ge os anujjindal.in ye \G vo A xy ~~ Notes Evolution of Management Thought - Part 1 This document provides how management evolved in general and discussed the classical approach which is considered as the traditional theory. in addition to that, we discussed Administrative Theory, Scientific Management Theory and Bureaucratic Approaches under the classical theory of management. Introduction Classical Approach Administrative Theory Relevance of Fayol's Principles Today Critical Evaluation Scientific Management Principles of Scientific Management Techniques of Scientific Management Critical Evaluation Bureaucratic Approach Advantages of Bureaucracy Disadvantages of Bureaucracy Contributions/Merits of Classical Theory Criticism of Classical Theory Introduction The evolution of management can be traced back to the days when human beings started living in groups, One can argue that management took the form of leadershipwhich was essential to coordinate the efforts of the group members in order to arrange the necessaries of life. According to Egyptian literature of 1300 B.C., the art of management was being practised in different forms by different people. The literature clearly indicates the recognition of the importance of organisation and administration in the bureaucratic setup. Similar records exist for China. According to L.S. Hsu, Confucius's parables include practical suggestions for proper public administration and admonitions to choose honest, unselfish and capable public officers. Modern management has developed through several stages or approaches. These approaches to the study of management may be classified as under: — Cee rl Deere err) etc erie crag — eC un eri) a Ieee egg | era asin Classical Approach _s The classical theory represents the traditionally accepted views about organisations. In a way, it signifies the beginning of the systematic study of organisations. That is why itis said to be the oldest school of thought about organisations and their management. Its often called a traditional theory. Notes Evolution of Management Thought - ParThe classical theories concentrated on organisation structure for the achievement of organisational goals and also developed certain principles of management. Classical writers thought of the organisation in terms of its purpose and formal structure. They placed emphasis on the planning of work, the technical requirements of the organisation, principles of management and the assumptions of rational and logical behaviour. Thus, classical theorists dealt almost exclusively with the anatomy of formal organisation structure. The classical theory ignored the impact of the external environment on the working of the organisation. Thus, it reated organisations as closed systems. Features of Classical Theory The salient features of the classical approach are as follows: 1. The classical theory laid emphasis on the division of labour and specialisation, structure, scalar and functional processes and span of control. Thus, they concentrated on the anatomy of formal organisation. 2. The classical theorists emphasized organisation structure for the coordination of various activities. They ignored the role of the human element. 3. The classical theory ignored the impact of the external environment on the working of the organisation. Thus, it treated organisations as closed systems. 4, The efficiency of the organisation can be increased by making individuals efficient. 5. The integration of the organisation is achieved through the authority and control of the central mechanism. Thus, it is based on centralisation of authority. 6. There is no conflict between the individuals and the organisation. In case of any conflict, the interests of the organisation should prevail. 7. The people's work could be motivated by economic rewards as they were supposed to be ‘rational economic persons’. Classical thought can be studied under three streams, namelyere cna eeu Cucud Principles for efficient organisation) Administrative Theory ef? This stream of the classical approach is known as Administrative Theory or Functional Approach or Management Process Approach. This school of thought is also known as the ‘universalist’ school because it believed that management principles are applicable to all kinds of group activities. Henri Fayol is regarded as the father of this thought, i.e., the father of general management. Henri Fayol defined management in terms of certain functions and then laid down fourteen principles of management which according to him have universal applicability. He argued that managerial ability can be acquired as any other teaching ability. He notonly recommended formal teaching in management but also practised it by founding the “Centre for Administrative Studies” in Paris. Management Principles: Fayol gave the following general principles of management: 1. Division of work According to this principle, work should be divided into small tasks/jobs; each performed by a specialist or trained employee. Division of work leads to specialisation. This results in efficient and effective output. For example, in a company, there are separate departments for finance, marketing, production and HR. All the departments perform specialised tasks. This leads to functional specialisation. 