Classical Theories of Hierarchical Management

8 August 2016

Classical Theories of Hierarchical Management The purpose of this essay will be to argue the assumptions of classical theories regarding hierarchical management and how it is essential in modern day times. The ranks within a hypothetical pyramid determine the position of an employee within any organisations. Classical management still takes place in today’s management concepts. Max Weber studied bureaucratic organisations, Henri Fayol created the administrative principles and Fredrick Winslow Taylor researched scientific management. These influential people took apart in the formation of hierarchy.

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The concept of classical management, Weber’s theories and hierarchy will be argued further. In a hierarchical organisation, ranks are what determine a position for an employee. It is a straightforward process as it follows the layout of a pyramid (Meehan, 2012). The organisational structure indicates the method that an organisation employs to delineate lines of communication, authorities, policies and responsibilities. It determines the extent and nature of how leadership is disseminated throughout the organisation as well as the method by which information flows.

A flat or hierarchical structure commonly adapts to an organisation (Goessl, 2010). Max Weber, a German sociologist that purposed different characteristics found in effective bureaucracies that would effectively conduct decision-making, control resources, accomplish organisational goals and protect workers (Business Mate, 2009). Ian Clark defines hierarchy as: ‘A social arrangement characterized by stratification in which, like angles, there are orders of power and glory and society is classified in successively subordinated grades’ (1989, pg. 2).

Clark’s quote describes hierarchy as having “orders of power” above others, which refers to the superior of the organisation. Below the superior are the next employees in line which are referred to in the quote as ‘medium powers and smaller powers. ’ Everyone within this hierarchy works as a group to reach a goal. Weber produced the idea of hierarchism when he was making observations regarding his organisation. He became concerned with the fact that people were in positions of authority not because of their job experience and capabilities, but because of their social status in the German society.

For this very reason he believed that organisations failed to reach their performance potential. (Shermerhorn et al, 2011, Pg. 91) According to Astley (1988), Weber came up with the ideal type of hierarchy resonates with common experience in established domestic policies (pg. 202-203), which reflected in expression of support by citizens for their political leaders even though they may not respect them as individuals. (Lake, 2006, pg. 36) Weber founded on the principles of logic, order and legitimate authority.

The characteristics of Weber’s bureaucratic organisation include; clear division of labour, formal rules of authority and clear hierarchy of authority (Shermerhorn et al, 2011, Pg. 91-92). Clear division of labour is a form of specialization in which the production of a product or service is devised into several separate tasks, each performed by one person (Cengage, 2001). According to Weber’s design, the knowledge within the division of labour defines each employee’s job, giving them a “sphere of competence”, and the authority to persevere with individual tasks without interrupting others.

Large scales are broken down into small manageable units and specialties that are then appointed to each individual (Shafritz & Ott, 2001, pg. 134). This is an example of how different departments within a hierarchical system work in organisations. Formal rules of authority apply in a particular system such as an organisation where authority must be used to stabilize employees and guide them into the direction of the leaders. Authority helps prevent anarchy, and helps to define a clear hierarchy of decision-making.

A clearly defined hierarchy will potentially lead to an effective organisation, consisting of strong and legitimate authority relations between leaders and followers. Weber distinguished three different types of authority, traditional, rational-legal and charismatic (Business Mate, 2004). Rational and traditional authorities are stable enough to provide the fundamentals for permanent administrative structures such as a business organisation. Where as charismatic authority will need to evolve into a more stable form of authority.

Clear authority of hierarchy is designed to benefit the company and employees. This is the same as the overall concept of hierarchy as discussed above. Organisations are methodically ordered into a clear chain of command. The hierarchical structure effectively delineates the lines of authority and the subordination of the lower levels to the upper levels (Cutajar, 2010). The further the chain of command, the more power, authority and responsibility is needed to run the organisation. This usually depends on the size of the business.

This merit principle is the most commonly applied in bureaucratic or semi-bureaucratic organisations as they are constructed most fundamentally on hierarchy and divisions of labour (Martin, 1985). According to Weber (1998), the purest form in which legal domination can be governed is as a bureaucracy. Officials in a bureaucracy obey orders predominantly because of demands for their sense of status. Employees are specially trained, have an assigned domain of competence and develop a strong sense of duty in relation to their work.

They have a care based on superiority and achievement and can only be completed under certain circumstances (Pg. 63). The creation of a bureaucratic organizational structure is a means of exerting power and is best used in large-scale organisations having both advantages and disadvantages. Advantages include facilitating the management of people and situations and predicting the outcome of actions by others, giving them structure within their organisation (John, 2011). Despite having many disadvantages, it is believed that the degree of control given to the superior over employees is possibly the most damaging outcome.

The supervisor will receive almost total control over their subordinates as they are given demands and instructions to follow (Rabie. 2004). Another disadvantage that can effect the organisation significantly is communication. This can be lost through the chain of hierarchy called horizontal communication. The top-down structure keeps different departments from communicating which can produce poor productivity and inefficiency (Handel, 2003, pg. 326) In 1916, Henri Fayol published Administration Industrielle et Generale which contains the original foundation of his theories for management (Sapru, 2006, pg. 101; Pryor & Tenaja, 2010, pg. 493). The book outlines his views on the proper management of organisations and the people within them. (Schermerhorn et al, 2011, pg. 90). Fayol synthesized various tents or principles of organisations and management. He argued that the principles needed to exist in order for organisations to work efficiently. Fayol’s five functions are still relevant to today regarding management roles and actions; to forecast and plan, to organize, to command, to co-ordinate and to control (Docstoc, 2011).

