It advocates financial rewards, wage hikes and incentives to encourage employees to be more productive. The classical theory prioritizes employees’ physical and economical requirements over job satisfaction and social needs. Work is divided among individual workers who specialize in their own distinctive fields. Workplaces are segregated into three levels of authority: business leaders or top-level management, middle management and supervisors. The classical approach to management focuses on centralized authority, labor specialization and incentives to optimize productivity in an organization and, in turn, drive profits. The classical organizational theory views an organization as a machine and employees as the various parts of that machine. The classical theory of management in organization, or the classical organizational theory, was one such approach to management that emerged in the late 19 th century and gradually gained ground over the first half of the 20 th century. This led to a spike in management ideas to streamline operations and motivate employees to function better. These organizations began looking for ways to drive employee productivity and increase profits. What Is Classical Theory Of Management?ĭuring the industrial revolution, a number of large-scale organizations came into being with widespread factory production.

Let’s explore one such management approach in detail-the classical theory of management in organization. For decades, organizations-big and small-have relied on effective management policies and procedures to increase employee productivity, improve operational efficiency, optimize use of resources, achieve organizational goals and stay ahead of the competition. An organization without proper management is like a boat without a rudder.

Classical management theory