2. Authority and Responsibility Authority is the right to get things done and respon: certain work. Fayol suggested that there should be a balance between authority and responsibility. * Giving authority without fixing responsibility may lead to misuse of authority. For example, if a sales manager requires to offer a credit period of 60 days to negotiate a deal with a buyer (to fetch the company net margin of Rs.25 lakh), he/she should not be given the authority to offer a credit period of 100 days. He/she may misuse his/her authority. + Atthe same time, responsibility without adequate authority will make the subordinate ineffective, i.e., he/she will not be able to perform his/her duties properly.| f For example, suppose the production manager of a company manufacturing scooters asks his/her foreman to achieve a target production of 250 scooters per day. But he/she does not give him the authority to requisition tools and materials from the store's department. The foreman is not able to achieve the target. Then, the production manager cannot blame him. 3. Discipline nce to organisational rules and employment agreements, which are necessary for the working of the organisation. According to Fayol, discipline requires: + Good superiors at all levels, + Clear and fair agreements, and + Judicious application of penalties _# For example, suppose management and a labour union have entered into “an agreement whereby workers have agreed to work overtime without any additional payments to revive the company out of loss. In return, the management has promised to increase wages when this mission is accomplished. Here ‘discipline’ would mean that workers and management both honour their commitments 4, Unity of Command According to Fayol, there should be one and only one boss for every individual employee. Dual subordination should be avoided. This principle resembles a military organisation. If an employee gets orders from two or more superiors at the same time, the principle of unity of command is violated. Consequences of violation: + Authority is undermined* Discipline is in jeopardy * Order is disturbed and + Stability is threatened For example, suppose a salesperson is asked to make a deal with a buyer by the marketing manager and is allowed to give a 10% discount by the marketing manager. But the finance manager does not permit him to offer more than a 5% discount. Now, there is no unity of command. There will be confusion in the mind of the salesperson regarding whose instructions to follow. This can be avoided if there is coordination between the two departments 5. Unity of Direction All the units of an organisation should be moving toward the same objectives. through coordinated and focused efforts. Each group of activities must be having the same objective and must have “one head and one plan’. This ensures unity of action and coordination. if For example, If a company is manufacturing motorcycles as well as cars, then it should have two separate divisions. Each division should have its ‘own charge, plans and resources. The working of the two divisions should not overlap on any account 6. Subordination of individual interest to general interest According to this principle, th terests of the organisation should take priority over the interests of any one individual employee. [4 For example, a company may want to get maximum output from its employees at a competitive cost (salary), while an employee may want to get a maximum salary while working the least. Here, the interest of the company will supersede the interest of the employee.This is so because the larger interests of various stakeholders, i.e., workers, owners, shareholders, creditors, customers and society cannot be sacrificed for one individual or a small group of individuals who want to exert pressure on the company. A manager can ensure this through his/her exemplary behaviour. For example, he/she should not fall into the temptation of misusing his/her powers for individual/family benefit at the cost of the larger general interest of the workers/company. This will ensure the same behaviour by the workers. Remuneration of employees Remuneration of employees should be just and equitable so as to give maximum satisfaction to both employees and the organisation. + The employees should be paid fair wages/salaries, which would give them at least a reasonable standard of living + at the same time, it should be within the paying capacity of the company This will ensure good relations between workers and management. Consequently, the working of the company would be smooth. Centralisation and Decentralisation The concentration of decision-making authority by top management is called centralisation. On the other hand, the delegation of authority throughout all the levels of the organisation is called decentralisation. Those organisations in which decision-making authority lies with the top management are termed centralised organisations whereas those in which decision- making authority is pushed down the chain of command are decentralised organisations. + Fayol says that an organisation should have a balance between complete centralisation and decentralisation. | # For example, the major decisions like setting up of goals, plans, policies and strategies can be centralised; but there can be a policy of decentralisation for the activities of routine work such as the purchase of raw materials, assignment of targets to workers, etc.An organisation can never be completely centralised or completely decentralised. As an organisation grows in size and complexity, there is a tendency to move towards decentralised decision-making. This is because, in large organisations, employees are more directly and closely involved with the business operations than the top management. Scalar Chain An organisation consists of superiors and subordinates. The formal lines of authority from highest to lowest ranks are known as the ‘Scalar Chain’. According to Fayol, ‘Organisations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and the subordinates.’ We consider a situation where there is one head ‘A’ who has two lines of authority under him/her. One line consists of B-C-D-E. Another line of authority under ‘A’ is L- M-N-O. if E' has to communicate with ‘O', who is at the same level of authority, he/she has to transverse the route E-D-C-B-A-L-M-N-O. Scalar Chain Gang Plank According to Fayol, this chain should be violated in the normal course of formal communication. However, if there is an emergency then 'F’ can directly contact 'P’ through ‘Gang Plank’. There is a shorter route that has been provided so that communication is not delayed in case of an emergency,| Example: A worker cannot directly contact the CEO of the company. If at all he/she has to, then all the formal levels, i.e., foreman, superintendent, manager, director, etc. must know about the matter. However, in an emergency, it can be possible that a worker can contact the CEO directly 10. Order The principle of ‘order’ states that - ‘a place for everything (everyone) and everything (everyone) on its (his/her) place.” Essentially, it means orderliness. According to Fayol, “people and materials must be in suitable places at the appropriate time for maximum efficiency” If there is a fixed place for everything (everyone) and it (he/she) is there, there will be no hindrance in the activities of the business/factory. This will lead to increased productivity and efficiency. 11. Equity The principle emphasises kindness and justice in the behaviour of managers towards workers. There should be no discrimination on account of sex, religion, language, belief, nationality, caste, etc. This will ensure loyalty and devotion. There will be cordial relations between managers and workers. | f For example, Nowadays in MINCs, we find people of various nationalities “working together in a discrimination-free environment. Equal opportunities are available for everyone to rise. 12. Stability of personnel According to this principle, employees once selected, should be kept at their post/position for a maximum fixed tenure. In other words, they should have a stability of tenure. They should be given reasonable time to show results. Fayol suggests that labour turnover should be minimised to maintain organisational efficiency. The stability of tenure of personnel is good for the business because of the following reasons:+ Any adhocism will create instability/insecurity among employees. They would tend to leave the organisation. + Recruitment, selection and training costs of new employees will be high. + There will be poor output levels and customer service till new employees are appointed. 13. Ini iative Initiative means eagerness to initiate action without being asked to do so. In other words, it means taking the first step with self-motivation. According to Fayol, subordinates should be encouraged to make and execute plans within the prescribed limits of authority. For example, a good company has an employee suggestion system whereby initiative/suggestions, which result in costitime reduction, is rewarded 14. Esprit de corps ‘Espirit de corps’ means unity is strength. According to Fayol, management should promote a team spirit of unity and harmony among employees. A manager should replace ‘I with ‘We' in all his/her conversations with workers to foster team spirit. This will rise to a spirit of mutual trust and belongingness among team members, It will also minimise the need for using penalties. Management should promote teamwork, especially in large organisations; otherwise, it will result in a loss of coordination and hence the organisation will not be able to achieve its objectives. Fayol warned that these principles are flexible guidelines rather than hard and fast laws. They should be used with discretion rather than blindly. Relevance of Fayol’s P' les TodayThe basic principles of management have stood the test of time. These are relevant even in today's business scenario. However, some modifications may be needed in these principles to suit the particular situation. A few examples of various principles of management and their relevance are given below. Unity of Command Unity of Direction Subordination of individual interest to common interest Remuneration Scalar Chain Order Equity Stability of tenure Total task cannot be performed by one person The two must go together Essential for smooth functioning of every business firm, Usually followed Department of a business firm usually organised as per this, principle Essential for common good Just and fair in most cases Some decentralisation found in every firm, Usually followed in most cases Used to avoid chaos Employers have to be equitable to ensure good relations with employees In the interest of the employer too. Degree of division of work differs from one organisation to another. Complete equality is not always possible. ‘Type of discipline may be different in different firms, e.g., self-discipline, or army type of discipline In some