Classical school of thought

INTRODUCTION

There are three main areas to the classical school of thought; the Classical, Humanistic and Management Science perspectives. All three of these perspectives helped shape how industry developed through the ages, and elements of the classical school of thought are still used today in modern management. The Classical perspective emphasised a scientific and efficient approach to managing work. The Humanistic approach focused on human behaviour and attitudes as well as how to motivate workers to achieve the very best they could at work. Finally the Management Science perspective stressed the importance of applying quantitative techniques such as statistics and mathematics to management problems.

One early management innovator who is sometimes known as “the pioneer of management”1 was Robert Owen (1771 – 1856) who ran mills, most famously of all in New Lanark where he introduced several new management practices. Owen also contributed towards the humanistic perspective by trying to make life better for his workers through understanding his workers needs for example by providing a nursery so employees with young children could continue working, and by proposing political reforms on issues such as shorter working hours for children, higher wages and increased job security so that workers safety and physiological needs would be better met. Even though these reforms were not passed in full due to “his ideas failing to win him immediate followers” and possibly being too radical for the time due to the “all-or-nothing approach” 2 Owens work went on to influence key reformers such as Joseph Rowntree and heavily influenced management in today’s world.

CONTRIBUTIONS

Technological advancements such as the steam engine radically changed the organization of work. A large number of workers gathered together in a new type of workplace called a factory. This new way of organizing work was a serious challenge to any manager of the time. Planning, organizing, leading and controlling such a large and complex organization brought about many problems and challenges. Therefore, decisions based on rules of thumb and tradition became obsolete and new approaches and solutions had to be developed.

“Conditions in early factories were extremely harsh, with very hazardous working conditions for all employees. Long working hours (normally at least 13 hours per day, six days a week) were the norm, with children as young as five or six working under the same conditions as adults. Factory owners placed more importance on the care of their expensive machines than on the well-being (or otherwise) of their expendable employees.”3

Robert Owen radically altered the approach to how a factory is run, placing more emphasis on the actual workers within the environment than just the wellbeing of the equipment. As the classical school of thought regarded people as machines, Owen recognised that machines must be well cared for in order to function optimally and lastingly, and thus improved on the classical perspective by treating the workers in a more humane way that would give them the respect and motivation to perform their best, in a happier work environment. Robert Owen not only made Lanark Mills more profitable than any other mills at the time, but he proved that happy, educated and healthy employees work harder and achieve better results: Proving that his method was effective.

Owen was able to produce unheard of profit and good productivity due to his new methods of work, thus gaining New Lanark and himself international recognition. Owens’ social reform that helped his business progress included:

• Improving housing conditions
• Making a public refuse system
• Paving new streets

Robert Owen was a pioneer in trying to limit child labour, by introducing a more “humane and progressive employment …No children younger than ten years old were employed and these were allowed relatively decent breaks for meals and some modestly worthwhile educational opportunities”.4 In adult labour his efforts were continued extensively by enforcing simple rules to eradicate drunkenness, laziness, and crime. In order to reduce these efforts Owen created a Silent Monitor System where a square piece of wood indicated an employee’s performance via the colour at the front of the square; this could be linked to scientific management where employees are monitored to improve productivity, as well as the humanistic perspective as the system was “an attempt to motivate laggards to perform better and good workers to maintain high performance.”5 Owen thus created a workplace that was motivated and content. Owen managed to influence other early industrialists by buying out his opponents and changing the way their businesses were run, to mimic his new approach. This would in turn, cause others to see how he was increasing efficiency in the workplace with his methods, and cause them to follow suit.

Modern managers recognize the importance of employee welfare, as they have seen how much of an impact good care can increase business success, learning from past examples, such as the ones set by Robert Owen. For example: offering flexible work methods where employees may work from home due to a large commutes, or children, so long as their work is sent in on time. Nowadays employees are offered perks in their jobs to increase working satisfaction, and hopefully increase their dedication to the company. E.g. Dental and medical care, holidays, pension funds, company cars/phones. By Owen giving education and general aid to his workers, we in the modern society have made this standard and are always looking for ways to further improve working environments and processes, to make businesses even more efficient and also enjoyable.

LIMITATIONS

As we have seen Robert Owen was an innovator in the industrial revolution, creating policies to benefit the business environment and creating a work place that was motivational, progressive, and organized. However, Robert Owen was considered somewhat radical in the business workplace during the time of the industrial revolution, and thus his policies had many limitations. Even in today’s business environment some of his policies would be considered too heavily biased on equality, instead of focusing on profits, which remains the main aim of businesses in modern management.

Robert Owens’ philosophy within management was based upon socialism, creating an equal workplace for everyone, to increase the overall welfare of society. He tried to stress this with his business associates, however due to his views being considered “radical” at the time; Owen alienated himself from many of his business partners. In his Truth Principles he states “Any community may be arranged, on a due combination of the foregoing prin­ciples, in such a manner as not only to withdraw vice, poverty, and, in a great de­gree, misery from the world, but also to place every individual under such circum­stances in which he shall enjoy more permanent happiness than can be given to any individual under the principles which have heretofore regulated society.”6 Robert Owen believed that in today’s business worlds, every worker could enjoy “permanent happiness”, however the principles of management are based on a competitive market place, in which capitalist values are at the core of creating a profitable business and “permanent happiness” for workers is not the main objective of companies. Robert Owens’ theories would be considered as too radical and somewhat unrealistic to achieve in modern management, due to the fact that everyone must have some form of authority and responsibility, creating a workplace based on incentive and promotional prospects instead of ensuring worker happiness.

The diagram demonstrates another limitation that Robert Owens’ classical theories contain. Robert Owen could not have foreseen how business would have developed at such a rapid rate, and to the extent in which businesses have expanded, creating new branches of business in which modern management has to facilitate. Thus Robert Owen could not have known how difficult it would be to create a business structure that creates an equal and socially responsible work environment that tries to cater for an ever growing population and the effects of globalization.

EVALUATION

Robert Owen is truly one of the most influential management contributors in the classical perspective. He helped build a basis for modern management by introducing key social reforms, technological improvements, and increased worker productivity.

Owen formed a structure for humanistic managers to develop their skills and become socially accepted. By increasing the amount of healthy adult workers, and reducing the amount of child labour, this, over a long period of time on a large scale made the country’s economy stronger by taking pressure off of the basic health systems at the time and increased the number of children in education, in order to develop a higher skilled society. By believing that every worker could contribute in some aspect and that every individual was vital to the success of his business, Owen was an inspiration to Douglas McGregor, who was the main contributor to theory X and theory Y analysis.

However, we have seen some of the limitations to his approach to management and although this was heavily influenced by the classical school of thought, to achieve his status as a pioneering manager, he used humanistic approaches too. He has proved that no one can use just one school of thought only, but a mixture of this and humanistic to improve efficiency between workers and the operations of the business.

SOURCES AND REFERENCES

1. “Robert Owen.” Robert Owen. Web. 4 Nov. 2009. .
2. Daft, Richard L. New Era Of Management. South-Western, 2008. Print.

Sources/References

Sources used for the introduction:

• http://www.answers.com/topic/management-historical-perspectives

Additional background reading for the introduction:

• Robert Owen, Prophet of the Poor edited by Pollard and Salt.
• http://en.wikipedia.org/wiki/Timeline_of_management_techniques
• http://www.laynetworks.com/Theories-of-Motivation.html
• ((http://www.age-of-the-sage.org/historical/biography/robert_owen.html))contributions)
• http://www.reliance-securities.com/images/img_structure.jpg