Fayol synthesized 14 principles for organisational design and effectiveness, which reflect closely to Weber’s idea of hierarchism. The science of administration is based on laws and principles. Fayol’s 14 Principles of Management refer to hierarchism within an organisation; two of these principles include Unity of Command and Unity of Decision. They both support the idea of having only one superior above many employees. Unit of Command promotes the idea of subordinates receiving orders of command only from one person (the superior). (Sapru, 2006, pg. 108; Lucey, 1991). This classical idea is still supported in today’s management.

Unity of Decision relates to Unity of Command as the superior of the hierarchy (chief or executives) makes the decisions and agrees or disagrees over the purpose and objectives of the plan (Cliffs Notes, 2012). This person has total power and control over all subordinates in the organisation. Additional relevant principles include the Scalar Chain/Life of Authority and Order, which has strong reference to Weber’s concept of chain of authority. The scalar chain of command of reporting relationships from top executives to ordinary shop operators or drivers need to be sensible, clear and understood (Docstoc, 2011).

Lower level managers should always keep the upper level managers informed of progress regarding their work and activities. For this chain to be structural, order needs to be implied. Basically an organisation needs to provide an orderly environment for each individual member who is required to understand how his or her roles fit confidently into the organisation (Management Study Guide, 2012; Onkar, 2008). Consequently policies, actions, instructions and rules need to be put into place for employees to follow in a structural order otherwise management wouldn’t work sustainably.

The concept of the administrative principles works well within organisations, as it is an extremely comprehensive way to deal with management techniques and has been proven to work. Its advantages cover majority of tasks that a manager may need to know in order to achieve success (Mitchell, 2011). Disadvantages to the theory include that humans are naturally going to make mistakes. The theory works best when having the foundation of harmony among employees. However, when mistakes are made it can weaken the strength of the team (Kramer, 2010).

Fredrick Winslow Taylor, an American engineer who “worked on promoting efficiency in manufacturing enterprises around the turn of the century”(Brown, 1980, pg. 288). Scientific management is referred to as Taylorism; this is a philosophical system of testing and analyzing techniques used to increase the productivity of an organisation (Cannon, 2011, p9, 3-4). He drew on the idea that they should have a detailed analysis of each job, using the techniques of method of study in order to find the method of working that would bring the largest average rate of production – this was called ‘one best way’ (Kermally, 2004, pg.10- 14).

Taylor touched on the concept that the reference to hierarchism depended on the amount of knowledge and responsibility a person holds. In a study of scientific management in practice, C. Bertand Thompson (1915) discussed the responsibilities of planning in relation to managers. Thompson stated that the responsibility of management is ‘functional foremanship’ by which details of administration and determination of the sequence of operations, tools and methods used, importance of order and instructions of employees are all important as it determines each individuals knowledge and expertise (pg.271). This refers to the concept that the duties prearranged in management contain a high level of education and leadership skills to effectively coordinate the various tasks associated with management. Employees need to have complete knowledge of the functions performed and implemented training before being placed in their hierarchical level of expertise. Taylor found that workers were deliberately working at less than full capacity. They worked as slow as they could without getting into trouble (Business Knowledge Source, 2010).

The advantage of scientific management meant that workers would increase their performance, changing everything from how they did their jobs to the tools they used. Responsibilities were divided up between hierarchies of management so that managers would be responsible for planning work methods using scientific principles and workers would be responsible for executing the work accordingly. Another advantage is that superiors trained workers and allocated them in the right department of the organisation.

This way, employees would know “the one best way” rather then relying on their own various rules of thumb (Bagad, 2009, pg. 22-23). This concept related with Weber’s theory of ‘clear division of labour’ as discussed above. Taylorism has a number of disadvantages, which affected the workers; just as easily could it be abused, exploit human beings and conflict with their labour and unions (Scribd, 2010). Another recognised issue ‘was’ the individual differences; this would cover the fact that it may work only for certain employees and not for others.

This could increase production for one person but decrease for another. It does not address the fact that the economic interests of each worker and manager are the same; therefore employees would most likely resent and attempt to sabotage Taylor’s methods of measuring process and retraining (Business Knowledge Source, 2010). From this literature, it is evident that hierarchy plays a major role within management structure today.

With reference to Max Weber, Fredrick. W. Taylor and Henri Fayol, all contributed to the concept of hierarchy. Max Weber’s idea of bureaucracy is very formal and rigid; this will perhaps only apply in organisations with high standards, as employees are to obey orders predominantly due to the demands made by their superiors. Bureaucracy works well under the influence of leadership and motivation, with well-defined procedures within a productive business framework.

Issues can arise from the superior as they are given the most control over their employees, which is very demanding over the departments below. Fayol’s theory of administrative principles works well in most organisations, as it is an extremely comprehensive way to deal with management techniques. It covers majority of tasks that a manager may need in order to achieve success. Although, a factor that Fayol didn’t take into consideration was the fact that humans will always make mistakes as this can weaken the strength of the team.

Lastly, Taylor’s theory produced the idea that workers could increase their performance by dividing their responsibilities between hierarchies of management so that managers would be responsible for planning work methods and employees would be responsible for executing the work as instructed. This method could easily fail as each employee has individual differences. Increased performance in one employee may not work for another. It doesn’t address the economic interests of each worker and manager, as they are not the same. Overall, hierarchy works productively for a number of organisations.

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