The current management practices have evolved from earlier theories. Management practices were actually a part of the governace in ancient times. Most of the current understanding of management, however is based on the classical theories of management that were introduced in 1800s during industrial age.

  1. Classical Management Theory: It is the oldest theory and is sometimes referred to as traditional management theory. The classical perspective includes three sub fields of management: scientific management, bureaucratic management and administrative management. (Wren, 1979, Daft and Marcic, 2001)
  • Scientific Management Theory: In this theory, the focus is on the goals and productivity. The organization is viewed as a machine to be run efficiently to increase production. Managers must closely supervise the work to assure maximum efficiency. Workers must have proper tools and equipments. There is a focus on training the workers to work more efficiently and performance incentives are used. Time and motion studies are the vehicle for determining how to do and organize the work in the most efficient manner.
  • Bureaucratic Management Theory: The focus of this theory is on the superior-subordinate communication transmitted from top to bottom via a clear chain of command, a hierarchy of authority and division of labor chain. This theory uses rational and impersonal management process. Here, there are explicit rules and regulations for the governing activities, focusing on exacting work processes and technical competence. There is a use of merit and skill as the basis for promotion or reward. The emphasis is given on lifetime career service and salaried managers.
  • Administrative Management Theory: Here, the focus is on the science of management and principles of an organization applicable in any setting. It identifies the need for 'POSDCORB' where P stands for planning, O for organization, S for staffing, D for directing, Co for co-ordination, R for reporting and B for budgeting. It is mainly concerned with the optimal approach for administrators to achieve economic efficiency.
2. Human Relation Management Theory: In this theory, the focus is on the empowerment of the individual worker as a source of control, motivation, and productivity in the organizations. The Hawthorne studies led to belief that human relations between workers and managers and among the workers were the main determinants of efficiency. The 
Hawthorne effect refers to the phenomenon of how being observed or studied result in a change of behavior. This theory also emphasizes on the participatory decision making which increases worker's autonomy. It also lays emphasis on the training of the employees to improve work.



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