Classical
Organization Theory
It is concerned with the formal structure of organizations.
It focuses not on the work rate of an individual worker but on the technical
efficiency of the organization and is an attempt to formulate universally valid
principles of sound and effective management of organizations. It was developed
by Henri Fayol during the industrial revolution. He identified the manager’s
roles as planning, organizing, leading, controlling and co-coordinating.
-Fayol believed that management was not a personal talent
but a skill that could be taught. He developed the following principles of
management to serve as a guide for managers:
1. Division of Work –Work should be divided among
individuals to ensure that effort and
attention are
focused on special portions of a task. Such specialization allows managers
and workers to
acquire an ability, sureness and accuracy (efficiency) which will
increase output.
2. Authority and Responsibility –Authority is the
right to give orders and the power to
exact obedience.
Responsibility is the duty to act. It leads to accountability. Managers
with responsibility
to carry out a task should be given a requisite authority to undertake
the task.
3. Discipline –Discipline is composed of obedience,
application, energy, behavior and
outward marks of
respect between employers and employees. When it is accompanied
by penalties, they
should be applied judiciously to encourage common effort.
4. Unity of Command –Each subordinate should have a
single superior. One person, one
boss.
5. Unity of Direction –It is necessary to ensure that
the effort of everyone in the
organization is
directed towards the organizational goals.
6. Subordination of individual interest to general interest
–the interest of one person or
group should not
have priority over the interests of the organization as a whole.
7. Centralization –the extent to which authority is
concentrating or dispersed
(decentralized)
will vary with the circumstances of the organization.
8. Scalar chain –this is the chain of command or the
hierarchy formed by managers from
the highest to the
lowest. Subordinates should observe the formal chain of command
unless expressly
authorized by their superiors to skip the links in the chain.
9. Remuneration –the price of services rendered by
employers should be fair in
accordance with
their contribution and should be satisfactory to both employees and
employer. The
level of pay depends on the employees value to the organization, cost of
living,
availability of qualified personnel, general business conditions and success of
the business.
10 Order –both materials and people should be in
their proper places. The objective of
order is to avoid
loss and waste.
11 Equity –all employees should be treated as equally
as possible. Kindliness and justice
are necessary to
obtain loyalty and devotion from the workforce.
12 Stability of tenure of personnel –high labor
turnover is costly and is an effect of bad
management.
Retaining productive workers should always be a high priority of the
manager. It
reduces staffing costs while increasing efficiency.
13 Initiative –management should take steps to
encourage worker initiative. Initiative can
be defined as new
or additional work activity undertaken through self-direction.
14 Espirit de corps –there should be unity and
harmony among employees as this is key
to organizational
success.
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