The Evolution of Classical Management Theory

The Industrial Revolution was a time where innovation really began to change the way that
products were produced and sold. The invention of machines to produce goods in the 19th
century drastically improved productivity, which in turn lowered the cost to the consumer. The
lower price resulted in a greater demand for products and thus a greater need for more factories
and workers.
As factories increased in number, managers continued to search for ways to improve
productivity, lower cost, increase quality of their products, improve employee/manager
relationships and increase efficiency. The focus shifted from using machines to increase
productivity to how they could increase employee productivity and efficiency. When they did
this, they began to notice some new problems inside their factory systems. Employees were
dissatisfied with their current working conditions, and many lacked the necessary training for
how to do their work efficiently. Managers then began to formulate and test possible solutions,
one of which was to find the best possible way for workers to perform and manage their tasks.
The research resulted in the development of classical management theory.
The classical management theory is a school of management thought in which theorists delved
into how to find the best possible way for workers to perform their tasks. The classical
management theory is divided into two branches, the classical scientific and the classical
administrative. The classical scientific branch comes from the scientific mindset of attempting to
increase productivity. During the height of the classical scientific theory, theorists would use
almost mechanical methods towards labor and organization to achieve goals of productivity and
efficiency. Some of the basic techniques of the classical scientific theory include creating
standardized methods for a task and dividing work between employees equally.
On the other hand, the classical administrative theory focuses on how management can be
organized to achieve productivity. Henri Fayol, a leading figure in management theory, devised
several management theories geared towards efficiency, such as creating a unified direction
among managers, centralization, and discipline. Other management theories focused on building
team confidence, such as establishing teamwork, using initiative, and equity.
Strengths of Classical Management Theory
Current management organization and structure can find much of its roots from the classical
management theory. One of the main advantages of the classical management theory was to
devise a methodology for how management should operate. Management principles devised
during this period can be seen as a foundation for current management behavior today, such as
serving as a force of authority and responsibility.
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In addition, another benefit of the classical management theory is the focus on division of labor.
By dividing labor, tasks could be completed more quickly and efficiently, thus allowing
productivity to increase. Division of labor can be seen in many applications today, ranging from
fast food restaurants to large production facilities. In addition, the classical management theory
also gave rise to an autocratic leadership style, allowing employees to take direction and
command from their managers.
There are the two primary classical theories Administrative Management Theory and
Scientific Management Theory.
Scientific management theory
Scientific management theory was developed in the early 20th century by Frederick W. Taylor.
Scientific management theory is important because its approach to management is found in
almost every industrial business operation across the world. Its influence is also felt in general
business practices such planning, process design, quality control, cost accounting, and
ergonomics. Your knowledge of the theory will give you a better understanding of industrial
management. You'll also understand how a manager can use quantitative analysis, an
examination of numbers and other measurable data, in management to improve the efficiency
and effectiveness of business operations.
Scientific management theory seeks to improve an organization's efficiency by systematically
improving the efficiency of task completion by utilizing scientific, engineering, and
mathematical analysis. The goal is to reduce waste, increase the process and methods of
production, and create a just distribution of goods. This goal serves the common interests of
employers, employees, and society.
Scientific management theory can be summarized by Taylor's Four Principles: Managers should
gather information, analyze it, and reduce it to rules, laws, or mathematical formulas.
Managers should scientifically select and train workers.
Managers should ensure that the techniques developed by science are used by the workers.
Managers should apply the work equally between workers and themselves, where managers
apply scientific management theories to planning and the workers perform the tasks pursuant to
the plans.

