Administrative Theories: Approaches and Basic Theories

• Study notes follow on the main administrative theories and their main approaches and basic theories.

Basic Theories of Administration

• Focus on scientific theory and classical theory.

Emphasis on Tasks

• Relates to scientific administration and the rationalization of work at the operational level.
• Classical theory involves formal organization.
• Neoclassical theory covers general administration principles and administrator functions.

Emphasis on Structure

• Theory of bureaucracy includes formal bureaucratic organization and organizational rationality.
• Structuralist theory involves multiple approaches, formal organization, informal intra-organizational analysis, and inter-organizational analysis.

Emphasis on People

• Theory of human relations involves informal organization with motivation, leadership, communications, and group dynamics.
• Organizational behavior theory focuses on administration styles, decision theory, and integrating organizational and individual goals.

Emphasis on the Environment

• Organizational development theory includes open system approaches and planned organizational change.
• Structuralist theory entails intra-organizational and environmental analysis along with open system approaches.

Emphasis on Technology

• Neo-structuralist theory also focuses on an open system approach.
• Contingency theory relates to the administration of technology, described as technological imperative.

Classical Approach to Administration

• Developed by Frederick Winslow Taylor and Henri Fayol at the start of the 20th century
• Taylor focused on increasing efficiency through work rationalization.
• Fayol focused on increasing company efficiency through organization and scientific administration principles.
• Their concepts form the basis of the traditional classical approach, which dominated organizational administration for four decades.
• The classical approach divides into two interrelated but distinct orientations.

Scientific vs Anatomical Approaches

• Scientific administration, led by Taylor, Gantt, Gilbreth, Emerson, and Ford, aimed to increase company productivity by increasing operational efficiency, which is typically done from the bottom up.
• The anatomical and physiologist approach, led by Fayol, Mooney, Urwick, and Gulick, targeted increased company efficiency through the structure and arrangement of organizational components, which is typically done from the top down
• Scientific administration is pragmatic, while anatomical administration is theoretical and administratively oriented.

Origins of the Classical Orientation

• The classical approach came from the consequences of the industrial revolution, which includes the accelerated growth and disorganization of companies, creating complexity in administration and requiring a more scientific approach rather than empiricism and improvisation.
• Another reason was the growing need to increase efficiency and competitiveness to maximize resource performance, and it gave rise to the rise Taylorism in the U.S. and Fayolism in Europe.
• This lead classical authors to develop administrative science to solve organizational problems.

Scientific Administration

• The focus is on tasks, with an attempt to apply scientific methods to administration for industrial efficiency using observation and measurement.
• It started with mechanical engineer Frederick W. Taylor,

Work of Taylor

• Frederick Wilson Taylor (1856-1915) was focused on discipline, dedication to work, and savings.
• He studied production problems in detail, with experiences helping him apply his ideas to overcome resistance.

Taylor's Periods

• First Period:
  • Focused on worker studies, later generalized to administration.
  • Developed techniques for worker rationalization via motion and time studies.
  • Advocated for high salaries, low unit production costs, and the scientific application of global problems
  • He also worked on standardized processes and scientific work criteria and employee training with corporate and worker cooperation.
• Second Period:
  • Rationalizing work should go in line with a general company structure.
  • Published "Principles of Scientific Management" in 1911.

Work Rationalization

• Scientific analysis and study of time and motion are used to identify and improve work methods and tools, replacing personal discretion of workers with more efficient processes.
• This is sought out to be called the rational organization of work.

Principles of Scientific Administration

• Planning: Replace individual worker criteria with scientific methods and planning.
• Preparation: scientifically select, train, and prepare workers according to their aptitudes.
• Control: Ensure work is executed according to standards and plans.
• Execution: Clearly distribute responsibilities and ensure disciplined work execution.

Additional Principles

• Study and break down work into elementary movements and time it to eliminate unnecessary steps.
• Study each job before setting how it should be done and then select workers according to the work assigned.
• Provide technical instructions to workers, adequately train them, and separate planning from execution.

Other Principles

• Aim to specialize and train workers in both planning and control and prepare production and set standards and rewards.
• Also, standardize tools, machines, and work methods, distribute benefits of increased production proportionally, and control and reward performance.
• Classify materials and processes for easy handling and incentivize greater efficiency.