cases, an employee may be asked to report two bosses. In some business firms, matrix structure is used, Some employees may not follow this principle In the unorganised sector this principle may be violated by many firms. Degree of decentralisation may differ from firm to firm Maybe violated to speed up communications Degree of order may vary Cases of inequity reported in some firms ‘Companies may have to retrench employeesEmployees suggestion useful Some employers do not permit nairetive) for employer. employees to take initiative In some organisations there is it I Espirit de corps Unity relevant for al erences Critical Evaluation Fayol was the first to systematize the classical school. His theory retains much of its force till today. Many of his concepts and principles are taken for granted by managers now. The principles of administrative theory have the potential to comprehend and cope with the growing complexity of organisations to the extent they seek to bring order, structure and certainty through rules, regulations, policies and practices. Fayol's theory has, however, been criticized on the following grounds: 1, Too formal: Fayol's theory is said to be very formal. However, in any specific and analytical study, facts and observations have to be presented in a formal manner. 2. Vague: Some of the concepts have not been properly defined. For example, the principle of division of work does not tell how the task should be divided Again, to say that an organisation needs coordination is merely to state the obvious. In the words of Herbert Simon, “administrative theory suffers from superficially, oversimplification and lack of realism” 3. Inconsistency: Principles of the administrative theory were based on personal experience and limited observations. They are generalizations and lack empirical evidence. They have not been verified under controlled scientific conditions. Some of them are contradictory. For example, the unity of command principle is incompatible with the division of work. The theory does not provide guidance as to which principle should be given precedence over the other.4, Pro-management bias: Administrative theory does not pay adequate attention to workers. Workers are treated as biological machines or inert instruments in the work process. 5. Historical value: Fayol’s theory was relevant when organizations operated in a stable and predictable environment. It seems less appropriate in the turbulent environment of today. For example, present-day managers cannot depend entirely on formal authority and must use persuasion to get the work done. Similarly, the theory views organizations as power centres and does not recognize the role of a democratic form of organization. Scientific Management The impetus for the scientific management approach came from the first industrial revolution. Because it brought about such an extraordinary mechanism of industry, this revolution necessitated the development of new management principles and practices Frederick W. Taylor was the first person who insisted on the introduction of scientific methods in management and it was he who, along with his associates, made the first systematic study of management. He launched a new movement in 1910 which is known as ‘Scientific Management. That is why Taylor is regarded as the father of scientific management. Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and cheapest way.Scientific management implies the application of science to management. It means conducting business activities according to standardised tools, methods and trained personnel in order to increase the output, improve its quality and reduce costs and waste. Principles of Scientific Management The basic principles of scientific management are as follows: 1. Develop a true science for each element of a worker's job to replace the old rule of thumb method. Each element of a job and the motions required to perform should be scientifically analysed to determine and use the most efficient ways of doing it. Intuition, experience and hit-or-miss methods should be replaced by scientific methods. The selection of scientific methods will result in a tremendous saving of human efforts, time and materials. 2. Harmony, not discord: Taylor emphasised that there should be complete harmony between the management and workers. Both should realise that each one is important. To achieve this, Taylor advocated a complete ‘Mental Revolution’ on the part of both management and workers. Mental Revolution The basic idea behind the principles of scientific management is to change the mental attitudes of the workers and the management towards each other. Taylor called it the ‘Mental Revolution’. The mental revolution has three aspects: * All out efforts for an increase in production * Creation of the spirit of mutual trust and confidence+ Inculcating and developing the scientific attitude towards problems Taylor suggested that management should try to find the best methods of doing various jobs and introduce standardised materials, tools and equipment so that wastage is reduced. The workers should be disciplined, loyal and sincere in fulfiling the tasks assigned to them. They should not indulge in wasting resources. Both the management and workers should trust each other and cooperate in achieving maximum production. According to Taylor - “Prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees.” . Cooperation, not