Theorists and Theories of Scientific approach

Frederick Taylor and Scientific Management
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People have been managing work for hundreds of years, and we can trace formal management
ideas to the 1700s. But the most significant developments in management theory emerged in the
20th century. We owe much of our understanding of managerial practices to the many theorists of
this period, who tried to understand how best to conduct business.
Historical Perspective
One of the earliest of these theorists was Frederick Winslow Taylor. He started the Scientific
Management movement, and he and his associates were the first people to study the work
process scientifically. They studied how work was performed, and they looked at how this
affected worker productivity. Taylor's philosophy focused on the belief that making people work
as hard as they could was not as efficient as optimizing the way the work was done. In 1909,
Taylor published "The Principles of Scientific Management." In this, he proposed that by
optimizing and simplifying jobs, productivity would increase. He also advanced the idea that
workers and managers needed to cooperate with one another. This was very different from the
way work was typically done in businesses beforehand. As a young engineer working for
Midvale Steel Company in the late 1800s, Frederick Taylor began to recognize the shortcomings
of systematic management practices. He observed how the gross, almost deliberate,
inefficiencies of workers led to low levels of productivity. As Taylor investigated further, he
discovered that employees were underpaid, their potential was unused, and there was a great deal
of waste and inefficiency of workers and work processes. He attributed these issues to three
things:
First, employees believed that if they were more productive, fewer jobs would be needed, and
thus their job might be in jeopardy.
Second, employees did not have an incentive to go above and beyond; if they were paid the same
amount for low productivity as they would be for high productivity, there was no reason for them
to strive for higher levels.
Third, workers wasted much of their time using less-than-optimal methods for completing work
instead of the best possible way.
Taylor soon realized that these unsystematic decisions being made by management were without
empirical evidence or research that demonstrated a significant rationale for what the best means
of production were. Essentially, managers were blindly making decisions on how to lead their
workers, almost like the blind leading the blind. Taylor's solution was to create a second
approach to management that accounted for all those issues he was seeing at Midvale Steel
Company. What is now known as scientific management, this new approach advocated the use of
scientific methods to scrutinize individualized tasks of production work to find the most effective
method? The specifics of scientific management are detailed in another lesson of this course, but
to help you understand how Taylor arrived at this new approach, we will discuss the steps he
took to get there. Using his engineering background, Taylor studied tasks and incentives to
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develop fixed procedures to maximize productivity and efficiency. He used time and motion
studies to determine how long it should take a person to complete a task when the correct
movements were made. He also looked for ways to standardize tools so that each worker had the
right tool for the job. Finally, he believed that an employee's effort towards reaching higher
levels of productivity should be directly tied to their pay. For example, Taylor studied workers at
the Bethlehem Steel plant who were responsible for unloading iron from rail cars. He found that
when the correct tools, movements, and procedures were used by workers, they could average
47.5 tons per day instead of the typical 12.5 tons per day. This only required 140 workers to
complete the work each day as opposed to the usual 500. Once the work process was clearly
defined according to the best possible way, he added an incentive system that would compensate
those employees who were able to meet the new standard set by Taylor. The result of this change
was unsurpassed as the productivity at the Bethlehem Steel plant drastically increased overnight..
These "time and motion" studies also led Taylor to conclude that certain people could work more
efficiently than others. These were the people whom managers should seek to hire where
possible. Therefore, selecting the right people for the job was another important part of
workplace efficiency. Taking what he learned from these workplace experiments, Taylor
developed four principles of scientific management. These principles are also known simply as
"Taylorism".
Four Principles of Scientific Management
Taylor's four principles are as follows:
Replace working by "rule of thumb," or simple habit and common sense, and instead use the
scientific method to study work and determine the most efficient way to perform specific tasks.
Rather than simply assign workers to just any job, match workers to their jobs based on
capability and motivation, and train them to work at maximum efficiency.
Monitor worker performance, and provide instructions and supervision to ensure that they're
using the most efficient ways of working.
Allocate the work between managers and workers so that the managers spend their time planning
and training, allowing the workers to perform their tasks efficiently.

Critiques of Taylorism
Taylorism promotes the idea that there is "one right way" to do something. As such, it is at odds
with current approaches such as MBO (Management By Objectives), Continuous Improvement
initiatives, BPR (Business Process Reengineering), and other tools like them. These promote
individual responsibility, and seek to push decision making through all levels of the organization.

