- [Alex] Classical
management theory is like the great-grandparent of
organizational studies. We're gonna look at the
context at the time it emerged, the three primary theories
that generally make it up, and talk about whether or not
it's still relevant today. (gentle music) So first, let's look at
the context at the time. This came about as a reaction
to the Industrial Revolution which is the late 1700s to late 1800s. Industry equals work,
revolution equals rapid change, big changes in the way people worked, the rapid explosion of big factories. That's what was happening at the time. People were moving from
farms to factories, from small shops to large companies. One of the main sparks or ingredients of the Industrial Revolution was power, steam power and hydropower specifically. The machines used to manufacture in these new large
factories were run on power, not by hand. It's like the difference between a bicycle and a motorcycle. This sped up work dramatically and helped factories grow very quickly. There were also some machinery innovations inside of these factories. For example, in 1873, Eli
Whitney invented the cotton gin. Gin is just short for engine. It was a little apparatus that separated the seed from the cotton much more quickly than
could be done by hand, and inventions and innovations
like the cotton gin and other machines sped
up work even further. Transportation was also
booming at the time. That's another key ingredient
of the Industrial Revolution, like the railroads. They connected most cities in the U.S. by the mid-1800s. Steamboats started to catch
on around 1800 as well, and the roads were improving in general. This rapidly changing
context created a great need. The three ingredients, power,
machinery, and transportation, came together to spark
the Industrial Revolution. There were a lot of
emerging issues at the time that people needed to grapple with. They were new. Large groups of people working together, people working alongside machinery, the pace of industry was
speeding up very quickly, and companies were looking
for more effective ways to handle their new challenges. These issues prompted
a lot of new questions. For example, how are we
gonna organize all this? How are we going to maximize productivity with all these changes? And how are we going to manage all of these people working together? And we're gonna look at three people that answered these questions pretty effectively at the time: Max Weber, Frederick
Taylor, and Henri Fayol. In general, when we talk
about these three guys, we're talking about the founding fathers of the classical management theory, and these are the three
names you're going to see in most textbooks on the topic. So let's start with Max Weber. He's most known for the term bureaucracy, which, to him, meant the organization should look like an
extension of government and the legal system. He wanted a legal-rational
approach to organizing. That meant that he didn't wanna follow the traditional family-type system where the head of the
family was in charge, or perhaps you had a
charismatic type of leader. He thought these were not the right way to run large organizations, and he wanted a legal-rational approach where he saw each person's authority and should be tied to his
or her official position in the organizational hierarchy. In other words, if you're in a job, your responsibilities are
tied to that position, and if you leave that job, you don't keep all that
influence and power. Whoever the new person is is responsible. So this was his way of balancing power and keeping things rational and organized. He wanted clear rules
that governed performance and standardized guidelines
for hiring and firing. So he was really concerned about issues of favoritism or what
he called particularism, and he wanted to hire the best people to work in organizations and organize them in a logical, sensible way. Max Weber was a big
picture type of thinker compared to the two others
we'll look at today, and that big picture term is bureaucracy. Frederick Taylor also
entered the discussion, and unlike Max Weber who
was very big picture, Frederick Taylor is much
more micro in his focus. He used the term scientific
management for his approach. To him, this meant
applying science to work. Specifically, he thought
that the customized approach was very inefficient. He saw a lot of factories and people basically all
doing things their own way. However they wanted to
do their particular job in that organization, they could, and he thought this was not efficient. This was not the best way to do jobs. So he said let's do
time and motion studies to study how much time every
single little task should take and how many motions every
single little task should take, and we can speed things up and come up with the one right way. So each task was broken
down into very small steps and standardized to the one right way, and so, he would go into an organization, look at all of the inefficiencies, and figure out the one right
way to do every single job, and his results were
actually pretty impressive. For example, when he went into
a bricklaying organization, they were laying brick down and they were bending
over to pick them up, and he thought it was
all very inefficient. So he came up with a system where the bricks were
all right at hand level, and they were up on a shelf, and people didn't have to
bend over to pick them up, and he made some other
changes to their time and the way they used their motions, and he sped it about 300%. So now, one bricklayer could
put down as many bricks as it took three to do in the past, so his work was pretty dramatic and successful in some ways. So Max Weber took a big
