MGF1010 Essay: Relevance of Classical Management Theories Today

This essay critically examines the relevance of classical management theories in the context of 21st-century business environments. It argues that classical theories, which emphasized centralized decision-making and prioritized economic needs over social needs and job satisfaction, are increasingly less relevant due to the fast-paced, globalized, and technology-driven nature of modern business. The essay highlights the shift towards employee participation, innovation, and flexible work arrangements, as well as the importance of sustainability and employee development. It contrasts the classical focus on specialization and centralized control with the modern emphasis on multi-tasking, employee empowerment, and adapting to changing market dynamics. The essay also explores the impact of globalization, technological advancements, and evolving employee expectations on the applicability of classical management principles. Through examples and references, the essay provides insights into why classical theories are not as effective as modern management approaches in today's business landscape.

INTRODUCTION
TO
MANAGEMENT

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“Classical Theories of Management are Not Relevant in the 21st Century.”
Theories of management have played a critical role in the context of modern day
management. In the competitive environment, it is crucial for this company to ensure that
they have a managed all their resources in an appropriate manner. In 21st century business,
modern day management theories have replaced the classical theories. The parameters in the
classical theories differed widely from the 21st century business. This is the major reason why
they are not highly relevant in the modern day business. Classical theories were not designed
as per fast changing global environment, where the external and internal factors are volatile
(Mahmood, Basharat & Bashir, 2012). The expanding pace of globalisation, alterations in the
political relationship of the world has forced the organisations to change their policies at
much faster speed. Classical theories of management were designed to build the
organisational image which is not affected by the external environment. Classical theory is
based on the belief that employees only have economic and physical needs whereas the social
needs and job satisfaction is not of much importance. This cannot survive in the modern day
context as social needs and highly satisfied employees have become the major priority for the
organisations (Yadav, Sushil & Sagar, 2014). Classical management theory advocates
centralised decision making and leadership hence its relevance in the modern day context of
business is not so much. It is seen that in the current business scenario only those companies
are successful that supports employee participation in the decision making. This is illustrated
by the example of all the bigger companies that is having a team to make decisions and
managers are placed at each levels of the organisational structure to lead that particular
department (Baden & Higgs, 2015).
The decreasing relevance is also due to the fact that priority for employees within the
organisation has decreased considerably. This is also supported by the fact that organisations
cannot sustain in the modern day business without putting sustainability as priority. There is
lack in the flexibility that is given to the employees so that they can work in more freedom. In
the increasing pressure on the organisation to perform better, the concept of ideal workplace
has become a secondary practice for the organisations. For example, in the case when the
company aims to have increase in the sales, they forces employees to work for extra hours
and give more commitment to their work. Fredrick W. Taylor’s primary idea behind
developing this theory was to enhance the efficiency of the worker by designing the
organisational structure scientifically (Adegboye, 2013).

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There is an argument that business process optimisation has become the key to success in the
market hence companies must be able to change their work culture, organisational structure
according to the changing business challenges and issues that are confronting them. The
challenges that are faced by the organisations in the 21st century are different from the
challenges that companies were facing in the time when these theories were designed. In the
business context for which these theories were used have also changed. It has pushed the
firms to improve the ways in which theories will have to be inculcated in the operations
(Cullen & Parker, 2015). For example, previously there was lesser competition in any
industry hence companies can design their management approach as per their own
requirements but in 21st century competition has raised to very high levels and hence
management of operations will be have to take a sustainable approach. The classical theory
advocates that an employee must be able to gain specialisation in any one particular task.
This is necessary for improving the performance. Workers need to understand their job roles
and hence enhance their skills to perform better. It eliminates employee’s multi-tasking
approach (Nhema, 2015). On the other hand in the modern day context, it has become
important for the companies to have skills that fit them into multi-tasking roles. This is also
supported by the fact that labour numbers are seriously decreasing in the organisations and
this is forcing workforce to develop skills that supports their multi-tasking ability. For
example an IT company employee will have to do the task that is given to them and at the
same time they will have to ensure the privacy concerns of the company. Sometimes
managers have to do the role of the lower level employees in case there is any requirement.
Companies are focused towards improving the profitability and hence for this, it is crucial
that company reduces the overall cost of operations. This has made the firms to reduce their
excessive cost that is wasted on the employee development programs. Using that money, they
are investing on the technology development programs. There is change in the employee
commitment in the 21st century and employee’s loyalty is on the poor side (Villagra, Cárdaba
& Ruiz San Román, 2016). In such an environment, using classical theories can be difficult.
For example the technologies such as artificial intelligence have reduced the numbers of
employees that were involved in production process.
It is also interesting to note that classical theories were designed in the time when the
technology was not highly used within the firm. 21st century is an era where technology based
work process has gained importance. Almost all the business processes in today’s time is run
through IT. Due to this, there is change in the policies and the way in which business

