What is the classical theory of Administration? The school or classical theory of administration is a different approach to business administration, promoted mainly by the French engineer Henry Fayol from his work entitled General and Industrial Administration and published in 1916. His main contribution was to give a answer to several of the problems not studied by the scientific administration of Taylor that we saw if you remember in the video that I leave you here on the labels. Unlike Taylor, Fayol studied the company at the management level making great contributions at the administrative level. In other words, Fayol emphasized the basic functions that an organization must have to achieve greater efficiency at the administrative level. Functions of classical theory In this way, Henry Fayol divided the functions that a company must carry out into 6 types, which he called functions basic organization: technical functions. They are all those actions that are linked to the production of goods and services of the company Commercial functions. They focus on all those activities related to the purchase, sale and exchange of the company's products. For example, marketing or customer service activities would fall under the business functions Security functions. They refer to the well-being of the workers and the organization. It seeks to guarantee the safety of both the people who work in the organization and the assets that belong to the company. Accounting functions. They focus on everything related to costs, inventories, and business statistics. This series of functions will allow the company to keep a good control of the resources and be constantly informed of its financial statements and the operations that are being carried out. Financial functions. They involve the search and management of capital, where the director plays a fundamental role, since he controls the entire economy of the company. Reckless acts of capital use should be avoided at all costs . Administrative functions. They are responsible for the regulation, integration and control of the five previous functions. These must be coordinated effectively and efficiently to achieve good control of the organization as a whole since, in the event that any function fails, this damages the other functions, causing the organization to not be able to function efficiently. Due to the latter, the administrative function is considered the most important of the functions. Now, so that this does not happen, Fayol established in this administrative function, 5 functions that managers must follow and which are: Planning. The director must visualize the future of the company and from there draw the strategy that best suits the company Organize: The director must build both the material and social organism of the company. That is, you must hire the workers and buy the necessary machinery to carry out the strategy outlined Lead: If the company wants to be successful, it is necessary for the boss to know how to guide and guide the staff to achieve the objective Coordinate: The director must coordinate its employees and achieve that all the individual efforts of each worker are united in a collective effort that allows the company to achieve the objective they had planned Control: This last function is based on verifying that everything happens according to the established rules and the orders given. Control is essential for the director since it allows him to act quickly in case of detecting a problem In summary, every director must know how to plan, organize, direct, coordinate and control effectively if he wants to achieve a correct administration of his company. principles of classical management theory? Henry Fayol proposes 14 principles that organizations must follow, for the correct operation and efficiency in the results. These are: Division of work The division of complex tasks into simple activities must be carried out, since specialization of work is necessary if greater efficiency is to be achieved.To do this, the role that each member will fulfill must be clarified, taking into account their skills and specializations, to obtain higher returns and results. Authority and responsibility Respect for workers will only be had if you have the ability to lead a group of individuals. You need to know how to give orders so that they are obeyed and carried out. In addition, the boss must take responsibility for the decisions made. Discipline All members of the company must respect the rules established in the same, as well as there must be a good coexistence between them. When you have a good leader, you can reach fair agreements on differences and also set the necessary penalties correctly. Unity of direction This principle is based on the fact that everything that is carried out must follow a series of processes and a single specific plan, so that it is carried out properly and there are no possible confusion. In addition, this plan must be directed by a single superior. Command unit The command unit refers to the fact that orders must be given by a single superior. In this way, the duality of command is avoided since Fayol believes that it is not effective and only causes problems. On the one hand the employee does not know who he should pay more attention to and on the other hand a kind of struggle can be established between the two superiors to demonstrate his authority Subordination of the individual interest to the general interest At all times, the benefits must be sought over the organization and not on the individual That is, for a company the well-being of the organization must prevail, leaving in the background the individualities that the members may present. Remuneration Each of the workers must previously know the amount of money that they will obtain for their working hours, which will be established in accordance with the activities they will carry out. The remuneration of the organization must be understood as compensation for the work performed and must be