individualism: This principle is an extension of the principle of ‘Harmony, not discord’. According to this principle, there should be complete cooperation between the labour and the management instead of individualism. Competition should be replaced by cooperation. Both should realise that they need each other. For this, management should not close its ears to constructive suggestions made by employees and should reward their suggestions which result in a substantial reduction in costs. And in addition, for all important decisions taken by the management, workers should be taken into confidence. According to Taylor, there should be an almost equal division of work and responsibility between workers and management. Management should work almost side by side with the workers helping, encouraging, and smoothing the way for them. This is called the ‘paternalistic style’ of management, whereby the employer takes care of the needs of the employees Development of each and every person to his/her greatest efficiency and prosperity: According to Taylor, to increase efficiency each person should be scientifically selected and the work assigned should suit his/her physical, mental and intellectual capabilities. To increase efficiency, they should be given the required training to learn the ‘best method’. Efficient employees would produce more and earn more. This will ensure the greatest efficiency and prosperity for both company and workers.Techniques of Scientific Management 1. Functional Foremanship Functional foremanship is an extension of the principle of ‘Division of work and specialisation’ to the shop floor level of a factory. It is a technique which aims to improve the quality of supervision on the shop floor by putting workers under eight specialist foremen. In this technique, planning is separated from execution so that the foremen under ‘planning incharge’ may concentrate on planning the job of workers, and the foremen under ‘production incharge’ may involve themselves in the execution of jobs. Taylor suggested four foremen for planning and four foremen for execution, as shown below: Role of foremen under planning incharge Route Clerk Instruction Card Clerk Time and Cost Clerk Discipline Officer Notes Evolution of Management Thought - Part Specifying the route of production drafting instructions for workers. Preparing time and cost sheet Ensuring dis avRole of foremen under production incharge keeping machines and tools, etc. ready for Gang Boss operation by workers, Speed Boss timely and accurate completion of the job enna ensuring proper working conditions of machines and tools Inspector checking the quality of work 2. Standardisation and Simplification of Work Standardisation of work refers to the process of setting standards for every business activity, e.g., standardisation of process, raw material, time, product, machinery, methods and working conditions Objectives of standardisation of work are: + To reduce a given line or product to fixed types, sizes and characteristics + To establish standards of excellence and quality of materials + Toestablish standards of performance of workers and machines + To establish the interchangeability of manufactured parts and products icat Simpl n of work aims at eliminating unnecessary diversity of products. It results in savings in the cost of labour, machines and tools Itimplies reduced inventories, fuller utilisation of equipment and increasing turnover. 3. Work Study i. Method Study: Taylor suggested that management should find out ‘one best way" to perform the task. The objective of the Method study is to find out the best way of doing a job so as to minimise the cost of production| and maximise the quality and satisfaction of the customer. ii, Motion Study: Motion study refers to the study of movements like lifting, putting objects, sitting, changing positions, etc. which are undertaken while doing a typical job. The objective/aim of the motion study is to eliminate unproductive or unnecessary motions/movements so that it takes less time to complete the job efficiently. ili, Time Study: It determines the standard time taken to perform a well-defined job. Time measuring devices (e.g., stopwatch) are used for each element of the task. The standard time for the whole task is fixed by taking several readings/observations. The objective of the time study is to determine the number of workers to be employed, frame suitable incentive schemes and determine labour costs. iv, Fatigue Study: Fatigue, physical or mental, has an adverse effect on workers! health and efficiency. Fatigue study helps in reducing fatigue among workers. The objective of the fatigue study is to determine the amount and frequency of rest intervals in completing a task. 4, Differential Piece Wage System: It is a technique which differentiates between efficient and less efficient workers. It rewards efficient workers and motivates the less efficient ones to improve their efficiency. + In this wage system, there are two-piece rates — one for those workers who produce the standard output or more, and the other for those who produce less than the standard output. The difference in wages is enough for the inefficient worker to be motivated to perform better in future. valuion of Management Thought - Past 1 19Standard output (per worker per day): 100 units ‘Wage rate |: Rs. 4 per unit (for output >= 100 units) ‘Wage rate Il: Rs. 3 per unit (for output <100 