An early form of organization theory, pioneered mainly by Henri Fayol (1841–1925), which was concerned principally with achieving the ‘most rational’ organization for co-ordinating the various tasks specified within a complex division of labour (see his Administration industrielle et générale, 1916). The translation of this book into English as General and Industrial Management (1949) implies that Fayol was concerned mainly with business management, although he himself makes it clear that his ideas about management were intended to apply to all formal organizations, including political and religious undertakings. Expressing the French ‘administration’ as ‘management’ has also led to the alternative designation of this approach as the ‘classical school of scientific management’. More recent exponents include Lyndall Urwick and Peter F. Drucker.
Fayol, who is acknowledged to be the earliest advocate of a theoretical analysis of managerial activities, identified the key functions of management as being those of forecasting and planning. The most rational and efficient organizations were, in his view, those which implemented a plan that facilitated ‘unity, continuity, flexibility, precision, command and control’. Universal principles of administration were then distilled from these objectives. These include the key elements of the scalar chain (authority and responsibility flowing in an unbroken line from the chief executive to the shop floor); unity of command (each person has only one supervisor with whom he or she communicates); a pyramid of prescribed control (first-line supervisors have a limited number of functions and subordinates, with second-line supervisors controlling a prescribed number of first-line supervisors, and so on up to the chief executive); unity of direction (people engaged in similar activities must pursue a common objective in line with the overall plan); specialization of tasks (allowing individuals to build up a specific expertise and so be more productive); and, finally, subordination of individual interests to the general interest of the organization. This list is not exhaustive, but illustrates the key proposition of administrative theory, which is that a functionally specific and hierarchical structure offers the most efficient means of securing organizational objectives (see M. B. Brodie, Fayol on Administration, 1967).
Classical administrative theory, like its near-contemporary the scientific management approach, rests on the premises that organizations are unproblematically rational and (effectively) closed systems. In other words, organizations are assumed to have unambiguous and unitary objectives, which the individuals within them pursue routinely, by obeying the rules and fulfilling their role expectations, according to the prescribed blueprint and structure. Moreover, in the attempt to maximize efficiency, it is only variables within that structure that need to be considered and manipulated. The interaction of the organization with its environment, together with the various factors which are external to the organization but nevertheless have consequences for its internal functioning, are systematically ignored. Clearly, both perspectives take a rather deterministic view of social action, since each assumes that individuals will maximize organizational efficiency, independently of their own welfare, and with no thought for the relationship between the collective goal and their own particular purposes. Human Relations Theory in organizational analysis, an otherwise diverse group of writers and approaches, is united by its opposition to precisely this assumption. Despite such criticisms, the classical theory of administration has exerted considerable influence on the fields of business studies and public administration, and it still provides the basic concepts which many managers use in clarifying their objectives.