Administrative Management Theory Or (Classical Organisation Theory) Explained!

What is Administrative Management Theory?

The Administrative Management Theory, also known as the Classical Theory of Organization, is developed by Luther Gulick and Lyndall Urwick. It is defined as a legal-rational way to design an organization with a formalized administrative structure, a clear division of labor, and delegation of power and authority to administrators relevant to their responsibilities.

They believed it was possible to develop a science of administration based on principles. They pointed out that even an engineer, at one time, was considered a craftsman who only developed these skills at the bench.

Only through empirical observations, analyses, and systematized findings committed to recording and documentation over a considerable period the science of engineering became possible.

In the same way, if the experiences of administrators are processed, it could be possible to develop a science of administration. Administration hitherto remained an art, and there is no reason why it cannot be developed into a science. (IGNOU Publication, 2001).

Why it is also called Classical Theory of Organisation?

It was Herbert Simon, who first used the term “Classical Theory” in public administration in the early twentieth century. Other administrative theorists such as Henry Fayol, Luther Gulick, Lyndall Urwick, J.D Mooney, and A.C Reiley have also played important roles in the development of classical theory of administration.

The most important concern of the “Classical Theory” is the formulation of certain universal principles of organization. It deals primarily with formal organizational structure. The theory assumes that there are certain fundamental principles based on which an organization can be established to achieve a specific objective.

This classical theory of organisation is marked by four features impersonality, specialization, efficiency, and hierarchy. An important contribution of the classical theorists, in general, is their attempt to find certain universal principles of organization (Basu, 2001, p.69-72).

Gulick’s Contribution in Administrative Management Theory

Gulick was born in Osaka, Japan, in 1892 and was educated at Columbia University. He obtained his Ph.D. in 1920 from Columbia University. He secured his Litt. D. In 1939 and was conferred LL.D. in 1954. He served the National Defence Council during First World War.

He was associated with the City Research Institute in New York. He worked as administrator of New York City during 1954-56. He also served as a professor in several universities and consultant in administration for several countries (IGNOU Publication, 2001). 

Gulick served several years with the New York Bureau of Municipal Research (later renamed the Institute of Public Administration). From 1931 to 1942, he was a professor of Municipal science and administration at Columbia.

He founded several major professional associations, including the International Management Association, the Public Administration Clearing House, the Brookings Institution, the American Society for Public Administration, the National Academy of Public Administration, and the National Planning Association.

His important writings are Administrative Reflection from the Second World War, Modern Management for the City of New York, Metropolitan Problems, and American Ideas and Papers on the Science of Administration (1937). This was jointly edited by Urwick, an attempt to summarize the state of knowledge of administration and management (Schultz, 2004:204).

GULICK’s 10 PRINCIPLES OF ORGANISATION

Having stressed the importance of the structure as a designing process Gulick and Urwick devoted their attention to the discovery of principles based on which the structure may be designed. Gulick enumerates ten principles of organizations. In working out these principles, Gulick was very much influenced by Henri Fayol’s Fourteen basic elements of administration.

The ten principles of Organisation are as follows –

1. Division of work or specialization
2. Bases of departmental organizations
3. Coordination through hierarchy
4. Deliberate coordination
5. Coordination through committees
6. Decentralization
7. Unity of Command
8. Staff and line
9. Delegation and
10. Span of control

Among Gulick’s ten principles of administration listed, He emphasizes the “Division of Work.” He feels that division of work is the basis of the organization, indeed, the reason for the organization. (Gulick,1937).

Work division implies that the job to perform is broken into its component functions, and again each of the component functions is broken down into simple repetitive activities. At each stage, the sub-division of work is followed by interrelating the divided parts.

The focus of attention is shifted from grouping the various activities into sub-units, collecting the sub-units together to form units, and inter-relating the units to create the overhead organization. But Gulick was conscious of the limitations beyond which the division of work cannot go. He cites the volume of work, technology, custom, and physical and organic limitations. (Gulick, 1937).

Gulick identified four bases to divide work and create departments in the organization. These are known as the 4Ps of Gulick. (Gulick:1937)

1. Purpose Function
2. Process (method/technique)
3. Person (clientele)
4. Place (area)

But Gulick ignored important factors like culture, environment, and political factors which influence work division. These bases are incompatible with each other, and there is overlap between different bases of the department. In contemporary organizations, all four bases of the departmental organization are adopted in the same organization.

Gulick identifies the “Span of Control” as an important principle of organization. It refers to the number of subordinates that an individual can personally direct. He discusses four variable which determines the span of control

1. The personality of the supervisor,
2.  Diversification of the functions of the organization,
3.  Age and tradition of organization,
4.  The caliber of subordinates.

Criticism of Administrative Management Theory

The principle of organization of Gulick and Urwick was subjected to several criticisms. Normally principles are to be universal truths that are subject to verification. But such validities are absent in their work. Their work became action recommendations but not scientific principles. They are criticized for lacking behavioral analysis and neglecting the human factor in administration. Their method is called prescriptive rather than descriptive. Herbert Simon argued that it is a fatal defect of the current principles of administration. It is also argued that Gulick and Urwick have shown concern only for the formal organization to the total neglect of the informal organizational processes. The dynamic nature of administration and the ever-changing setting in which it functions needs to be given adequate attention by the-classical theorist (Prashad and Prashad: 2000, p.102-106).

Many writers also criticized the Administrative Management approach. They argued that there needs to be more consistency in the work of these writers. The term ‘principle’ is used in different ways by different authors. Sometimes it has a descriptive connotation. It expresses the relation between organization variables, as some writers have questioned the scientific validity of the principles. Normally a principle is subject to verification. But such universality is absent in these principles. They appear more like postulates of experienced men who have closely observed the working of organizations. Herbert Simon has commented that the principles are little more than ambiguous and mutually contradictory proverbs. They form neither a coherent conceptual Pattern of determination nor an accurate description of concrete empirical reality (Clegg and Dunkerley, 1980:102).

He says that it is a fatal defect of the current principles of administration that, like proverbs, they occur in pairs. For almost every principle, one can find an equally acceptable contradictory principle. Thus, POSDCORB remains a concept that needs to be more useful in describing executive functions. It lacks the more current notions of organizational behavior, which include motivation, employee needs, morale, and working in teams (Schultz, 2004:P.332).