The idea here is that workers are given as much autonomy as practically possible, so that they
can use the most appropriate approaches for the situation at hand. (Reflect here on your own
experience are you happier and more motivated when you're following tightly controlled
procedures, or when you're working using your own judgment?) What's more, front line workers
need to show this sort of flexibility in a rapidly-changing environment. Rigid, rules-driven
organizations really struggle to adapt in these situations.
Teamwork is another area where pure Taylorism is in opposition to current practice. Essentially,
Taylorism breaks tasks down into tiny steps, and focuses on how each person can do his or her
specific series of steps best. Modern methodologies prefer to examine work systems more
holistically in order to evaluate efficiency and maximize productivity. The extreme specialization
that Taylorism promotes is contrary to modern ideals of how to provide a motivating and
satisfying workplace.
Where Taylorism separates manual from mental work, modern productivity enhancement
practices seek to incorporate worker's ideas, experience and knowledge into best practice.
Scientific management in its pure form focuses too much on the mechanics, and fails to value the
people side of work, whereby motivation and workplace satisfaction are key elements in an
efficient and productive organization.
Frank and Lillian Gilbreth a Scientific Management
It was the early 1900s, and Frank, a young contractor in Boston, set his eyes on Lillian, a recent
college graduate from California. Clearly, Katy Perry had it right about California girls being
undeniably beautiful because Frank's attempts at wooing Lillian must have worked. After just six
months after meeting for the first time, they were married. Being the smart woman she was,
Lillian quickly joined Frank in his construction business and began to take on a leadership role
within the company.
Three years later, in 1907, the couple was introduced to Frederick Taylor. Entranced with
Taylor's work with time studies, the Gilbreths rapidly became involved in scientific research.
Using what they learned while working with Taylor, the Gilbreths decided to shift their focus to
scientific management consulting and severed their working relationship with Taylor in 1914.
Lillian continued her education by earning a doctorate in psychology and later used what she
learned during this degree program to better understand the practice of management.
With this newfound knowledge relating to psychology, the Gilbreths were able to combine the
human element of management with the technical observations they had made during their
research. The two quickly tied the idea of worker satisfaction to productivity and saw that when
worker satisfaction increased, so did the level of productivity and efficiency in those same
workers. What resulted was the design of a system that would ease the amount of fatigue a
worker experienced by providing them with specific movements to use while completing their
jobs. They also noticed the need to consider the working conditions and overall environment in
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which the workers performed their jobs. This lead to innovations in office furniture, and many
credit them with leading the way to the study of ergonomics.
Motion Study
Although their contributions were many, what the Gilbreths are most known for is their work on
motion studies. If you're familiar with the phrase 'work smarter, not harder', then you will know
exactly what Frank and Lillian were after. The interest in standardization and method studies
developed while Frank was working as a bricklayer. In fact, it didn't take long as an apprentice
for Frank to notice that no one bricklayer performed his or her job quite the same. He found
some workers to be highly productive, while others were extremely slow and ineffective. While
we can certainly attribute some of the slowness and inefficiency to pure laziness, Frank focused
on identifying the basic movements needed to lay brick effectively and isolated them to eliminate
unnecessary movements. Frank presented his findings to his fellow bricklayers and found that
those who used the movements he recommended were able to increase their output from 1,000 to
2,700 bricks per day.
Henry Gantt and Scientific Management
Henry Gantt was an advisor and consultant on management practices. Henry GanttHenry Gantt,
an associate of Fredrick Taylor, was a mechanical engineer during the early 1900s who spent his
time as an advisor and consultant on management practices. His main focus was to apply
scientific analysis to all facets of the work being done as a means of increasing productivity. His
two major contributions were the Gantt chart and the task and bonus system, both of which will
be discussed next. Much of what Gantt developed during this time was considered
groundbreaking, and it revolutionized scientific management. Many of his ideas are still widely
used in project management today.
The Gantt chart
As Gantt spent time scrutinizing the work process with the comprehensive goal of planning and
implementing a work breakdown structure, he wanted to have a visual representation of what
was actually occurring over the course of a project. Specifically, Gantt focused on creating a
graphical representation of work processes that showed scheduling and monitoring projections.
What Gantt came up with was a bar chart that demonstrated a project's schedule, showing
terminal and summary elements from start to finish.Terminal elements are the smaller more
intricate tasks that need to be completed as part of a larger task. A summary element is made up
of terminal elements to form the larger task. For example, a summary element for a car
manufacturer would be to paint the vehicle. The terminal elements of painting the vehicle would
be to strip any original paint, primer, apply your first, second and top coats, and finally, wash,
wax and buff the new paint job. Once the terminal and summary elements are defined, a manager
can then add projected and actual projection for completion of each of those elements. The time
schedules are plotted on the graph using bars. These can be used to come up with deadlines.
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Once plotted together, it becomes easy for others to understand the individual work tasks and
their due dates within the greater project deadline. This also demonstrates areas that can be done
concurrently with other tasks and what tasks are dependent on the completion of others. Gantt
created a bar chart that showed terminal and summary elements from start to finish.
The Gantt chart was first used on large construction projects, such as the Hoover Dam in the
1930s and the Eisenhower interstate highway network in the 1950s. Many contemporary
managers rely on software programs to create Gantt charts. Such programs have advanced
features that allow managers to manipulate data in several ways, aiding in their understanding of
the overall project.
Harrington Emerson and scientific management
The principles of efficiency were further developed by Harrington Emerson. He was also a
strong advocate of making a strict distinction between line and staff roles in organizations.
Moreover, Emerson urged on the use of statements of goals and objectives for the total
organization.
Standards and standardization as a basis for efficiency was strongly advocated by him. Nearly
two hundred companies adopted various features of the Emerson Efficiency system, which
included production routing procedures, standardized working conditions and tasks, time and
motion studies, and a bonus plan which raised workers' wages in accordance with greater
efficiency and productivity [Guide].
Harrington Emerson (1853-1931) was one of America's pioneers in industrial engineering and
management and organizational theory. His major contributions were to install his management
methods at many industrial firms and to promote the ideas of scientific management and
efficiency to a mass audience [Guide].
The 1910 Eastern Freight Case brought much wider public attention to Emerson's ideas.
Emerson served as Louis D. Brandeis's star witness in the appeal of major eastern trunk railroads
to the Interstate Commerce Commission for a rate increase. Emerson testified that the railroads
wasted one million dollars daily by not applying efficiency methods. His brief against the
railroads won wide acclaim and marked the growth in public awareness of scientific
management. Emerson became known as the "High Priest of Efficiency." He spoke more
frequently about his efficiency ideas to businessmen, civil organizations, and management and
engineering students. In 1912, Emerson helped to found the New York Efficiency Society which
promoted and disseminated the ideals of reform through scientific management. Emerson joined
other progressive engineers in founding the Society of Industrial Engineers in 1917.

