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

There are many ideas that have been proposed for organizational management, but the classic one is one of the most important and widespread.

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

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What is the Classical Theory of Administration?

The classical management theory is a thesis proposed by the French mining engineer, Henri Fayol, as an organization management method. 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 achieving this goal was to eradicate or at least minimize all possible misunderstandings that could arise in each phase of all these processes and that in the end would be translated on

a minimization of the use of resources, including of course the time and manpower required.

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

To understand the keys to the classical theory of administration, one must first look at the historical moment in which it arose. It was about the France of the late nineteenth and early twentieth centuries. 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 ruling class while the working class was the basis of the emerging industry.

Fayol argued that the key to achieving maximum productivity was to adequately control the activity of workers through impeccable management. That's where classical management theory comes in, a system that is suitable for both their own organizations as well as for the institutions of the State and even for the management of the economies domestic.

What Henri Fayol pointed out with this method is that it was essential to make a forecast of the situations in which the entity he was going to face it throughout his activity and develop a planning in line with that scenario, so that, when the moment, you just had to stick with the planned plan instead of improvising or making bad decisions and having to rectify later.

Thanks to this simple but effective approach, the organization would be prepared for a whole range of situations in advance and therefore uncertainty and waste of company resources would be reduced. Faced with a certain incident, you would only have to review the planned scheme to know how to act quickly and efficiently, without wasting time or more resources than necessary.

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The principles of this theory posed by Henri Fayol

To develop the classical theory of administration, Henri Fayol established fourteen points that are those that every organization had to fulfill if it wanted to obtain the benefits of this thesis. We will see each of them below.

1. Division of labour

Within an organization there are a multitude of tasks to be carried out and most of them require specialization. Therefore, It will be necessary that there be adequate personnel to be able to carry out each of the parts of the production process, making each member of the staff the specialist in their 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 pretend that a worker was an expert in each and every one of the processes 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 claimed that the presence of a leader who took responsibility for the work of all his subordinates was essential and represent an authority for them.

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3. Discipline

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

4. Unity of command

For the classical theory of administration, unity of command was also an indispensable requirement. Fayol considered that power, ultimately, had to be represented by a single person, because if there was more than one, there was a risk of falling into non-unanimous decisions, differences of criteria and, ultimately, a series of issues that would weaken the authority we talked about earlier and that would affect the efficiency of the organization.

5. Steering unit

Not only a unity of command is required, but also of leadership. Namely, Each member of the company will have their own tasks and responsibilities, but all of them have to go, inevitably, in the same line, in the same direction. If any task is causing damage to another department, it is because it is not well planned and therefore it is reducing the efficiency of the production processes.

6. Subordination of the individual interest to the general

Fayol, in his classical theory of administration, stated that the general interest is the one that must always prevail when making decisions for the company, to the detriment of the interest individual. In other words, 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 classical management theory talks about remuneration as a form of employee motivation. Therefore, said salary must be fair and appropriate to the task carried out by him. But in addition to money as such, other elements can be used to complement the worker's payroll 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 administration. Positions and responsibilities must be clear from the beginning. Each employee must know to whom he is answerable and must know that he is subordinate to that person, who in turn will be subordinate to another, until reaching the command unit.

9. Centralization

Likewise, that unity of command of which we were talking must also translate into a centralization of authority in a few people, spread over the different departments in a way hierarchical. It is observed that all points of classical management theory are related to each other and they need each other to achieve the ultimate goal, which is efficiency improvement.

10. Order

Order must prevail in the distribution of spaces and tasks in the organization. If two departments carry out complementary tasks and interact regularly, the logical thing is that they are placed as close as possible to that there is no loss of time when communicating with each other.

11. Equity

The treatment for all components of the company should be governed by fairness, according to the classical theory of management. This it does not mean that everyone has to receive the same remuneration, for example, since not everyone carries out the same tasks. But between two people who perform similar functions, indeed, the compensation must 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 to proceed, it will be slowing down the company's production, therefore affecting efficiency.

13. Initiative

Within the hierarchy and the standards to be met, it is good that there is a certain initiative when carrying out activities within the organization. That 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 one of the members, each in his or her position, is part of a whole, and as such they must be considered.

Bibliographic 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.