picture, bureaucratic approach. Frederick Taylor took
a micro level approach to looking at the specific tasks, and Henri Fayol, or Henri
in the French, Fayol, took a mid-level approach. He was looking at the
management side of things. How shall we manage people? That was the big question
that he wondered about. He put forward a theory of management called administrative science, or sometimes, just called
classical management, and he believed that
managers needed to be trained in a much more systematic approach. He didn't really see any
good theories out there for how we should train managers, and so, he wanted to
contribute to that discussion. In fact, he wrote, It is a
case of setting it going, starting general discussion. That is what I am trying to
do by publishing this survey, and I hope a management
theory will emanate from it. So he wrote a book that
then became popular in the late 1940s. In a section of that book, he talked about the management activities that managers should
be pretty competent at, and this is a list that you'll see in many textbooks on the topic. He thought we needed good planning, that managers should look
ahead and chart a course for the organization. He also thought that organization was a key management activity. They need to select and arrange people in an orderly and efficient fashion. He wanted the manager to be in command. In other words, to oversee, to lead, and to drive the process but
to stay out of the details. That was up for the regular workers. Managers should also be
good at coordination, needed to harmonize and
facilitate the general activities of different departments and groups in the overall organization, and lastly, control. The manager needed to ensure
compliance on everything, from accounting, finance,
the technical side, quality control, and other areas. Like I said, this is a
list you're gonna see in a lot of classical
management sections of books when they talk about Henri Fayol. In addition to the details
we talked about for Weber, Taylor, and Fayol, there are also some common elements that they really all wrote
about in one way or another that bring them together. They all wanted a clear
hierarchy in an organization, that chain of command. They all wanted some form
of division of labor. They wanted a standardized
approach to work. They wanted the
centralization of authority, largely in the manager's hands. They wanted the separation
of personal life from organizational. They all really wanted the
best people in the right jobs, and that was one of the reasons why they wanted to separate personal
life from organizational, so people didn't pay favorites. In other words, they wanted
to select the best employees based upon qualifications and performance, and they also, by the way,
wanted people paid fairly, at least in theory. Frederick Taylor and Henri
Fayol talked specifically about paying good employees,
your best people, more so you can attract and keep your best and most talented people. Henri Fayol even talked
about profit-sharing which was pretty innovative at the time, and I say at least in theory because not a lot of organizations necessarily took this advice, but these researchers
did write about that. So Weber, Taylor, and
Fayol all come together to form a foundation of what we call classical management theory, and this is an approach
you're going to see in a lot of textbooks because it really has
become the great-grandparent of organizational studies. Almost everything that comes after the classical management era is a reaction against it. So if you see human
resources or human relations or systems theory or team approach, these are all responses
to or a reaction against classical management, and it's difficult to
imagine an organization that's not influenced by this approach in one way or another, even today. So is it still relevant today? Well, absolutely. You see in a lot of places,
especially in manufacturing, and even though we might
not think that manufacturing is still happening as
much in the United States, it's absolutely still
happening in the United States and all over the world. We have more than seven
billion people on the planet. We're making a lot of things, and you still see this approach in a lot of manufacturing companies. You see it in warehouses and
delivery services like Amazon. You see it certainly in food service. If you've ever worked in
food service like fast food, then everything is really
like a production line. Same thing with farming
and food production. It's really gone almost to look just like a manufacturing process, and so, a lot of ways, not
only is it still relevant, it's still more common than ever. Now of course, it is still
only one way to do things, and some of the new knowledge-based, expertise-based,
information-based companies don't necessarily take this approach, so Google, Facebook, and other
kinds of companies like that are not generally
manufacturing tangible goods, and so, they do not take this classical management approach as much, although they are still very aware of it, and just like the theories we mentioned, like systems theory, human
relations, human resources, they are, in many ways, reacting against the classical management
way of doing things. So it's absolutely still relevant
in many of our workplaces, and when it's not directly touching us, we are certainly indirectly
influenced by it. So that's a little bit about
the context at the time, the three primaries theories that generally make up
classical management theory, and we looked a little bit at whether or not it's
still relevant today, and I believe it certainly is.