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processes are held. This is the major reason why there is lack of flexibility in terms of
employee’s demands and hence high amount of resistance towards change can be noticed
from their side (Kitana, 2016). For example when the data management software is installed
within the organisation, it is seen that companies change their policies regarding their
approach to decision making and others.
In the 21st century business, innovation has become the key to success and in the classical
management theories there is restriction on incorporating innovative ideas by the individual
team members. In today’s time, companies are promoting innovative ideas from the side of
the individuals. This is not only necessary in the modern day context for improving the
business model but it is also necessary for improving the ways in which company is able to
face different challenges (Yang, Liu & Wang, 2013). It builds a better organisational
environment that supports employee’s leadership development. Due to increase in the impact
of the globalisation, it is seen that business environment has become volatile especially in the
economic terms as influence on the economy in one part of the world influence the economic
condition in other parts of the world. Classic economic management theories have become
highly irrelevant in the revenue model that firms have made for itself in the modern day
business. For example the retail business has shifted to online and app based mediums and
hence a very different approach to management needs to be applied in their business model
(Akpanabia, 2012).
This scientific theory also do not apply in the modern times in terms of the fact that classical
theory advocates that company themselves should give training to their employees as per
their requirement while today’s business environment suggests that employee’s should focus
in their own development rather than being dependent on the firm. This is necessary for
gripping the opportunities that are available in the organisations. Classical theory ensures the
involvement of managers in the business operations while today’s business environment
demands that all the employees take initiatives so as to manage the work properly. This is
also necessary for enhancing the performance standards from the side of the employees
without making higher investments.

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References
Adegboye, M. (2013). The applicability of management theories in Nigeria: exploring the
cultural challenge. International Journal of Business and Social Science, 4(10).
Akpanabia, N.H. 2012. Management approach for effective management in the 21st century.
Retrieved from:
https://www.elixirpublishers.com/articles/1363599228_52%20(2012)%2011373-
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Baden, D., & Higgs, M. (2015). Challenging the perceived wisdom of management theories
and practice. Academy of Management Learning & Education, 14(4), 539-555.
Cullen, K., & Parker, D. W. (2015). Improving performance in project-based management:
synthesizing strategic theories. International Journal of Productivity and
Performance Management, 64(5), 608-624.
Kitana, A. (2016). Overview of the managerial thoughts and theories from the history:
Classical management theory to modern management theory. Indian Journal of
Management Science, 6(1), 16.
Mahmood, Z., Basharat, M., & Bashir, Z. (2012). Review of Classical Management
Theories. International Journal of Social Sciences & Education, 2(1).
Nhema, A. G. (2015). Relevance of classical management theories to modern public
administration: A review. Journal of Public Administration and Governance, 5(3),
165-179.
Villagra, N., Cárdaba, M. A., & Ruiz San Román, J. A. (2016). Communicating Corporate
Social Responsibility: re-assessment of classical theories about fit between CSR
actions and corporate activities. Communication & Society, 29(2), 133-146.
Yadav, N., Sushil, & Sagar, M. (2014). Revisiting performance measurement and management:
deriving linkages with strategic management theories. International Journal of Business
Performance Management, 15(2), 87-105.
Yang, C. X., Liu, H. M., & Wang, X. X. (2013). Organization theories: from classical to
modern. Journal of Applied Sciences, 13(21), 4470-4476.

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