The Classical Theory of Management: what is it and what are its key ideas?

A summary of the Classical Theory of Management, developed by Henri Fayol.

Many ideas have been proposed for organizational management, but the classical theory is one of the most important and widespread.

Below we will compile the most important data in order to have a global understanding of everything related to these studies, to know the reason for its origin and the fundamental principles on which it is based. the classical theory of management.

What is the classical theory of management?

The classical theory of management is a thesis proposed by the French mining engineer, Henri Fayol, as a method for managing organizations.. This theory was proposed in 1900. Fayol's objective was to achieve a notable improvement in the efficiency of the different administrative processes involved in production within a company.

One of the keys to achieve this purpose was to eradicate or at least reduce to the minimum possible all the possible misunderstandings that could arise at each stage of all these processes and that in the end would translate into a minimization of the use of resources, including of course the time and manpower required..

Henri Fayol tried to promote the classical theory of management by trying to transmit these concepts and practices directly to those responsible for the management of different industries, so that they could implement this methodology in their corresponding organizations. Thanks to these ideas, they would soon observe an improvement in the efficiency of the entire system.

To understand the keys to classical management theory, we must first situate ourselves in the historical moment in which it emerged. This was France at the end of the 19th and beginning of the 20th century. It was a country that had just undergone the metamorphosis of the revolution and had completely changed the social order. The bourgeoisie had established itself as the predominant class while the working class was the basis of the emerging industry.

Fayol argued that the key to achieving maximum productivity was to properly control the activity of the workers through impeccable management.. This is where the classical theory of administration comes in, a system that is suitable for both the organizations themselves and for the institutions of the State and even for the management of domestic economies.

What Henri Fayol pointed out with this method is that it was essential to forecast the situations that the company would face throughout its activity and to plan in line with that scenario, so that, when the time came, it would simply be necessary to follow the plan rather than improvise or make bad decisions and have to rectify them later.

With this simple but effective approach, the organization would be prepared for a range of situations in advance, thereby reducing uncertainty and wastage of company resources.. In the event of a given incident, all that would be required would be to review the planned scheme in order to know how to act quickly and efficiently, without wasting time or more resources than necessary.

The principles of this theory put forward by Henri Fayol

In order to develop the classical theory of management, Henri Fayol established fourteen points that every organization had to comply with if it wanted to obtain the benefits of this thesis. Each of them will be discussed below.

Division of labor

Within an organization there are a multitude of tasks to be performed and most of them require specialization. Therefore, it will be necessary to have adequate personnel to carry out each of the parts of the production process, so that each member of the staff has the necessary skills to carry out each of the tasks.This makes each member of the staff a specialist in his or her specific task.

In this way it is much more efficient than if the same person has to be in charge of very different activities that require training in each of the fields involved. It would be inefficient and even unrealistic to expect an employee to be an expert in each and every process carried out in the company.

2. Authority and responsibility

The second point proposed by classical management theory has to do with authority and responsibility. Fayol stated that the presence of a leader who was responsible for the work of all his subordinates and who represented an authority for them was indispensable. and represented an authority for them.

3. Discipline

In line with the previous point, discipline would be a fundamental element for workers to assume the authority that the bosses represented for them. Likewise, this discipline would make them carry out their tasks in the most appropriate way to achieve the company's objectives. of the employee, his or her team and, ultimately, the entire organization.

4. Unity of command

For classical management theory, unity of command was also an indispensable requirement. Fayol considered that power, in the final analysis, had to be represented by a single person, because if there were more than one person, the organization would be in the hands of a single manager.If there were more than one, there was a risk of falling into non-unanimous decisions, differences of criteria and, in short, a series of issues that would weaken the authority we spoke of earlier and that would have repercussions on the efficiency of the organization.

5. Unity of direction

Not only is unity of command required, but also unity of direction. That is to say, each member of the company will have his own tasks and responsibilities, but all of them must inevitably be in the same line, in the same direction.in the same direction. If any task is causing any damage to another department, it is because it is not well planned and therefore is detracting from the efficiency of the production processes.

6. Subordination of the individual interest to the general interest

Fayol, in his classic theory of management, stated that the general interest is what should always prevail when making decisions for the company, to the detriment of the individual interest. In other words, when faced with a decision in which one option favors one or a few and another that favors more people or processes in the organization, the second alternative should always be chosen..

7. Remuneration

The seventh point of the program of the classical management theory talks about remuneration as a form of employee motivation. Therefore, the salary must be fair and appropriate to the task performed by the employee. But in addition to money as such, other elements can be used to supplement the employee's paycheck and make him feel valued and motivated.

8. Hierarchy

Although other previous points already anticipate this point, Fayol wants to make it clear that hierarchy is essential for a good implementation of the classical theory of management. Positions and responsibilities must be clear from the beginning.. Each employee must know to whom he is accountable and must know that he is subordinate to that person, who in turn will be subordinate to another, until the unity of command is reached.

9. Centralization

Likewise, this unity of command that we were talking about must also be translated into a centralization of authority in a few people, distributed hierarchically throughout the different departments. It can be seen that all the points of classical management theory are interrelated. and they need each other to achieve the ultimate goal, which is to improve efficiency.

10. Order

Order must prevail in the distribution of spaces and tasks in the organization. If two departments perform complementary tasks and interact regularly, it is logical to place them as close together as possible so that there is no waste of time when There should be no loss of time when communicating between them..

11. Fairness

The treatment of all the components of the company must be governed by equity, according to classical management theory. This does not mean that everyone has to receive the same remuneration, for example, since not everyone performs the same tasks.. But between two people performing similar functions, compensation should indeed be the same, unless other variables come into play that determine otherwise.

12. Stability

The structure of the organization must be as stable as possible.. If there is a high turnover and new people must constantly learn the ways of proceeding, the company's production will be slowed down, thus affecting efficiency.

13. Initiative

Within the hierarchy and the rules to be followed, it is good that there is a certain initiative when carrying out activities within the organization. This proactivity will be a good indication of the good work of the employees and should be valued as such..

14. Team spirit

The last point of classical management theory is none other than team spirit. Each and every member, each in his or her position, is part of a whole and should be considered as such.and must be considered as such.

Bibliographical references:

• Breeze, J.D., Frederick C.M. (1980). Henri Fayol: A New Definition of Administration. Academy of Management Proceedings. Academy of Management.
• Fayol, H. (1916). General principles of management. Classics of organization theory. Harcourt Brace Orlando, FL.
• Pearson, N.M. (1945). Fayolism as the necessary complement of Taylorism. The American Political Science Review.