Organisational Behaviour - Classical Theories of Organisational Structure

Classical management theories can be divided into three areas as follow:

1. Scientific Management Theory (Taylorism): Frederick Taylor (1856-1915) is the father of Scientific Management theory. He proposed in this theory that how productivity of workers can be improved by applying scientific methods to their work. He advocated for incentive wage system through which workers can earn extra for their extra work and the management can earn extra revenues. Which also helps in building employees' motivation to work at their full capacity. He used different scientific techniques such as time and motion studies, Gnatt chart, etc for developing scientific methods of performing tasks.

Principles of Scientific Management

Taylor's four important principles of scientific management are as follow:

1. Develop a science for each task of a man's work and replace it with the old rule of thumb.
2. Scientifically select and then train, teach and develop the workman.
3. Management should heartily cooperate with the workers so that it ensures that all the work has been done in accordance with the scientific methods which have been developed.
4. Divide equally the work and responsibility among management and workers. The management take over almost all the work for which they are better fitted than the workmen.

2. Administrative Management  Theory (Fayolism)

3. Bureaucratic Management Theory

Organisational Behaviour - Max Weber's Bureaucratic Management Theory

Max Weber (1864-1920) a German sociologist is the father of bureaucratic theory of management. He wrote the book "The Theory of social and Economic Organisation." According to him Bureaucracy is the organisational structure with highly routine operating tasks performed under formalised rules and regulations with tasks assigned to various departments. It is the formal system of organisation and administration designed to ensure efficiency and effectiveness.

Principles of Bureaucracy

1. Division of work: Work is divided into simple, routine and well defined tasks and categorised on the basis of competency and specialisation.
2. Hierarchy: Positions in an organisation are organised in an hierarchy where superiors control their subordinates.
3. Rules and Regulations: The organisation is governed by certain rules and regulations which have to be strictly followed. It governs decision making and leads to impersonal relationships.
4. Impersonal relations: The conduct of a manager should be highly formal and impersonal, not affected by his personality and personal relations. He should treat all the employees equally.
5. Employment: Selection of the employees is totally formal based on his performance in selection exam and technical knowledge. There is a probation period and after that employee is a full time employee protected from arbitrary dismissal.
6. Jurisdiction: Jurisdiction of work is clearly defined by rules and official duties and is not governed by superior's order only.
7. Departmentalisation: Similar kind of tasks are grouped into functional departments.
8. Records: A written record of day to day all the official activities is maintained in files.
9. Rationality: Decision making is based on rationality on the prescribed rules and regulations and not upon ones liking.
10. Compensation: Compensation of the bureaucrats is not based on work done by them but on the basis of rank held by them in the organisation. They are compensated by regular salary and facility of pension for their old age.

Organisational Behaviour - Fayol's Administrative Management Theory

Henry Fayol (1841-1925) was a French management theorist. He developed Administrative theory of management and wrote the book "General and Industrial Administration". This theory is also known as Fayolism. He developed 14 principles that can be used by management to coordinate the internal (administrative) activities of an organisation. Other theorists who contributed to to administrative management theory were James D. Mooney, Sheldon, Urwick, Luther H. Gulick.

Fayol's functions of management:

1. Planning
2. Organising
3. Commanding
4. Coordinationg and
5. Controling

Fayol classified business operations into six major activities:

1. Technical
2. Commercial
3. Financial
4. Security
5. Accounting and
6. Managerial

Fayol's 14 Principles of Management:

1. Division of work: Work of all kind must be divided and subdivided and then allotted to various persons according to their expertise in a particular area. Specialisation leads to efficiency and economy in business.
2. Authority: Authority and responsibility comes together. Managers must be given authority for performing tasks.
3. Discipline: Discipline means sincerity, obedience, respect of authority and observance of rules and regulations of the enterprise. It can be enforced by the effective leadership and punishment can be applied judiciously whenever required.
4. Unity of command: Subordinates should receive orders from only one superior at a time and they should be accountable to their orders only.
5. Unity of direction: There should be one plan for activities having similar objectives and these activities should be grouped together. They should also be under the command of a particular manager.
6. Equity: Managers should be fair and impartial while dealing with the subordinates.
7. Order: There should be systematic arrangement of things and people in the organisation.
8. Subordination of individual interest to the general interest: There should be harmony between individual and organisation's interests. Organisation's interest should prevail over individual interest.
9. Remuneration: Remuneration paid to the employees should be fair, reasonable, satisfactory and rewarding to the efforts.
10. Centralisation and decentralisation: Centralisation is concentration of power to the management and decentralisation is disseminionation of power to subordinates. Degree of centralisation and decentralisation depends on size of business, experience of superiors, dependability and ability of subordinates, etc.
11. Scalar Chain: It is the chain of authority from top most level to the lowest level. Normally communication is done following the chain of authority. But if there is urgency communication should be done directly between the sender and ultimate receiver cutting short the chain of authority which is known as Gang Plank.
12 Stability of Tenure: Tenure of employee at a particular job should be fixed so that he get used to that work and become efficient at it which will increase quality as well as quantity of his work.
13. Initiative: Management should provide healthy environment to his employees to take initiative, suggest ideas, experiences and new and improved methods of performing jobs. Monetary and non monetary incentives can be useful in this.
14. Espirit De' Corps: Encouraging team spirit, understanding, and trust among work groups helps them to perform better and they offer their best towards the organisation.