Classical Organization Theory, 6 Basic Pillars, and Criticisms

Classical Organization Theory: There are various organizational theories that help explain and predict how processes work and behaviors unfold within organizations. These theories are grouped into three main types: Classical Organization Theory, Neo-Classical Organization Theory, and Modern Organization Theory. This article will focus on the Classical Organization Theory.

What is Classical Organization Theory?

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Classical Organization Theory- Taylor’s Approach

• Ensuring that the benefits of improved productivity directly benefit the workers.
• Minimizing physical stress and anxiety in the workplace.
• Developing the capabilities of workers through training.
• Abandoning the traditional hierarchical 'boss' concept.

• Replace old rules of thumb with a scientific approach for each aspect of a person's work.
• Select organizational members based on thorough analysis and subsequently provide training and development.
• Promote collaboration between management and labor, avoiding conflict, and ensuring work aligns with scientific principles.
• Implement scientific training for workers conducted by experts using systematic methods.

Also Read: Difference Between Explicit Cost and Implicit Cost

Classical Organization Theory- Max Weber’s Approach

Classical Organization Theory- Henri Fayol’s Approach

• Division of Work or Specialization: Enhances productivity in both technical and managerial domains.
• Authority and Responsibility: Imperative for organizational members to achieve the established objectives.
• Discipline: Members should adhere to organizational objectives, rules, and regulations.
• Unity of Command: Encompasses taking orders from and being accountable to a single superior.
• Unity of Direction: Members collectively work towards shared organizational goals.
• Subordination of Individual Interest to General Interest: Organizational interests should supersede individual or group interests.
• Remuneration of Personnel: Can be based on factors like time, job, piece rates, bonuses, profit-sharing, or non-financial rewards.
• Centralization: Management should find an appropriate balance between centralization and decentralization of authority and decision-making
• Scalar Chain: Members at the same hierarchical level can collaborate directly on a 'gangplank' if approved by higher officials.
• Order: The organization should have a designated place for everything and everyone.
• Equity: Fairness, justice, and equity should prevail within the organization.
• Stability of Tenure of Personnel: Job security enhances performance as employees need time to adapt to new tasks.
• Initiative: Encouraging and stimulating initiative is essential.
• Concept of Line and Staff: Relevant in large organizations requiring specialized skills. Line personnel directly contribute to organizational goals, while staff personnel provide support.
• Committees: Integral to the organization, committees with members from various hierarchical levels and departments serve diverse functions such as managerial, decision-making, recommending, or policy formulation.
• Functions of Management: Fayol identified management as a combination of planning, organizing, training, commanding, and coordinating functions.

6 Basic Pillars of Classical Organization Theory

Criticisms of Classical Organization Theory

• These theories are merely speculative and lack scientific substantiation.
• The theories overlook crucial human elements in organizational dynamics.
• Sociological dimensions are disregarded in these theories.
• Psychological considerations are not adequately addressed in these theories.
• The principles primarily emphasize economic motivations of workers, neglecting their emotional ties to the workplace.
• The stability inherent in these theories makes organizations employing them resistant to adapting to changes.
• These theories portray organizations as isolated systems, overlooking their interaction with the broader environment.
• The emphasis is solely on organizational structure and hierarchy, neglecting other crucial aspects.
• The theories lack detailed descriptions, leaving suggestions without clear, defined reasoning.