Other writers call it the ‘traditional or classical theory’, ‘management or structural theory’. The foremost proponents of this theory have been Henry Fayol, Luther Gullick, Lyndall Urwick, J.D. Mooney, A.C. Railey, M.R Follet and R. Shelton. These early classical writers frequently used organisation and management principles interchangeably. This was partially due to the extreme importance classical theorists placed on organisation.
It played the largest single role in management. The most important concern of the classical theory is the formulation of certain universal principles of organisation. It deals primarily with formal organisational structure. The theory assumes that there are certain fundamental principles on the basis of which an organisation can be established to achieve a specific objective.
The watchwords of this approach are efficiency and economy, as it conceives that these principles, if fully adopted, can lead to maximum organisational efficiency and economy. The structuralisms were chiefly concerned with discovering the true basis on which work can be divided in an organisation and dividing proper methods of bringing about effective organisational coordination.
Henry Fayol (1841-1925) observed that management was an undertaking common to all human activities. He enunciated certain basic concepts and principles of management and viewed management as a teachable theory dealing with planning, organizing commanding coordinating and controlling work processes.
Fayol’s is often considered the first complete theory of management. Fayol was primarily concerned with the job of the chief executive and pinned his faith in the principle of unity of command. Fayol divided all activities in an organisation under six groups: technical, commercial, financial, security, accounting and administrative.