Administrative management

Administrative management is concerned with the design and management of an organization. In

this lesson, you'll learn what administrative management theory is as well as its key components.
Administrative management theory attempts to find a rational way to design an organization as a
whole. The theory generally calls for a formalized administrative structure, a clear division of
labor, and delegation of power and authority to administrators relevant to their areas of
responsibilities.
Administrative management theory involves many important concepts, but these concepts can
usually be placed into the following broad categories:
Formalized administrative structure - According to this theory, you should design an organization
using a much formalized structure with clear lines of authority from the top down. This is a
hierarchical structure. For example, consider a large corporation. At the top is the board of
directors who give directions to the CEO, who in turn gives directions the vice presidents of each
corporate division. The vice presidents will then give directions to their middle managers, who in
turn give directions to supervisors down to individual employees.
Division of labor - A second key structural feature of an organization designed by administrative
management theory is a clear division of labor between the organization's departments. Each
department is responsible for a particular aspect of the organization's activities towards
achievement of organizational goals. For example, our large corporation may have a production
division, marketing division, distribution division, and administrative division. Each works on a
particular aspect of the company's business: the production division produces the products, the
marketing division markets the products, the distribution division sends the products to
customers or retailers, and the administrative division provides administrative support to the
other divisions.

Administrative Management Theorys and Theorists

Henry Fayol and Administrative Management
administrative theory, classical administrative theory An early form of organization theory,
pioneered mainly by Henri Fayol (18411925), which was concerned principally with achieving
the most rational organization for co-ordinating the various tasks specified within a complex
division of labor (see his Administration industrielle et gnrale, 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.
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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 premisses 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. The Human Relations Movement 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.
Management Principles developed by Henri Fayol:

