Classical Organizational Management Theories

Classical Organizational Management Theories


This study compares three perspectives on organization management which includes the classical, neo-classical and modern theories. It looks at the assumptions they make while prescribing different styles of organization management to understand how the perspectives help to create a range of possibilities to design and manage organizations. Organizations aim at being productive by making various elements efficient. Managers have the task of ensuring that the organization is flowing towards the set goals. Scholars have come up with different perspectives that serve as a framework of organizational management. One such aspect is classical that emphasizes managing employees like parts of a machine to ensure the efficiency of an organization. Neoclassical perspective is an improvement of the classical theory where it prescribes consideration of human behaviors for efficiency. The approach considers an organization as a social system and therefore accommodates the formal and informal interactions. The modern perspectives combine the classical and neoclassical approaches to recognize an organization as a social-technical system that is influenced by external and internal environments. The view is concerned with human behaviors. The study considers the modern aspect as the one with the most utility because of its accommodative and flexible nature.

Keywords: Organization, Management, Classical, Neo-classical, Modern, Perspective, Theory


Classical Organizational Management Theory

The classical perspective of organizational management views an organization as a machine while holding that the employees are part of the machines that make it function. According to the theory, the efficiency of an organization lies in the proper management of the employees efficiently as parts which makes the machine work. The approach is based on four pillars that include labor division human behavior, depart-mentation, and coordination. The four components provide an orderly way of carrying out duties that managers can be able to monitor. Three perspectives within the theory include scientific, administrative and bureaucratic management.

The scientific perspective looks at the most effective method to carry out a task. Managers carry out an analysis of a task situation to organize it in a way that the workers will be very productive. The approach describes that managers should use scientific methods to select and develop workers. The administrative approach focuses on the design of each worker’s job. Managers, in this case, look at the whole organization and strategies to make it efficient and not individual parts of the machine. Under the approach, organizational management involves plan, organization, command, coordination, and control of the employees. Another perspective under classical theories is bureaucratic that prescribes a formal structure of managing the employees. The managers under the perspectives make clear definitions of hierarchies as well as roles which the workers are supposed to play. There are divisions within hierarchies that enable strong distinctions of control that will, in turn, make the employees focus on their tasks.         

The theory is similar to the modern and neoclassical approaches in that it views an organization like a system machine. However, the system is made up of only one part, the employee, unlike the others where the system is made up of different elements. Also, the theory differentiates from the other two in that it emphasizes work specialization for each part of the system other than teamwork. Another difference between the classical theory and neo-classical and modern perspectives is that it views an organization as a closed machine system which the environment does not affect. It only concentrates with the employees forgetting about the other factors of production like capital, political and social environments. However, its focus on structure, as well as technical facets of the organization, is similar to the other two theories. The structural aspect is based on how the managers organize the employees in hierarchical forms with work divisions while the technical facet is based on viewing the employees as part of a machine that requires technical measures to improve productivity.

Assumptions of the Perspective

One of the premises of the theory is that good results are possible when there are productive labor and a person to control it with executive ability. Productivity according to the premise is only possible when managers organize and manage labor. However, labor or employees must have the right skills to perform the assigned duty. Another assumption is that the overall productivity of an organization can increase when the output of an individual increase. The assumption emphasizes the need to consider employees as an essential part of the machine where the efficiency of each worker is vital for the overall function of the organization.

Neo-Classical Organization Management Theory

The neo-classical approach is similar to the classical and the modern theories in that it also views an organization as a system. However, unlike the classical approach, the workers’ actions under the perspective do not affect the performance of the system. According to neo-classic view, an organization is a social system that interacts with the environment. The approach is similar to modern theory but different from the classical approach. The organization shapes human behaviors to act in ways they do while carrying out their duties which in turn affects productivity. As a result of the effect of the organization on employee’s behaviors, the perspective views an organization as a combination of formal and informal forms. The aspect is different from the classical approach which only sees an organization from a formal standpoint.

Informal structure of the organization results from the worker’s interactions and their influence by the formal structure. The two forms conflict each other in an organization creating a need to integrate them. Unlike in classical view, where the managers have to make follow up of the workers, neoclassical approach sees the employees as self-motivated to produce goods results for the organization as long as the formal structure does not affect them. Teamwork in this theory is an essential function of the organization where managers can achieve it through the organization of an individual’s behaviors.

While managers in classical approach use an autocratic style with strict rules, the neoclassical approach focuses on the democratic process. Organization affects employees’ behaviors while the managers conform to some of the charters from the workers in the neoclassical approach. The managers are concerned with the emotions and qualities of the employees and therefore, view them as social beings. Employees in the classical approach do not influence the way managers to organize their work. Managers are concerned with the functions and economic benefits of the workers where they view them as function beings similar to parts of a machine.