units) Worker A. Worker B ‘Actual output 110 units 80 units Total wages: T10*RS.4 = Rs. 440 ‘B0*Rs.3 = Rs. 240 Difference in units produced = 30 Difference in wages = Rs.200 According to Taylor, this loss will be the strongest motivator for worker B to reach standard performance in future. Critical Evaluation Taylor's ideas caught the imagination of several individuals and organizations in the USA and Europe. Scientific management led to a tremendous increase in productivity and wages. However, his scientific approach to every aspect of management created suspicion in the minds of workers and trade unions. They feared that working harder and faster might eventually lead to the exhaustion of all available jobs and retrenchment. Scientific management has been criticised on the following grounds: 1. Mechanistic Approach: The main criticism is that scientific management ignores the human element in production and is devoid of human touch. It treats workers as factors of production and not as human beings. Too much emphasis is placed on technical aspects of work ignoring the human side. Therefore, Taylor and his associates were ridiculed as ‘efficiency experts’ and ‘time study analysts’ 2. Unrealistic Assumptions: Scientific management is based on the assumption that people are rational and motivated by material gains. Taylor and his associates concentrated on the physical and economic needs of people. Later experience hasrevealed that financial gain is not the only thing that matters. Workers also want job satisfaction, participation and recognition. 3. Narrow View: Scientific Management is quite limited in scope. Taylor focused completely on efficiency on the shop floor. As a consequence, management became the study of shop management while the more general aspects were overlooked. Scientific management has thus been described as a theory of industrial engineering. It does not deal with the management of the total organisation. 4, Impractical: Many ideas of Taylor are said to be infeasible in practice. For example, planning cannot fully be separated from doing because these are two sides of the same job and are not different jobs. Similarly, functional foremanship is likely to create problems because it violates the principle of unity of command. 5. The exploitation of Labour: In the name of increasing efficiency, workers were forced to speed up affecting their physical and mental health. Specialisation and standardisation make jobs dull and monotonous. Bureaucratic Approach Max Weber contributed to the organisation theory by propagating bureaucracy as an ideal form of organisation. His model is characterised by the following features: 1. Division of work: There is a high degree of specialisation or division of labour in a bureaucratic organisation. Tasks are divided into very specialised jobs and each member performs his specialized function in a predictable manner. 2. Rules and Regulations: The rules, regulations and procedures are clearly laid down by the top administration. Their benefits are as under- + They standardised operations and decisions * They serve as receptacles of past learning + They protect incumbents and ensure the quality of treatment3. Hierarchy of Authority: There is a hierarchy of authority in the organisation. Each lower position should be under the control of a higher one. Thus, there is a unity of command. 4, Technical Competence: Selection and promotion of jobholders are based on their technical competence. Qualifications are prescribed for each job/position. Special training is given to provide knowledge of rules and administrative processes. 5, Record Keeping: Every decision and action is recorded in a wide array of written documents and preserved in its original as well as draft form. The official records serve as the memory of the organization and make it independent of the individuals. 6. Impersonal Relations: A notable feature of bureaucracy is that relationships among individuals are governed by the system of official authority and rules. Official Positions are free from personal involvement, emotions, and sentiments. Thus, decisions are governed by rational factors rather than personal factors. This impersonality concept is used in dealing with organizational relations as well as relations between organizations and outsiders. According to Weber, there are three types of legitimate authority in organizations: Traditional Authority Rational Legal Authority Charismatic Authority It 7 Dea a “nen a This type of authority is vested person acquires Pecaltse fie ina legally established position PePle obey a person belongs to a particular class or due to their belief that the i : of fank within the ‘occupies a position that by tradition person has some special " orgnizato's erat, © possessesauhory eg, mente Sr eyecuveotacampary POM Fa9He royal tay Weber considers rational-legal authority as the most important, Traditional authority overlooks the competence of the leader whereas charismatic authority is very emotional and irrational. Advantages of Bureaucracy 1. Competence: There is proper delegation of authority in the organisation. People are given tasks according to their competence. 2. Rules and Regulations: Because of rules and regulations, all actions are taken carefully. There is consistency of actions.3. Rationality: The behaviour of the employees is rational. They make decisions as per laws, rules and regulations. They don't go by their whims, emotions or prejudices. 