The classical theory marks the beginning of modern management analysis. It is based on the belief that people are rational economic creature. They want economic growth. It comprises of three theories of management. Administrative management is one of them. Administrative Management Theory was developed by French industrialist and mining engineer by profession, Henry Fayol. He is known as the father of management or the founder of the classical management. It is not because he was first to investigate managerial behaviour, but because he was the first to systematize it. He was contemporary to Taylor. Taylor was basically concerned with organizational fucntions, whereas Fayol was interested in the total organization. It may be noted that Taylor is known as the father of scientific management, i.e. supervisory or lower management, while Fayol is recognized as the father of management, i.e. the higher management or the general management. Initially, he made the divisions of business activities. According to Fayol, business activities in any organization consist of six interdependent operations: Technical- activities concerning production, commercial- activities buying, selling and exchange, financial- activities concerning optimum use of capital, security- activities concerning protection of property, accounting- activities concerning final accounts, costs and statistics and managerial- activities concerning planning, organizing, commanding, coordinating and controlling. Thus, according to Administrative Management Theory, management means to forecast and plan, to organize, to command, to co-ordinate and to control. The management was defined as the process of performing these functions. Thus, Fayol formulated a set of fourteen principles as guidelines for implementing the process of management. They were: divison of work, authority and responsibility, discipline, unity of command, unity of direction, subordination of individual interest to genereal interest, remuneration of personnel, centralization, scalar chain, order, equity, stability of tenure of personnel, initiative and espirit de corps.
Though Administrative management perspective laid the foundation for the later development in management theory, identified the important management processes, functions and skills that are still recognized today, there exist several limitations. They are:
1.Management oriented theory: This approach can be viewed as too general and not focused enough on individuals. This is due to its concentration on organizations and management as a whole rather than individuals and particular areas. It means this perspective of management has not paid proper attention to the human behavioural aspects in an organization like problems of workers. This may lead to demotivation. It has pro-management bias.
2. Vague: Some of the individual points involved in this theory can be vague and possibly unachievable. For example, stable group of employees. This is good advice in theory but how realistic and achievable is it in the real world. How does a company ensure that it has a stable group of staff and is it possible to keep staff without over spending on wages, bonuses and holidays? There is a big question.
3. Cost : Putting into practice all of the factors associated with this theory would be time consuming. In general, a company would have to be assessed first to understand what should be changed and how this would help. This process could be time consuming and cost the company more money than it is worth.
4. Too formal: It is too formal as Fayol divides "business activities" into six categories, and their management into five functions and the implementation of these functions with the help of fourteen principles. It might be difficult to perform those functions within fourteen principles. So it does not give importance to informal organizations or groups. It gives...