.

For example, how are we gonna organize all this?

How are we going to maximize productivity

with all these changes?

And how are we going to manage

all of these people working together?

And we're gonna look at three people

that answered these questions

pretty effectively at the time:

Max Weber, Frederick Taylor, and Henri Fayol.

In general, when we talk about these three guys,

we're talking about the founding fathers

of the classical management theory,

and these are the three names you're going to see

in most textbooks on the topic.

So let's start with Max Weber.

He's most known for the term bureaucracy,

which, to him, meant the organization

should look like an extension of government

and the legal system.

He wanted a legal-rational approach to organizing.

That meant that he didn't wanna follow

the traditional family-type system

where the head of the family was in charge,

or perhaps you had a charismatic type of leader.

He thought these were not the right way

to run large organizations,

and he wanted a legal-rational approach

where he saw each person's authority

and should be tied to his or her official position

in the organizational hierarchy.

In other words, if you're in a job,

your responsibilities are tied to that position,

and if you leave that job,

you don't keep all that influence and power.

Whoever the new person is is responsible.

So this was his way of balancing power

and keeping things rational and organized.

He wanted clear rules that governed performance

and standardized guidelines for hiring and firing.

So he was really concerned about issues

of favoritism or what he called particularism,

and he wanted to hire the best people

to work in organizations and organize them

in a logical, sensible way.

Max Weber was a big picture type of thinker

compared to the two others we'll look at today,

and that big picture term is bureaucracy.

Frederick Taylor also entered the discussion,

and unlike Max Weber who was very big picture,

Frederick Taylor is much more micro in his focus.

He used the term scientific management for his approach.

To him, this meant applying science to work.

Specifically, he thought that the customized approach

was very inefficient.

He saw a lot of factories

and people basically all doing things their own way.

However they wanted to do their particular job

in that organization, they could,

and he thought this was not efficient.

This was not the best way to do jobs.

So he said let's do time and motion studies

to study how much time every single little task should take

and how many motions every single little task should take,

and we can speed things up

and come up with the one right way.

So each task was broken down into very small steps

and standardized to the one right way,

and so, he would go into an organization,

look at all of the inefficiencies,

and figure out the one right way to do every single job,

and his results were actually pretty impressive.

For example, when he went into a bricklaying organization,

they were laying brick down

and they were bending over to pick them up,

and he thought it was all very inefficient.

So he came up with a system

where the bricks were all right at hand level,

and they were up on a shelf,

and people didn't have to bend over to pick them up,

and he made some other changes to their time

and the way they used their motions,

and he sped it about 300%.

So now, one bricklayer could put down as many bricks

as it took three to do in the past,

so his work was pretty dramatic

and successful in some ways.

So Max Weber took a big picture, bureaucratic approach.

Frederick Taylor took a micro level approach

to looking at the specific tasks,

and Henri Fayol, or Henri in the French, Fayol,

took a mid-level approach.

He was looking at the management side of things.

How shall we manage people?

That was the big question that he wondered about.

He put forward a theory of management

called administrative science,

or sometimes, just called classical management,

and he believed that managers needed to be trained

in a much more systematic approach.

He didn't really see any good theories out there

for how we should train managers,

and so, he wanted to contribute to that discussion.

In fact, he wrote, It is a case of setting it going,

starting general discussion.

That is what I am trying to do by publishing this survey,

and I hope a management theory will emanate from it.

So he wrote a book that then became popular

in the late 1940s.

In a section of that book,

he talked about the management activities

that managers should be pretty competent at,

and this is a list that you'll see

in many textbooks on the topic.

He thought we needed good planning,

that managers should look ahead and chart a course

for the organization.

He also thought that organization

was a key management activity.

They need to select and arrange people

in an orderly and efficient fashion.

He wanted the manager to be in command.

In other words, to oversee, to lead,

and to drive the process but to stay out of the details.

That was up for the regular workers.

Managers should also be good at coordination,

needed to harmonize and facilitate the general activities

of different departments and groups

in the overall organization,

and lastly, control.

The manager needed to ensure compliance on everything,

from accounting, finance, the technical side,

quality control, and other areas.

Like I said, this is a list you're gonna see

in a lot of classical management sections of books

when they talk about Henri Fayol.

In addition to the details we talked about for Weber,

Taylor, and Fayol,

there are also some common elements

that they really all wrote about in one way or another

that bring them together.

They all wanted a clear hierarchy in an organization,

that chain of command.

They all wanted some form of division of labor.

They wanted a standardized approach to work.

They wanted the centralization of authority,

largely in the manager's hands.

They wanted the separation of personal life

from organizational.

They all really wanted the best people in the right jobs,

and that was one of the reasons why

they wanted to separate personal life from organizational,

so people didn't pay favorites.

In other words, they wanted to select the best employees

based upon qualifications and performance,

and they also, by the way, wanted people paid fairly,

at least in theory.

Frederick Taylor and Henri Fayol talked specifically

about paying good employees, your best people, more

so you can attract and keep your best

and most talented people.

Henri Fayol even talked about profit-sharing

which was pretty innovative at the time,

and I say at least in theory

because not a lot of organizations

necessarily took this advice,

but these researchers did write about that.

So Weber, Taylor, and Fayol all come together

to form a foundation of what we call

classical management theory,

and this is an approach you're going to see

in a lot of textbooks

because it really has become the great-grandparent

of organizational studies.

Almost everything that comes after

the classical management era

is a reaction against it.

So if you see human resources or human relations

or systems theory or team approach,

these are all responses to or a reaction against

classical management,

and it's difficult to imagine an organization

that's not influenced by this approach

in one way or another, even today.

So is it still relevant today?

Well, absolutely.

You see in a lot of places, especially in manufacturing,

and even though we might not think that manufacturing

is still happening as much in the United States,

it's absolutely still happening in the United States

and all over the world.

We have more than seven billion people on the planet.

We're making a lot of things,

and you still see this approach

in a lot of manufacturing companies.

You see it in warehouses and delivery services like Amazon.

You see it certainly in food service.

If you've ever worked in food service like fast food,

then everything is really like a production line.

Same thing with farming and food production.

It's really gone almost to look

just like a manufacturing process,

and so, a lot of ways, not only is it still relevant,

it's still more common than ever.

Now of course, it is still only one way to do things,

and some of the new knowledge-based,

expertise-based, information-based companies

don't necessarily take this approach,

so Google, Facebook, and other kinds of companies like that

are not generally manufacturing tangible goods,

and so, they do not take this

classical management approach as much,

although they are still very aware of it,

and just like the theories we mentioned,

like systems theory, human relations, human resources,

they are, in many ways, reacting against

the classical management way of doing things.

So it's absolutely still relevant in many of our workplaces,

and when it's not directly touching us,

we are certainly indirectly influenced by it.

So that's a little bit about the context at the time,

the three primaries theories

that generally make up classical management theory,

and we looked a little bit

at whether or not it's still relevant today,

and I believe it certainly is.