Assumptions of the approach

Proponents of the neo-classical approach assume that both formal and informal structures exist in an organization and influence each other. The formal structures represent the task organizations set by the managers while the informal structures are the interactions of employees which influence the functions of the leaders. The theory, therefore, assumes that workers are social beings and affects how an organization functions apart from being affected by the leaders.  Another assumption made is that teamwork is an essential element that enhances productivity. Individual employee’s behaviors affect others where their cohesion would lead to improved productivity. The interaction between workers is necessary to share opinions on how to carry out a task, and therefore managers should emphasize on teamwork. Neo-classical also assumes that communication within the organization is important because it carries employees feelings as well as information that enables the organization to perform appropriately. The assumption results from the view that employees emotions are essential aspects of organization functions. They communicate what the workers need from the organization. Also, communication helps to avoid conflict between the formal and informal structures.

Modern Organizational Management Organizational Theory

The modern approach to the organization combines the elements of classical and neoclassical theories to look at an organization as a changing system with the internal and external environment. On the humanistic perspective, the modern approach views an organization as a social-technical structure where the human aspect is an essential element. A social-technical aspect of the component makes the theory similar and different from the classical and neoclassical theories at the same time. It is identical to classical because it looks at the organization as a technical system and with the neoclassical theory because it also assumes that an organization is a social system. The theory argues that an organization is efficient when the managers can organize the employees. Managers under the approach look at ways to satisfy human needs so that they can have job satisfaction and therefore increase productivity. In that case, the theory combines the informal and formal forms making it similar to the neoclassical approach.

Another perspective of the modern theory is the system approach that views an organization as an open system that interacts with both internal and external environments. The aspect makes the approach different from the classical and neo-classical that sees an organization as a closed system. An open system perspective goes beyond the satisfaction of workers to include the growth and survival of the organization. The term opens in an organization according to the modern aspect means that it affects the external environment that comprises of the inputs and outputs. An organization in the open system perspective need to compete for resources to enable efficiency. At the same time, it should not override social needs to allow efficiency since it is a social-technical system that cares for the social needs of the employees. As an open system, the organization is made up of subsystems like the technical to ensures that the work is done, adaptive that relates to changes within the organization and maintenance to ensure that people fit in their roles. Also, there is the managerial subsystem that controls the other subsystems. An organization efficiency depends on its ability to integrate the subsystems with the external environment.

Assumptions of the approach

One of the assumptions made in theory is that an organization is a dynamic system. Both the external and internal environments of an organization keep on changing and so do the organization to maintain efficiency. The proponents of the theory also assume that an organization is probabilistic. It means that the outcome is not predictable but depends on the occurrences in the environment. The assumption approaches differ from the classical and neoclassical theories where they are deterministic that the organization outcomes are predictable. Another hypothesis is that an organization is naturally adaptive. It can adjust to the changes in the environment to maintain efficiency.

How the Perspectives Help to Create a Range of Possibilities for Designing and Managing Organizations

An organization faces different circumstances and therefore needs. At some point, for example, the inputs might be costly compared to what an organization is producing while at other times, the inputs are favorable. The different situations require different management and organization of the elements to either maintain or increase efficiency. Each of the three perspectives provides different strategies to handle the organization depending on the current needs. Although all the three perspectives aim at making the organization efficient and improve outcomes, they do so from different angles and combination as well as consideration of elements. Managers will, therefore, use any of the perspectives to manage the organization depending on factors in abundance and the most efficient to control. When for example the labor is expensive, a classical perspective will be necessary to maximize the work done by each employee. The different perspective, therefore, guides the managers on the elements to change and concentrate on to increase the efficiency of the organization. Organizations keep on changing with the changing environments, and consequently, they may not depend on one static management design. The perspectives provide a framework on what leaders should combine in any situation.

Perspective with the Most Utility

The modern perspective on organization management has the most utility because it combines the elements of the classical and neoclassical theories to become more comprehensive. The aspect can address the component of human satisfaction in production that the classical theory does not address. It means that using the modern view, managers can sustain employee’s productivity without a lot of follow up and for a longer time. In the classical view, managers use a lot of effort to make follow up and coerce employees for productivity which they cannot sustain because they will finally give up from the pressures. The modern perspective also takes consideration of the external environment thereby increasing the efficiency of the organization for productivity and making the management work easy. The external environment is vital elements of an organization whose ignorance may lead to pressure on internal factors like human resource which become inefficient. Allowing the internal and external environments to interact with each other makes the management work simple since they bring the factors of production at a balance. Including the external environment in management adds the advantages of leaping from the improved factors of production.