The aim of this paper is to understand if the classical and modernist approach has a place within modern organisations. First, an understanding of both approaches will be carried out, identifying key ideologies and theories these approaches may contain. Then, a discussion on the literature surrounding the suitability of these approaches with modern day organisations. To finish, a conclusion will take place summarising the main points and understanding the possible limitations.
The classical approach was born in a time where the western world experienced a high level of industrial growth, where business was synonymous with trade (Hester and Gerrie, 2008).
It was a time where business competitiveness by America was growing, but Europe struggled to stay ahead with the changes seen in the business world’s size and complexity (Burnes, 2009). A widely accepted management approach was needed by the turn of the twentieth century, in order to replace an inconsistent ‘rule’ approach previously seen (Burnes, 2009). A heavy theme that occurs with the organisational classical approach theory is that power and control comes from a sense of knowledge.
Therefore, managers should only have this control (Burnes, Cooper and West, 2003). Key academics who underpin the classical approach and who have developed the theory into a management control system are F.W Taylor, Adam Smith, Karl Marx and Henri Fayol. An understanding of their key ideas and influences are described below. F.W. Taylor, an academic in the classical approach school of thought was an influential figure in the scientific management approach (Parker and Ritson, 2011).
Britain and Europe was struggling to stay ahead of competition, because of ineffective management, government and businesses activity (Burnes, 2009; Parker and Ritson, 2011). A reason to this ineffective control in Britain’s business environment was a lack of scientific approach to control and leadership (Parker and Ritson, 2011). Standardization in human engineering was a key area in which F.W Taylor tried to develop a ‘best way’ (Taneja, Pryor and Toombs, 2011; Parker and Ritson, 2011). A clear, bullet point procedure and process should be in place so management and employees know what needs to do and when (Taneja, Pryor and Toombs, 2011). This approach was seen to be effective, cheap and successful and used in businesses such as Ford, with the logo ‘any colour as long as it is black’ (Taneja, Pryor and Toombs, 2011). Adam Smith and Karl Marx developed the division of labour factor into the classical approach.
Division of labour, in terms of production, is separation of the operations as a whole and each worker having to completing a different part of that operation (Searle, 2009). Baloglou (2010) explains that division of labour under Adam Smith’s research lead to employees being more skilled in what they are producing, the end product being to a higher standard, time being saved in production and also the increase in production levels. Henri Fayol, a key player in the movement of the classical approach, categorises the role of management as organising, commanding and controlling employees (Fells, 2000).
He explores the concept of unity of command and states that this is a key principle of management (Yoo, Lemak and Choi, 2006).Unity of command can be described as employees or departments only being managed by one source (Finkelstein and D Aveni, 1994). It is understood, that division and centralisation or decentralisation can enhance this principle of unit of command (Finkelstein and D Aveni, 1994). To add further insight, this contributes to the paternalistic attitude this theory holds, the fact that employees need to be told what to do and when to do it (Hester and Gerrie, 2008).
The modernist approach is very similar to the classical approach, as this theory understands that the scientific process is a snowballing step towards complete knowledge and human perfection (Hatch and Cunliffe, 2006). However, the modernist approach unlike the classical approach has a style that trusts a solid philosophy of “being” which privileges thinking in terms of discrete outstanding conditions, static characteristics and progressive events (Chia, 1995). Modernism emerged in 1960; it was the first to understand that organisations are irrational, and that the very rational functional approach seen before had to change (Grieves, 2010). Modernist theorists understand how their organisations work and how change in environmental conditions can affect how the business functions (Hatch and Cunliffe, 2006).
If the business has complete knowledge and human perfection, which the modernist approach aims to achieve, organisations will be able to cope with changes and increase their profitability and develop their core competencies (Hatch and Cunliffe, 2006). Some theories that come under the modernistic approach are the general systems theory and the contingency theory theses will be discussed below. Lugwig Von Bertalanffy created the general systems theory in the 1950’s (Hatch and Cunliffe, 2006). The general systems theory was designed to overcome the mistake and possible danger to organisations by disciplinary specialization (Mulej; Potocan; Zenko; Kajzer; Ursic; Knez-Riedl; Lynn; Ovsenik, 2004). Understanding the science of both the natural world and all the elements in social science, Bertalanffy believed that if the principles and laws of which all items share where found, a system can be created that would apply to all levels of hierarchy (Hatch and Cunliffe, 2006).
