Classical Management in Modern Organizations

Despite tracing its lineage back to the early 19^th century (if not before), the classical theory of management is alive and well as a prominent form for today’s organizations of all types. Many corporations, businesses, non-profits, public agencies and other entities reflect the trademark principles espoused by the theory’s adherents Frederick Taylor, Henri Fayol, Max Weber and others, such as division of work, reporting discipline, unified direction and order.

Practically speaking, this predominance is not likely to change. Organizations will be hesitant to adopt radically different forms due to an aversion to change generally, and especially if such change threatens two things that people most cherish, power and wealth. Regardless, the viability of classical management, at least in its purest form, for contemporary organizations is questionable.

As evidence of this position, I can cite the many organizations, large and small, in various sectors that I have encountered during a 30-year public relations career. It seems as if every one used a classical management approach with relatively minor variations, and with varying degrees of success. One client, a law firm, is a good illustration.

The firm structure was typical for contemporary law firms. At the top of the organizational chart were the executive board and managing partner, followed in order by the equity partners, department chairs, practice group leaders and associates at the bottom. As this structure suggests, the firm grouped attorneys by departments and areas of practice specialties (in the modern law firm, there are almost no generalists), reflecting Fayol’s principles of management such as division of work and unity of command and direction (Modaff, Dewine, & Butler, p. 31).

The non-attorney support staff constituted its own separate, sub-organizational structure managed by a chief operating officer who reported directly to the managing partner. These staff members included paralegals, legal secretaries and personnel who handled marketing, technology, human resources, facilities, and other specialized operational functions.

Over decades, this law firm achieved respect and consistent profitability with an organizational structure that changed little. In that respect, a classical management approach could be deemed an operational success. However, there were signs that the model was not viable or optimal, especially for non-legal staff. Management allocated comparatively little for their professional development compared to attorneys. This violated the element of Taylor’s theory of scientific management that prescribed “careful selection and training of the best workers” (Modaff et al., p. 27) as well as the principle of equity in Fayol’s Administrative Theory (p. 31). Counter to Weber’s chain of command and Fayol’s Scalar Chain, authority was confusing and often politicized, as equity partners sometimes exerted inordinate influence over matters such as work assignments and compensation regarding non-legal staff and associates, including those they did not supervise (pp. 32, 37).

Certain aspects of classical management would seem to make sense for law firms, such as division of work, unity of command and direction, reporting discipline and esprit de corps (Modaff et al., pp. 31-32). But there is a big difference between theory and application. In my personal and professional experience, the mentality of many lawyers does not complement these concepts. The “billable hour” metric can make lawyers self-focused and less inclined to subordinate their personal interests to the common good (p. 31). Some lawyers can be difficult to manage, especially if they are made answerable to a peer, and many do not accept the premise that trained managers are better qualified to make decisions about the business aspects of the firm. These and other sentiments suggest that some lawyers may not be adherents to either the spirit or letter of the law regarding Fayol’s five Elements of Management: planning, organizing, command, coordination and control. (pp. 34-35).

Moreover, legal work may be too complex to accommodate scientific management techniques that are best suited to “straightforward task situations that require no flexibility in responding to contingencies and that offer no opportunities for initiative” (Eisenberg, Goodall, & Trethewey, 2014, p. 72).

For classical management techniques to be truly viable, managers must heed the enlightened intent of theorists who were as concerned about fairness, respect, morale and job longevity as productivity and efficiency. This is a very tall order. Consider Home Depot, one of the world’s largest retailers, where CEO Robert Nardelli is applying classical management techniques with, quite literally, militaristic precision. Improved profitability and cost efficiencies indicate some success. But after five years of effort, Wall Street remains unconvinced while his approach has created a “culture of fear” among “demoralized” managers and line staff, with a corresponding toll on customer service (Grow, Brady & Arndt, 2006.).

The implications are clear: without proper balance that places equal value on the human condition of the workers, classical management’s applicability and relevance for modern organizations will remain limited.

Classical management theorists worked in periods when social understanding of power and privilege were very different from what we know. Yet their work implies certain egalitarian ideals that, at least theoretically, are still relevant. Would their concepts have been different if they were working today?  How?

REFERENCES:

Eisenberg, E.M., Goodall, H.L., Jr., & Trethewey, A. (2014). Organizational Communication: Balancing Creativity and Constraint (7th ed.). Boston: Bedford/St. Martin’s. (ISBN: 978-1-4576-0192-7).

Modaff, D.P., DeWine, S., Butler, J.A. (n.d.). Organizational Communication: Foundations, Challenges, and Misunderstandings (2^nd Ed). Boston: Pearson.

Grow, B., Brady, D., & Arndt, M. (2006). “Renovating Home Depot.” Retrieved from http://www.bloomberg.com/bw/stories/2006-03-05/renovating-home-depot.