Advantages and Benefits of the Classical Management Theory
Classical management theory was introduced in the late 19th century. It became widespread in the first half of the 20th century, as organizations tried to address issues of industrial management, including specialization, efficiency, higher quality, cost reduction and management-worker relationships. While other management theories have evolved since then, classical management approaches are still used today by many small-business owners to build their companies and to succeed.
Clear Hierarchical Structure
One of the advantages of the classical management structure is a clear organizational hierarchy with three distinct management levels. Each management group has its own objectives and responsibilities. The top management is usually the board of directors or the chief executives who are responsible for the long-term goals of the organization. Middle management oversees the supervisors, setting department goals according to the approved budget.
At the lowest level are the supervisors who oversee day-to-day activities, address employee issues and provide employee training. The levels of leadership and responsibilities are clear and well defined. While the three-level structure may not be suitable for all small businesses, it can benefit those that are expanding.
Clearly Defined Division of Labor
One of the advantages of classical management approach is the division of labor. Projects are broken down into smaller tasks that are easy to complete. Employees' responsibilities and expectations are clearly defined. This approach allows workers to narrow their field of expertise and to specialize in one area. The division of labor approach leads to increased productivity and higher efficiency, as workers are not expected to multitask. Small-businesses owners can benefit from taking this approach if they are looking to increase production with minimal expense.
Motivated by Money
According to classical management theory, employees should be motivated by monetary rewards. In other words, they will work harder and become more productive if they have an incentive to look forward to. This gives management easier control over the workforce. Employees feel appreciated when being rewarded for hard work. A small-business owner can take this approach to motivate the employees to achieve production goals.
Single Leader Makes Decisions
The autocratic leadership approach is the central part of classical management theory. It states that an organization should have a single leader to make decisions, to organize and direct the employees. All decisions are made at the top level and communicated down. The autocratic leadership approach is beneficial in instances when small-business decisions need to be made quickly by a leader, without having to consult with a large group of people, such a board of directors. Small businesses, especially sole proprietorships, can have an advantage in taking this approach, as they need a strong leader to grow.
Julianne Russ has been a freelance writer since 2009. She specializes in articles about banking, management, foreign languages and education. She has a Bachelor of Arts in international management from Hamline University in St. Paul, Minn.