Classical Administration Theory (Meaning and Explanation)

We explain what the classical theory of administration is, its principles and the functions it assigns to administration.

What is classical management theory?

The classical theory of administration It was promoted by the Frenchman Henry Fayol in 1916 to offer improvements to the theory of scientific administration or “Taylorism” (proposed by Frederick Taylor in 1911). Taylor studied the production process and Fayol focused on the company's management.

Classical management theory is a current of knowledge that emerged in response to the accelerated business growth after the Second Industrial Revolution. The theory emphasizes overall management of the organization that is, in the structure and functions that each part of the company must perform (not only in improving production methods).

Administration history

The history of administration is very old and dates back to when human beings used reason when organizing themselves into groups to hunt, gather and form towns and civilizations, for which they established tasks, action plans and objectives.

The study of the different models of administration oriented to the industrial and business world, was boosted by the Industrial Revolution. The context established new rules of organization with hierarchical systems and divisions of economic and social power. Faced with the problems of the new scenario, administration as a discipline emerged.

Among the main representatives of the administration are:

Frederick Taylor He was the father of scientific administration. He proposed organizing work through the application of scientific methods (such as the improvement of production systems, the selection of suitable workers and the division of labor). Before Taylorism, workers were responsible for planning and executing their tasks, even if they did not have technical knowledge of the tasks.
Henry Ford He was the creator of industrial mass production. Its objective was to generate a greater quantity of goods in the shortest time and at a reduced cost. Thanks to Ford's contributions, the production system was revolutionized. In 1913 it had several industrial plants for the production of the Ford T car.
Henry Fayol. He proposed increasing the company's efficiency by making all the parts that make up the organization available to the administration, especially the higher levels of command. He postulated five basic functions for the administration process that must be carried out under fourteen principles of Fayolism.
Frank B Gilbreth He proposed an improvement for scientific organization through the study of movement and time, called “Therblig”, which consisted of the eighteen movements into which any work task could be subdivided (such as searching, finding, selecting, taking, holding, moving , reach, inspect, plan).
Henry Lawrence Gantt He proposed a system called by his name, Gantt chart, which consisted of a tool to plan and schedule tasks during a certain period (it consisted of a graph of horizontal bars ordered by activity, which allowed us to see the sequence of work time and organize priorities).
Elton Mayo He proposed a psychological and sociological view of the industrial world, which consisted of emphasizing the emotional needs of employees to increase productivity and promote good labor relations (which are as or more motivating than economic incentives).

Principles of classical management theory

Henry-fayol-classical theory of administration — Henry Fayol established 14 principles of management.

The principles of classical management theory are general regulations that allow management to dominate all functions of the organization. Fayol established fourteen principles:

The division of labor Divide the work organization according to the capacity and efficiency of each employee and each area, to achieve better effectiveness and productivity.
Authority and responsibility Establishing a balance between the power exercised by the authority and the functions it must perform helps prevent abuse of power.
The discipline Respect and make others respect, comply with the rules and regulations of the organization. This principle can be promoted through self-discipline or through sanctions or fines for those who do not respect them.
The command unit Establish that each worker reports to a single direct superior, from whom they will receive orders and support. Otherwise, the performance and productivity of the organization could be affected.
The steering unit Ensure that all activities that have the same objective (such as marketing, advertising, sales and promotion) are directed by the same person.
The subordination of individual interest to the general interest Recognize and promote, firstly, the general interest of the organization and, secondly, that of the employees, in order to guarantee continuity over time.
The remuneration Maintain a remuneration policy (monetary value that the company gives to the employee, in exchange for the services received) that must include financial and non-financial incentives.
Centralization and decentralization Define the degree of concentration of power of the authority, which varies depending on the condition of the business and the type of personnel.
The stepped chain Clearly establish a line of authority or command, which can be horizontal or vertical.
The order Maintain a place for each object in order to optimize production times and maintain social order through the appropriate selection of each employee in the most suitable position.
Equity Give equal treatment to all employees, kindness and justice (that type of bond generates loyalty and commitment).
Personal stability Promote and monitor the performance of the employee who is hired permanently and who knows that he or she has opportunities to progress within the organization.
The initiative Encourage employees to give their opinions, provide constructive suggestions and put together work plans, so that they feel like participants in the organization.
The esprit de corps Create unity, cooperation and team spirit among employees, to avoid confrontations. It is important to reward each person according to their merits without generating jealousy or situations of disagreement.

Functions of classical administration

Fayol recognized six groups of basic functions for administration, which every company must keep in mind:

Technical functions for the production of goods or services.
Commercial functions for the purchase and sale of goods and services.
The financial functions for the control of capital necessary to invest.
Security Features for the protection and preservation of resources.
accounting functions for balance sheets, expenses and statistics.
administrative functions for the integration and coordination of the previous functions.

Once the functions that the organization must perform have been detected, the administrative process must be carried out that will allow the efforts of the entire organization to be coordinated. The five functions or stages of the administrative process are:

The planning It consists of visualizing the future that the organization intends to achieve and drawing up an action plan to get there.
The organization It consists of building the necessary structures (material and social) to carry out the work of the organization.
The address It consists of guiding and directing all the resources of the organization towards the same objective.
The coordination It consists of maintaining the harmony of all those who work in the organization and who may have different interests, so that they work in synergy.
The control It consists of monitoring and verifying that each instance of work performs according to established standards.

Importance of classical theory

The importance of classical management theory lies in the fact that allowed reliable forecasts to be made and efficient administrative methods to be applied.

Criticisms of classical theory

classical management theory criticism repetition — With classical management, work becomes mechanized and repetitive.

Some of the criticisms of the classical theory are that lacked experimentation and verification of its principles. Furthermore, the human factor was not the main focus, on the contrary, this theory exposed workers to deplorable conditions in order to achieve greater productivity performance.

Some authors consider the classical theory as “the theory of the machine”, whose human resources work in a mechanized and repetitive way alongside the machinery. This human aspect was studied in greater depth by later currents.

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