We are residing in a world that is upgrading drastically in every field. With new passing days, new ideas are emerging, and so are the competitors. Therefore, to cope up with the situation, we need to implement something better. In the earlier days, a lot of theories were implemented to smoothen the flow of a business.

But with the changing of time, those theories have become ineffective. Also, some theories are still up to a certain extent and merged with modern ideas to give it a new shape. One such theory is the Classical Management Theory.

Classical Management Theory:

The Classical Management Theory is crafted on one belief that the workers or employees only have economic and physical needs. Therefore, it does not consider job satisfaction and social needs. Instead, it advocates centralized decision-making and leadership, profit maximization, and labor specialization. For example, Nucor Steel has found a path to move their industries by managing and leading their workforces by implementing the Classical Management Theory.

This theory is solely designed for streamlining operations, improve productivity and bottom line. The idea of this theory arose in the late 19th century and was prominently introduced at the begging of the 20th century. The principles of this theory are still valid up to a certain extent, especially in the settings of small businesses associated with manufacturing.

The principles of Classical Management Theory:

The seven key principles of this theory are stated below:

• Maximization of profit
• Specialization in labor
• Streamlining of operations
• Focus on productivity
• Select-few or single-person decision making
• Centralized leadership
• Focus on the bottom line

Concepts of a perfect workplace:

The Classical Management Theory outlines a perfect workplace that is based on three major concepts:

• Specialization: In this theory, an assembly line view of a workplace is considered. The big tasks are divided into small ones which can be easily accomplished. As the workers get a clear understanding of their roles, they specialize in a single area. This not only improves productivity but also eliminates the need for workers to perform multi-tasking.
• Hierarchical structure: Under this theory, a workplace is divided into three management layers. At the topmost position, there will be the board of directors, executives that initiates long-term objectives, and the owners. The middle management holds the responsibility to oversee supervisors, set objectives at the department level, and make sure that they fit within the managers' budget. The supervisors manage the regular activities, address the problem with the employees, and give training, and remain at the lowest level in the chain.

• Incentives: As the Classical Management Theory believes that the workers are encouraged or motivated by financial rewards, the theory proposes that the workers will work better and become more productive when they are awarded incentives based on their performance. The employers who use this tactic may achieve enhanced efficiency, profit, and production.

Conclusion:

Autocratic leadership is considered to be the central part of the Classical Management Theory. It eliminates the need to consult huge groups of people to facilitate decision-making. A sole leader can make an ultimate decision, and it is provided in a downward direction to which everyone follows. This particular approach is very beneficial when decision-making is needed to be done quickly.

“Classical Management Theory would have us believe that the fastest way to get a square peg through a round hole is to use a bigger hammer.”- John Hoover.