1. DIVISION OF WORK: Work should be divided among individuals and groups to ensure
that effort and attention are focused on special portions of the task. Fayol presented work
specialization as the best way to use the human resources of the organization.
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2. AUTHORITY: The concepts of Authority and responsibility are closely related. Authority
was defined by Fayol as the right to give orders and the power to exact obedience.
Responsibility involves being accountable, and is therefore naturally associated with
authority. Whoever assumes authority also assumes responsibility.
3. DISCIPLINE: A successful organization requires the common effort of workers. Penalties
should be applied judiciously to encourage this common effort.
4. UNITY OF COMMAND: Workers should receive orders from only one manager.
5. UNITY OF DIRECTION: The entire organization should be moving towards a common
objective in a common direction.
6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL
INTERESTS: The interests of one person should not take priority over the interests of the
organization as a whole.
7. REMUNERATION: Many variables, such as cost of living, supply of qualified personnel,
general business conditions, and success of the business, should be considered in
determining a workers rate of pay.
8. CENTRALIZATION: Fayol defined centralization as lowering the importance of the
subordinate role. Decentralization is increasing the importance. The degree to which
centralization or decentralization should be adopted depends on the specific organization in
which the manager is working.
9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each
manager, from the first line supervisor to the president, possesses certain amounts of
authority. The President possesses the most authority; the first line supervisor the least.
Lower level managers should always keep upper level managers informed of their work
activities. The existence of a scalar chain and adherence to it are necessary if the
organization is to be successful.
10. ORDER: For the sake of efficiency and coordination, all materials and people related to a
specific kind of work should be treated as equally as possible.
11. EQUITY: All employees should be treated as equally as possible.
12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should
always be a high priority of management. Recruitment and Selection Costs, as well as
increased product-reject rates are usually associated with hiring new workers.
13. INITIATIVE: Management should take steps to encourage worker initiative, which is
defined as new or additional work activity undertaken through self-direction.
14. ESPIRIT DE CORPS: Management should encourage harmony and general good feelings
among employees.

Comparisons with Taylorism

Fayol is often compared to Frederick Winslow Taylor, who developed scientific management.
However, Fayol differed from Taylor in his focus and developed his ideas independently. Taylor

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was concerned with task time and improving worker efficiency, while Fayol was concerned with
management and the human and behavioral factors in management.
Another major difference between Taylor and Fayol's theories is that Taylor viewed management
improvements as happening from the bottom up, or starting with the most elemental units of
activity and making individual workers more efficient. In contrast, Fayol emphasized a more topdown perspective that was focused on educating management on improving processes first and
then moving to workers. Fayol believed that by focusing on managerial practices organizations
could minimize misunderstandings and increase efficiency.
His writings guided managers on how to accomplish their managerial duties and on the practices
in which they should engage. In his book "General and Industrial Management" Fayol outlined
his theory of general management, which he believed could be applied to the administration of
myriad industries. As a result of his concern for workers, Fayol was considered one of the early
fathers of the human relations movement.
Lyndall Urwick and Administrative Management
Lyndall Urwick worked in the armed forces, industry and management consultancy and its clear
that his views on management were influenced by his military service.
URWICKS TEN PRINCIPLES ARE:
The principle of the objective the overall purpose of an organization it its raison d'tre.
The principle of specialization one group, one function.
The principle of coordination the purpose of organizing is to facilitate coordination or unity of
effort.
The principle of authority in every organized group, supreme authority must be located
somewhere, and there should be a clear line of authority to every member of the group.
The principle of responsibility a superior may be held accountable for the actions of
subordinates.
The principle of definition jobs, duties and relationships should be clearly defined.
The principle of correspondence in every position, responsibility and authority should
correspond with one another.
The principle of span of control no person should supervise more than 56 line reports whose
work is interlocked.
The principle of balance it is essential that the various units of an organization are kept in
balance.
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The principle of continuity reorganization is a continuous process and provision should be

made for it.
Max Weber and Administrative Management
At a time when organizations were run like families, Max Weber looked for ways to bring a more
formalized structure to organizations. Weber created the idea of bureaucratic management where
organizations are more authoritative, rigid and structured. This lesson will describe the
development of bureaucracy and common characteristics of bureaucratic organizations.
The Development of Bureaucracy
In the late 1800s, Max Weber criticized organizations for running their businesses like a family,
or what some of us might refer to as 'mom and pop'. Weber believed this informal organization of
supervisors and employees inhibited the potential success of a company because power was
misplaced. He felt that employees were loyal to their bosses and not to the organization.
Max Weber believed in a more formalized, rigid structure of organization. Weber believed in a
more formalized, rigid structure of organization known as a bureaucracy. This non-personal view
of organizations followed a formal structure where rules, formal legitimate authority and
competence were characteristics of appropriate management practices. He believed that a
supervisor's power should be based on an individual's position within the organization, his or her
level of professional competence and the supervisor's adherence to explicit rules and regulations.
To better understand the idea of bureaucracy, let's look at some of its characteristics
Characteristics of Bureaucratic Organizations
A well-defined formal hierarchy and chain of command distinguishes the level of authority
within an organization. Individuals who hold higher positions will supervise and direct lower
positions within the hierarchy. For example, Megan the Manager supervises a team of four sales
representatives. Megan's position within the organization as a supervisor gives her authority over
those four sales representatives to direct and control their actions to ensure organizational goals
are met. Management by rules and regulations provides a set of standard operating procedures
that facilitate consistency in both organizational and management practices. For example, when
an employee is sick and cannot make it into work that day, he or she must call out to their direct
supervisor. If one of Megan's sales reps is sick, they are expected to call her directly to inform
her of their absence. Any employee who fails to do this will be subject to termination. All of
Megan's employees are expected to follow this rule, and Megan is expected to enforce this rule
equally among her employees. Division of labor and work specialization are used to align
employees with their organizational tasks. This way, an employee will work on things with
which he or she has experience and knows how to do well. For example, let's say two of Megan's
sales reps are experienced in selling products to vendors in the western region of the state due to