From this, it would mean that every part and system in the business would be able to share information and energy with the environment outside of the organisation (Caldwell, 2001). This theory can be used as a strategic tool as it will help the organisation understand all different parts in the organisation and how they relate to each other (Capps and Hazen, 2002; Hatch and Cunliffe, 2006). It overcomes some of the problems previously seen in the classical approach, as where the classical approach focuses on the bottom of the hierarchy, the general system approach makes the business consider each part of the business (Hatch and Cunliffe, 2006).
Contingency theory come into place in the 1960’s when studies started to understand that ‘the one best way’ seen in the classical approach may not work or be beneficial to organisations (Hatch and Cunliffe, 2006). This theory suggests that business may become more effective if they line their structure with certain factors, such as their environment and goals (Teasley and Robinson, 2005). Research also suggests that with a contingency theory business are able to control the performance levels in their business, as the structure that is needed in a contingency business allows organisations to identify certain parts of the chain (Cadez, 2007).
Many argue the validity of the classical approach and how suitable it is to contemporary organisations. Taneja, Pryor and Toombs (2011) argue, F.W. Taylor notions that are embedded in the classical approach are still being utilised in modern organisations. The reason for this, is because F.W. Taylor’s ideas on concentrating on processes, systems and business performance is what business need to do today, in order to stay ahead the ever changing business environment and stay ahead of their competitors (Taneja, Pryor and Toombs, 2011). Payne, Youngcourt and Watrous (2006) agree with this as they understand that Taylor is a major contributor into how management should be done. Also, it has been state that 89 percent of all textbooks on management examine his theory, meaning that it is important modern day managers understand his concepts (Payne, Youngcourt and Watrous, 2006).
Research has also discovered a modern developed classical approach is being used in modern organisations, like the government (Evangelopoulos, 2011). To meet the needs of the customers and have effective employee, businesses are combining F.W. Taylor’s ideas with the more modern total quality management approach (Evangelopoulos, 2011). So, it is fair to argue that the classical approach can be used if slightly developed. The modern business environment is hard to predict, with market fluctuations, economic downturns and a changing business approach, such as, Britain’s manufacturing past has turned to a more service industry (Clem and Mujtaba, 2010).
With technology advancements improving businesses operations, it is understood that treating employees in the classical Henri Fayol approach may not be suitable to modern day, as it is likely to lead to a high turnover and a shortage of skills in a organisation (Clem and Mujtaba, 2010). Hartley (2006) also agrees with this statement, saying that it is important for all modern organisations to have a historical foundation.
However, as the current business environment is struggling with a lack of creativity, management and a vast downsizing of all organisations, a classical approach to business would have a negative impact on business and how they management the morale of their organisation (Hartley, 2006). Following this, Moss and Green (2001) argue that the managerial role has changed since the planning, organising and controlling of employees, which the classical approach introduced. Management has become a more interpersonal and informational role, which also involves a decisional factor, such as negations (Moss and Green, 2001).
It could be said that the modernist approach is suitable to modern day organisations. Capps and Hazen (2002) argue that the general systems theory could be used in modern day organisations as a key strategic tool as this modernist theory aids understanding and development. On the other hand, it has been said that the general systems theory is only suitable for organisations in stable environments (Hatch and Cunliffe, 2006). As we now live in a globalised fast paced environment, flexibility and change is needed in the organisation and the ‘one best way’ the modernist approach tries to discover may be inappropriate (Hatch and Cunliffe, 2006). French (2009) suggests that the general systems theory is inappropriate to organisations in the modern day. This is because, with the growing knowledge businesses are receiving in strategy and change, a one system approach is now redundant as organisations understand that there is a least five approaches to strategy (French, 2009). These could be cybernetics and developing dynamics, open systems, chaos and dissipative systems and complex self-adapting systems (French, 2009).
Answering the question whether the Classical/Modernist approach was appropriate to the time in which it was developed but it is no longer suitable to the needs of contemporary organisations and change, is difficult as you can argue either way. However, to conclude, from the research carried out it is fair to say that with the ever changing business environment and advancements is technology the organisation should not fully incorporate one such approach. Instead they should have a clear understanding of all managerial history.
But, understand that changes in the business environment and the economy will mean that the organisation will have to adapt and change the way they treat their employees and develop their operations. There are some limitations to this research. For example, Hartley (2006) states that not enough research has been carried out in comparing organisations that use the classical approach, businesses that use the modernist approach and ones that use post-modern or post-post-modern. If full understanding in the effects of having a classical or modernist has on contemporary organisations, this may need to be researched in the future.