4, Predictability: The behaviour of the employees is predictable. It is known how they will react under different situations as guidelines are already there in writing 5. Efficiency: Bureaucracy leads to efficiency in the organisation. There is a division of work leading to specialisation which results in efficiency, 6. Impartiality: Officials are guided by the policies, rules and regulations rather than their personal whims and faces. They are not supposed to shower personal favours on anybody. Disadvantages of Bureaucracy 1. Rigidity in Operations: Rules and regulations in a bureaucracy are often rigid and inflexible. Strict compliance with rules and regulations discourages initiative and creativity. It may also provide a cover to avoid responsibilty for failures. + The bureaucratic structure is not effective in turbulent or dynamic environments. It can’t undergo the change required by the fast-changing environment. 2. Delay and Red Tape: The rules may be followed in letter and not in spirit. Thus, the rules may become a source of inefficiency leading to delays in operations. The rules. may be misused by the persons concerned with the implementation of the rules, Red tape and technicalities may follow as a result. 3. Goal Displacement: Goal displacement may take place in a bureaucratic organisation. The bureaucrats may give priority to rules and regulations or the secondary goals and forget about the primary goals. In other words, means become the ‘ends’ and the ends or goals become the ‘means’ leading to goal displacement. 4. Ineffective Communication: The bureaucratic structure is tall consisting of several layers of executives. Thus, communication from the top level to the lowest level will take a very long time. 5. Lack of personal touch: Bureaucracy is based on impersonal relationships. It does not allow interpersonal relations between employees and informal groups in the organisation.Contribu' ns/Merits of Classical Theory The merits of the classical theory are as follows: * It provided principles of management which can be applied in different types of situations. Thus, it highlighted the universal nature of management. + Management principles are flexible in nature. Managers can modify them to suit the given situation. + The classical approach focussed on the functions of managers in different types of organisations. + Aclassical theory provides a scientific basis for management practice. It also provides a starting point for researchers to verify the validity and improve the applicability of management knowledge. Such knowledge about management is effectively presented. + It emphasised the role of money or financial incentives in motivating the workers. + Ithas supreme importance to the organisation and its objectives. People are supposed to follow organisational policies and procedures and obey orders of their superiors to achieve organisational objectives. Criticism of Classical Theory The fundamental objectives against the classical theory are discussed below: 1. Narrow view of organisation: The value of a classical theory is limited by its narrow concentration on the anatomy of formal organisation. In order to achieve rationality, the classical writers ignored the human relations aspect. The interplay of individual personality, informal groups and inter-organisational conflicts in the formal organisation were neglected. It is said that the focus of the classical theory is on “organisation without people’. 2. Assumption of a closed system: Classical theorists viewed the organisation as a closed system, i.e., having no interaction with the environment. This assumption is totally unrealistic. A modern organisation is an open system which has continuous interaction with the environment through the exchange of inputs and outputs and various types of information.Assumption about Human Behaviour: The human beings were treated like any other factor of production. They were supposed to obey their superiors. The classical writers ignored the social, psychological and motivational aspects of human behaviour. . Economic rewards as main motivators: The assumption that people at work can be motivated solely through economic rewards is also wrong, Several types of research in human behaviour have contradicted this assumption. Non-monetary factors like better status and job enrichment can also motivate workers. . Lack of empirical verification: The classical principles are mostly based on personal experience and limited observations of the practitioners. They are not based on empirical research. They lack a precision and comprehension framework for analysis. Moreover, it is not clear whether these principles are action recommendations or simply definitions. . Excessive emphasis on rules and regulations: Weber's ideal bureaucracy, a major constituent of classical theory, suggested strict adherence to rules and regulations. The scope for individual initiative is thus limited. The result is red-tapism in the organisation. Observation of rules and regulations becomes the main objective while the real objectives for which these rules and regulations are formed are forgotten,eC al a3 All Indian All India All india All India All India Rank 01 Rank 03 Rank 06 Rank 10 Rank 11 jon Ali at Rajendran $ bhishek ENROLL NOW ! @ youtube.comvanujindal G) anuiindalin Call us at 91 9999406225 Notes Evolution of Management Thought - Part