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Classical Theory of Management

Classical Theory of Management


Classical Theory of management claims that workers have only physical and economic needs. It does not bother about worker’s social needs or job satisfaction, but instead promotes specialization of labor. It wants centralized power so that It can implement its policies and thus decision making will become easy. This theory helps in maximizing profit.

This theory designed operations to increase productivity and develop the bottom line. This belief and thought developed in the late 19th century and captivated support through the first half of the 20th century. This theory is not prevalent widely in modern times but this theory recommends some principles that are still valid in small organization settings with respect to industries.

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Ideal Organisation in Classical Theory

Concepts of the Ideal Organization in Classical Theory

This theory depicts an ideal workplace based on three main concepts:

Hierarchical structure 

According to classical management theory, the workplaces are divided into three different layers of management. At the top are the owners, board of management comprising of directors that make the policy for the organization. Middle management has the responsibility of supervising and implementing policies at the department level. At the lowest level are supervisors, whose duty is to manage daily activities and provide solutions to employee’s problems and also provide the required training.


The classical management theory advocates the principles at the workplace where large tasks are broken down into smaller ones so that it becomes easy to accomplish and complete on time. Individually all the workers are given roles which they are comfortable in doing it. The work is based on the worker’s specialization in that field. This definitely helps in increasing productivity and efficiency.


This Classical Theory supports and recommends that employees get motivated by financial rewards. It advocates that employees will definitely work harder and ultimately gets more productive when workers are awarded incentives based on their work. In any organization, Employers should motivate their employees by using this tactic to achieve their target. This target gets achieved by increased production. This production was increased due to the efficiency of workers and ultimately the organization gets huge profit.

Advantages of Classical Theory

The classical management theory does have some following advantages:

It has formulated clear structure for management, what functions and operations it will provide.

There is division of labor on the basis of specialization that makes tasks easier and more efficient to accomplish, thus it enhances productivity

There is specified nature of task given to each employee and brings an end to guesswork

Here in this system one man show is there, he will take final decision and later on conveyed to all workers and they have to follow it. In this system, this leadership approach is very beneficial as the decisions are to be taken quickly in short time by one leader, rather than a taking everybody’s opinion and ultimately wasting time and can’t get on conclusion quickly.

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Disadvantages of Classical Theory

By implementing the Classical Theory, Organization productions get increased and have huge profit but it has some disadvantages also.

This theory principle tries to control human behaviour and overlooks the importance of human relations and values.

This theory has no compassion for workers and just see their workers as machines. Management attitude is very indifferent. They have no emotions for their workers. They are not bothered by the workers job satisfaction. They don’t think about the moral values of workers.

This theory supports the view that previous experience and the specialized ability should be applied to manufacturing settings without judging the present requirements.

Decisions are taken by one man of company or so called management. The workers of the organization are neglected and have no role in decision making. There is no voting right of workers.


The Classical Management Theory should be implemented at the companies or industries where there are manufacturing operations going on and some productivity problem has aroused. Productivity is a must in these industries and this Classical theory helps in increasing production.

But as the different organizations of different countries emphasized on human relations and labor laws were implemented. This Classical theory became weak and people gave values to human relations and motivations. Today new laws have been made keeping in mind, the welfare of workers.

So this theory also had some positive and negative aspects. Understanding people’s values is very important rather than always think of increasing production in an inhuman way.


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