equitable for all individuals, according to the work they perform regardless of their nationality, sex, etc. Centralization Centralization consists of the principles of authority and Responsibility should be concentrated in the top hierarchy of the company. In some cases, senior officials will be able to delegate some authority and responsibility to their employees, however Henry Fayol assures that responsibility can never be completely delegated. Hierarchy It is necessary that all the people in an organization, from the highest to the smallest position, know their immediate superior and abide by the authority of each rank Order Each employee must be arranged in an orderly manner in a position that suits their skills. In addition, all the work items must be in the right place and at the time they will be used, so that, in this way, the work can be carried out properly. Equity Every person in charge of leading a work team must have enough intelligence to know how to make fair decisions at the right time. In addition, the treatment with its workers must be pleasant and friendly in order to promote a good working relationship. Staff stability You should not make redundancies and hiring continuously in the organization's staff, since this can generate deficiencies in the operation of the same which translates into a loss of productivity. The permanence of workers in their respective positions should be preserved, as far as possible, so that they feel comfortable with the work they do. Initiative The organization must give its workers a certain freedom by giving them the ability to determine how certain procedures will be carried out. In this way, employees are encouraged to use their imagination and carry out continuous innovations in the activities they carry out, which causes an improvement in the organization. Group spirit What this principle means to us is that whenever possible the work must be carried out in team since individualities, as a general rule, cause division in the company. That is, cooperative work should be encouraged at all costs because it allows the work environment to be pleasant and efficient. Characteristics of classical theory Having seen its origins, functions and principles, let us make a brief summary of the main characteristics of classical theory before talking about its main exponents and about the criticisms that this classical theory of management received: Developed From the industrial revolution, its main promoter was Henry Fayol, who in 1916, presented for the first time in France his classic theory of administration through his work entitled General and Industrial Administration This theory is made up of 6 functions and 14 basic principles. It is fundamentally based on developing the structure and functions that an organization must fulfill in order to achieve the greatest possible administrative efficiency. He introduced new concepts such as the concept of formal organization and informal organization explained in the video that I leave you here on the labels. In addition to these two very important concepts, he also introduced others such as staff and line within the organization, which we also explained in the video that I made about organizational structures and that I leave it here on the labels. Main exponents of the classical theory of administration Obviously, Henry Fayol was the main exponent and forerunner of the classical theory of administration. However, we also want to mention two other authors who, with a secondary role, contributed and made great contributions to the classical theory of administration. The first is Lyndall Urwick who was born in 1891 in the United Kingdom and died in 1983. The greatest contribution From the British to the classical theory of administration was to have consolidated the concepts and principles developed by Fayol, in his well-known work The Management Elements in 1943. In this work, as we say, he exposes his ideas about the principles of the administrative process, always taking Henry Fayol as a point of reference. The second author is Luther Gulick who was born in Japan in 1884 and died in 1966 Gulick contributed to the classical theory of management with his contributions to the functions of managers. As we saw, Fayol established 5 functions that managers should follow and which were Plan, Organize, Direct, Coordinate and Control. To these 5 functions Gulick later added 2 more functions which were Report and Budget. In this way, through its acronym, Gulick coined the acronym POSDCORB, currently used to list the main functions that a company director must develop. I made a video explaining in depth the acronym POSDCORB which if you are interested I will leave it here on the labels. Criticisms of the classical theory of administration One of the main criticisms made of this school of administration is that it lacks experimentation and verification of its ideas and hypotheses. In addition, different theorists have criticized the fact that the human element is not taken into account as the main focus of the organization, but the results it produces, leaving aside humanization and exposing employees to deplorable conditions to maximize their performance. Finally, modern authors call the classical theory "the theory of the machine", since it is based on repetitive actions from which correlative effects are expected. However, beyond the criticism received, the classical theory, founded by Henry Fayol, together with Taylor's scientific administration, determined the foundations of modern administrative theory. With all this I say goodbye for today, if I have helped you and you want to continue learning I leave you two videos for you to click on based on YouTube recommendations. On the other hand, I would appreciate it if you would subscribe to my channel if I have been useful to you by clicking on my logo on the left side of the video. As always, any questions or suggestions please leave them in the comments so I can answer them. See you in the next video