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their extensive experience working in that area. Megan would then put those two employees in
charge of that specific region and would place the other two sales reps in the eastern region.
Chester barnard and Administrative Management
Chester Barnard (1886-1961) drew on his own experiences as a manager and his extensive
reading of sociological theory in constructing a theory of the organization. Born on a farm in
Massachusetts, Barnard received a scholarship to attend Harvard which he supplemented by
tuning pianos and running a small dance band. He completed the requirements for an economics
degree in three years but was denied a degree for failing to attend a science laboratory section.
Even without a degree, however, he was hired by American Telephone and Telegraph in 1909
and became the president of New Jersey Bell in 1927. A tireless "organization man," Barnard
was very active in volunteer work. Barnard's most famous work, The Functions of the Executive,
viewed the organization as a "cooperative system" of individuals embodying three essential
elements: (1) willingness to cooperate, (2) a common purpose, and (3) communication.' The
absence of any one of these three elements would lead to the disintegration of the organization,
according to Barnard.
Like Weber, Barnard viewed the distribution of authority as an important process within the
organization. However, he felt that the source of authority did not reside in the person who gave
the orders; rather, authority resided in the subordinates who could choose to either accept or
reject directives from their superiors. Subordinates would assent to authority when four
conditions were satisfied: (1) they could and did understand the communicated directive; (2) they
believed that the directive was consistent with the purpose of the organization; (3) they believed
that the directive was compatible with their own personal interests; and (4) they were mentally
and physically able to comply with the directive.' This view of authority has become known as
acceptance theory.

Conclusion

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People who create management theories rely upon observation and mathematics in order to
construct a model for business activities. Management practice relies upon case studies and the
individual experiences of managers when dealing with workplace situations. Since both schools
of management have flaws and benefits, a business owner should study both styles of
management in order to improve profitability. Employees most commonly leave their jobs due to
poor management practices, a situation that increases costs and lowers the talent present in a
business, according to the University of Vermont. Business owners should understand good
management practices through personal research or formal education in order to create a
business model that can improve employee productivity, eliminate redundancy in processes and
increase retention rates. Management theories face limitations, because models of human
behavior in a business do not consider all of the variables that can impact profitability. Different
businesses face different issues with employees, financial resources and the use of technology.
For example, a workplace of single mothers requires a company to focus more on family leave, a
consideration that a theorist might not work into a general business model. Management practice
can also result in flawed management behavior, because managers cannot see the business as a
whole and instead rely solely upon their own experience. Management theories work best from a
macro perspective, such as when a business determines the appropriate model for management as
a whole or starts a large project that it has never attempted before. The formal structure of this
type of management works best for large corporations that have a top-down management
structure which requires uniformity in order to accomplish goals, even if this model slightly
decreases productivity. Since management practices rely upon the opinions of managers and
employees or a case study in a particular area of business, they work best for informal
organizations. Little doubt exists as to whether a management model will work, because the track
record of the model speaks for itself. Management practices focus more on dynamics between
groups, which allow managers more flexibility in making decisions and helps employees
function together as a unit when they work together on a project. Business owners should mix
management practices and theories together based upon their business model. A small business
owner will usually study and implement management practices, because he requires flexibility to
sustain his business mode. As his business grows, he may add some elements of management
theory in order to formalize the decision making and leadership qualities of management.

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