Classical Organization Theory

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Neoclassical Organization Theory

The organization was seen by the classical authors as a machine and human beings as components of that machine. They were of the belief that the organization's effectiveness could be enhanced by making human beings successful. Specialization and organization of events were their focus. Most of the authors placed emphasis on top-level productivity and a few on lower organizational levels. That is why streams have been created by this theory; scientific leadership and administrative leadership. The scientific leadership group was primarily concerned with the activities to be carried out at the organizational level.

Henry Fayol learned the principles and roles of management for the first time. Some writers, such as Gullick, Oliver Sheldon, Urwick, called the issue where it is important to define activities to achieve organizational goals. To make the functions effective, grouping, or departmentation was also considered necessary. Since this philosophy revolves around the structure, it is also called a structural organizational theory.

The conventional theory is the Classical Theory, where more focus is placed on the organization rather than the workers working therein. The organization is regarded as a machine according to classical theory, and human beings as various components/parts of that machine. 

Classical Organizational Theory is very important as the first step toward a systematic analysis of organizations. 

It deals mainly with the morphology of formal organizations and also treats one as a machine and the workers as components of the machine.

Therefore each employee employed in it must become productive in order to improve the organization's efficiency. 

6 Pillars of Classical Organizational Theory -

Classical theory's main pillars or components are as follows -

  1. Division of Labor- The company must divide work in order to achieve a specific specialization in order to enhance the efficiency of individual employees.

  2. Departmentalization-The company needs to organize into divisions different tasks and jobs. This enables expenditures to be reduced and administrative control facilitated as well.

  3. Coordination -The company must guarantee peace between the different functions. This allows the collective effort to be organized in an orderly way that offers unity of action when serving a common goal.

  4. Scalar and Functional Processes - The sequence of superior-subordinate relationships in an organization from top to bottom is a scalar chain. It encourages the delegation, contact or input, of authority or order, and also remedial action or decision.

  5. Structure - Structure is the conceptual relationship in an organization between functions. In addition, for efficient goal achievement, these functions are organized.

  6. The span of Control -This is the number of subordinates that can be efficiently overseen by a boss.

There have been critiques of classical theory on many levels.

Criticisms of the Classical Organizational Theory - 

  • It takes a rigid view of organizations as well as a static one. 

  • An organization is regarded by most classical theorists as a closed structure with no interaction with its environment. 

  • More on the systemic and even the technical aspects of organizations, the theory focuses. 

  • It is founded on assumptions that are oversimplified and mechanistic.

The emphasis of Classical Theory, in simple terms, is on an organization without individuals. 

Therefore in dealing with the complexities of the structure and operation of an organization, many experts consider it insufficient. 

In addition, it gives an imperfect description of human actions in corporations.

The new-classical approach is contained in two points:

(i) The organizational situation should be perceived in social, economic, and    technological terms


(ii) The social mechanism of group behavior can be understood in terms of the clinical method analogous to the doctor's diagnosis of the human body.


Formal and informal modes of organization are seen as significant in this theory. The other contribution of new-classical thinkers is the behavioral approach adopted in this theory. The foundations of classical theory, in other words. Job division, department, coordination, and human actions were taken as given, but these postulates were considered to be changed by individuals acting individually or within the informal organization context.

FAQ (Frequently Asked Questions)

Q1: What are the Six Pillars of Classical Organizational Theory? Why Did the Classical Theory Receive Criticism?

Ans: The conventional theory is the Classical Theory, where more focus is placed on the organization rather than the workers working therein. The organization is regarded as a machine according to classical theory, and human beings as various components/parts of that machine. The six pillars are:

  1. Division of Labor

  2. Departmentalization

  3. Coordination

  4. Scalar and Functional Processes

  5. Structure

  6. Span of Control

Organizations are regarded by classical theory as machines and human beings as parts of the system. Classical thinkers, therefore, thought that with the effectiveness of human beings, the efficiency of the company increases. This theory does, however, take a rigid and static view of organizations. It also focuses mainly on an organization's operational and technical aspects with the belief that it does not engage with its environment.


Finally, mechanistic and oversimplified assumptions are the foundation of the theory. The critique of Classical theory contributed to these aspects.

Q2: Explain the Characteristics of Classical Theory?

Ans: The classical theory has the following characteristics.

  1. It is based upon a model of accounting. 

  2. It emphasizes the detection and correction of errors after they have been committed. 

  3. It is more about the quantity of production than about human beings. 

  4. It is considered that humans are relatively homogeneous and unmodifiable. Thus, on the basis of various forms of employment to be done in an organization, labor is not divided. 

  5. It is believed that workers in a company are relatively stable in terms of transition.

  6. It is believed that in order to have a centralized and integrated structure, power and control should be delegated only to the central authority.

Some writers of classical theory stressed the organization's technical aspects and how people can be made more effective, while others emphasized the organization's institutional aspects such that people can be made more efficient collectively. Thus this view of various writers resulted in the existence of two separate streams:

  • Scientific Management Stream

  • Administrative Management Stream

According to this theory, human beings are thus merely treated as a means of development.