Efficiency Principles of Emerson

• These were intended to simplify the work of Taylor by reducing expenses in analysis, and develop employee selection techniques.
• Principles are as follows:
  • Have a well-defined plan
  • Use common sense
  • Maintain competent guidance
  • Have/Maintain discipline and honesty
  • Keep accurate records
  • Set proportional pay and standards
  • Establish clear instructions, and incentivize performance.

Basic Ford Principles

• Ford employed vertical and horizontal integration, from raw material to final product.
• Through production rationalization, he created the assembly line for mass production of standardized products.
• The three basic principles he adopted were:
  • Intensification – reduce production time.
  • Economicity – minimize raw material volume in transformation.
  • Productivity – increase worker output through line assembly.

Additional Ford Points

• The company had an accelerated production via rhythmic and coordinated work, offering incentives for employee, technical assistance in marketing, a dealer system, and intelligent pricing.

Exception Principle

• Focusing on deviations from normal patterns, normal patterns do not require admin attention.
• Frequent tasks should be routine and delegated, with serious issues reserved for superiors, based on condensed reports showing deviations.

Criticisms of Scientific Administration

• The mentalities of both leaders and employees and lack of solid administrative knowledge and industrial expertise are not diminished by the criticism of the theory.
• The factors that prevented deeper concept elaboration includes:
  • Mechanistic approach, ignoring human elements and seeing the organization as a static collection of parts.
  • Super-specialization leads to worker dissatisfaction and dehumanization.
  • Microscopic view of humans, ignoring social aspects and focusing only on muscular fatigue.
  • Lack of physical verification, relying on empirical observations without scientific confirmation.
  • Incomplete organization, focusing on formal aspects and ignoring informal structures and human factors.
  • Limited application, mainly focusing on rationalizing work.
  • Prescriptive and standardizing administrative processes and lacking to explain how it functions
  • Closed System: viewing the company as isolated and independent.

Classical Theory

• Originated in France in 1916, viewing the organization as a structure and seeking efficiency like scientific administration.
• Key principles include the division of labor, authority and responsibility, unity of command, direction, centralization, and scalar chain.

Work of Fayol

• Henri Fayol (1841-1925) contributed to administrative levels and systematized managerial behavior to create 14 principles and divide operation into six core functions in the company
  • Technical functions
  • Commercial functions
  • Financial functions
  • Security functions
  • Accounting functions
  • Administrative functions

Fayol Argument

• Preceding functions do not create a general plan of action, to formulate the company's social body, coordinate, harmonize or effort.
• All such attributions constitute administrative functions.

Fayol on Administration

• Fayol defines administration as planning, organizing, directing, coordinating, and controlling, which includes items of visualizing the future, building the company, and guiding staff.

Fayol's Elements:

• The elements are key processes applicable at any level or area and the distinct administrative, technical, commercial, financial, accounting, and security functions should not be confused to conduction in a company by means of his 6 essential functions

Fayol on Science

• Science, as a whole, is based on laws or principles and so Fayol uses the denomination of principle to keep it from rigidity, since there's nothing rigid or absolute in the administrative material, which are adaptable to any location.

Administrative Principles

• Division of Labor: Speeds up the ability for people to perform tasks and can be seen on the assembly line.
• Authority: Managers must be in control and also give orders, but should also be able to have personal leadership.
• Discipline: Members must respect rules and agreements and display leadership to keep things in line.

Additional Points

• A singular objective is key and one to adhere to
• Subordinate the individual to general interest for the whole
• Remunerate the correct workers the correct portion
• Maintain authority finality and centralize that.
• Create a hierarchy for all to report to
• Maintain both equitability and stability of staff
• Give all a sense of initiative, and spirit de corps for the whole team.

Theory of Organization

• The administration as a Science claims that one should analyze and treat the company with scientific methods that replace empiricism and improvisation.

Elements of Administration For Urwick

• Investigation, foresight, planning, organization, coordination, control, and command make up a strong organization as a base, since one cannot develop around a singular person

Administration of Gulick

• Planning, organizing, staffing, directing, coordinating, Reporting, Budgeting.

Urwick and Administration

• Specialazation- one must have a specialization
• Author- Must have well defined recognized authority