The Classical Approach - Henri Fayol

The Classical Theory Approach is also known as the Administrative Management approach and Structural theory approach as it deals with advocating management or business practices and formal organization’s structure. Its important proponents are Henry Fayol, Luther Gulick, L.F. Urwick, J.D Mooney, A.C. Reilly, M.P. Follett and R. Shelton. Each of them provided their own principles and improvised on each other’s works but belonged to the same school of thought and thus differed very slightly.

This approach was mainly concerned about developing certain universal principles of organization since it believed that there were certain fundamental principles on the basis of which an organization can be established to achieve its specific objectives leading to maximum organizational efficiency and economy. This approach treats an organization as uninfluenced by outside influences like society and personal problems etc, that’s why it is also termed as ‘closed organization theory’  and ‘Mechanical organization theory’. It didn’t take much to the human factor and importance of motivation. As Taylor was concerned with workers and emphasized on floor activities, this approach focuses more on the top management instead of workers.

Henry Fayol is regarded as the founder of this managerial approach that stressed on a structure of an organization whose management worked by being guided by universally and scientifically valid principles of management to get the most out of the workers and achieve the organization’s objectives. Fayol was a reputed businessman who started off as an Engineer in a mining company and rose to take over it when it was officially on the verge of bankruptcy but his style and method of administration there pulled it out of despair and made it the most successful company of its times. Thus, he penned down his practices after being requested by many in book called “General and Industrial management” and later he also contributed to the theory of Public administration in his book “The theory of Administration in the State”.

Fayol stated that there were six groups of work that every organization’s activities consisted of - technical functions, commercial functions, financial functions, security functions, accounting and administrative functions. And managerial functions according to him consisted of - planning, organizing, commanding, coordinating and controlling.

Fayol’s fourteen principles of organization were his major contribution to the field of administration. The principles were:

1.       Division of work- Work should be divided equally.

2.       Authority -Authority should be invested in a position so that it can carry out its responsibilities attached to it.

3.       Discipline- Discipline has to be maintained all the time.

4.       Scalar Chain- Hierarchy is to be clearly outlined so that there is no confusion from top to bottom and vice versa.

5.       Unity of Command- One supervisor for one worker.

6.       Centralization and Decentralization- All important decisions to be taken at the top and routine tasks to be disseminated at lower management level.

7.       Unity of direction- The system of communication is to be in one direction that is top to bottom.

8.       Subordination of individual interest to general interest- Workers are to think of organizational good first before themselves individually.

9.       Remuneration- Proper & consistent remuneration to be provided so that no one is dissatisfied

10.    Order- Order to be maintained at all times.

11.    Equity- Justice is to be prevailed at all costs and all are to be treated fairly and equally.

12.    Stability of tenure- A stable tenure for security of job and peace of mind of worker so that he is content to do his job.

13.    Initiative- All initiatives that contribute to the good of the organization are to be encouraged and considered.

14.    Esprit de corps- A feeling of team work, loyalty and integrity between employees towards themselves and the organization as a whole at all times and all means to be employed to promote the same.

Though these principles are ambiguous and limited in nature, it provided the basis for the development of principles of administration by later thinkers.

Gullick and Urwick, both had rich experience working in the civil services and military as well as industrial organizations thus in their writings you can sense a combination of both public and business administration.

Gullick also contributed on the basis of his analysis certain principles of organization as Fayol –

1.       Division of work on specialization

2.       Based on departmental organization - Work to be divided into smaller units for more efficiency called departments of the organization.

3.       Coordination through hierarchy - Clearly outlined hierarchy helps in avoiding confusions and facilitating coordination among workers.

4.       Coordination through committers

5.       Delegation

6.       Deliberate coordination - Coordination achieved deliberately through planning.

7.       Decentralization

8.       unity of command

9.       Line and Staff - Line agencies are field work agencies who will be supported by staff agencies who are specialists in the field.

10.    Span of control - Each supervisor to control a certain amount of employees performing the same task or similar tasks. Number of employees not mentioned, depends from organization to organization and tasks.

And of course who can forget how he summed these all up in his famous abbreviation of POSDCORB i.e. Planning (What needs to be done and how it will be done), Organization (establishing a formal structure of authority to divide, arrange, define and coordinate work), Staffing (Recruiting and training of personnel and their conditions of work), Directing (making decisions and issuing orders and instructions), Coordinating (interrelating various divisions and parts of the organization for smooth execution of tasks to achieve organization objectives), Reporting (informing the agency to whom executive is responsible about what is going on) and Budgeting (fixed planning, control and accounting and auditing).

Urwick had his own set of principles, though not much apart from his colleagues of the same school. They are:

1.       Scalar principle
2.       Principle of Coordination
3.       Principle of organizational goals and objectives
4.       Principle of Span of control
5.       Principle of correspondence
6.       Principle of specialization
7.       Principle of responsibility
8.       Principle of definition
Mooney and Reiley’s principles:
1.       Coordinative principle
2.       Scalar principle
3.       Functional principle
4.       Staff/line principle
All these principles or guiding rules are supposed to help managers manage their organizations in the best possible manner and increase efficiency and economy.

GENERAL PRINCIPLES OF ADMINISTRATION

Let’s discuss some of the important principles listed above in detail.

The theory of departmentalization (by Gullick): He advocated that work in an organization can be divided and given to newly created departments for the same. Now the basis on which departments are created are:

1) Function or purpose: For a major function or purpose of the organization departments are created, for example, to regulate trade and commerce in the country there is a department of commerce. To look after the welfare of people there is a department called Welfare department. Universally, this principle is applied mostly in governmental organizations. A department is a part of the government. There can be departments under ministries or autonomous departments like the Department of Atomic Energy that is not under any ministry but under the prime minister himself.

Advantages of departments are that it ensures better discipline and eliminates time wastage and energy, they are self contained and low coordination costs are involved in running them. They are much more successful in attaining goals. However its disadvantages are failure to use updated technology, lack of possibility of work division and not enough specialists for guidance.

2) Departments made on the basis of Process or Skills: It means that a department is created for a specialized technique to be applied for a particular job like engineering, accounting, stenography, legal advice, etc. Thus there are Department of Law, Department of Engineering, Department of account and auditing etc. advantages are that these departments are up to date with technical skills and specialization. Is uniform and coordinates all engineering services under one department. Disadvantages are that it is very mechanical and creates interdepartmental conflicts and is not much concerned with welfare. Further failure of one department effects the whole enterprise.

3) Departmentalization on the basis of Persons or Clientele: For example, the ‘old age department’ serves the old people needing special attention. Disadvantages of this kind of department are that coordination becomes difficult on account of overlapping and duplication many a times.

4) Departmentalization on the basis of Place or Territory: Examples are ‘District administration department’ or ‘tribal area department’ where functions performed in a particular area are clubbed together and one department is formed. It helps in intensive development of an area. But such department can suffer from lack of functional specialization and growth many a times.

Some departments can be seen overlapping each other too like the Department of medicine can also be considered as a process based department as it involves skills and can also be considered as purpose based department as there is a purpose behind its existence and that is standardization of medicine and its development. Therefore one has to be careful in segregating them and their workings.