Extended Response On The Classical Management

Goals within my organisation look at where we would continue to strive towards. They are long term aims. They are stated in our professional development plan stating:-

The price of cheese and milk in the market are $2 and $5 respectively.  Assume that the cheese and milk markets are perfectly competitive. What output of milk maximizes profits?

In the beginning of the twenty century, classical management theory was proposed. This classical management theory maintains labours’ high level specialization, centralized decision making, as well as maximize profit. (www.businessdictioary.com ) The main two thoughts of classical theory are bureaucracy and scientific management. Nowadays some people argue that the classical management theory is no longer suitable for modern world and they are outmoded because of the business environment has changed. This management theory is not that feasible since it is inflexible and dehumanized which should be modified. However, there is another voice that classical management theory is the foundation of numerous modern management methods, so it is not out of date and it just need some improvement. The aim of this essay is to discuss two kinds of classical theory bureaucracy and scientific management theory and demonstrate that they are not out of date and they develop into the cornerstone of some modern management theories.

In order to make the greatest profit the manager of the El Dorado Star print should first look at and choose the level of output that has the total profit at its maximum or highest. When looking at this scenario, the total profit maximum which is $980.00 at the output level of 4,000 units being put out each day. The manager of El Dorado Star paper should print and sell 4,000 papers each day.

At the current prices, firms may sell as much product as they want, thereby maximizing profits.

The different management theories have been created to help managers in the way they approach and

Profit price based organizations are based around two main ideas one is target return and the other is maximizing profit (From the expert: Price objectives or orientation. (n.d.). Maximizing profit is a challenging aspect in business because the company needs to find a price point at which customers are happy, while also maximizing returns and profit. The company that comes to mind is Reliance Steel and Aluminum Co. Reliance is the largest metal service center in the world and now is over a 10 billion dollar fortune 500 company. Reliance sells steel B2B on a daily basis with the intention of maximizing profits.

Nowadays we have new implementing plans for management. The different theories of management are: classical, behavioral, quantitative and quality management theory, systematic and contingency management theory.

At first, there is a slow sales growth as the product is introduced in the market due to expenses for introducing the product to the market. Profits are nonexistent because of the expenses to be used for product introduction such as marketing strategy but at the end effective marketing strategy can help to increase profit.

The last approach to classical management was bureaucracy. Bureaucracy was extremely popular in large organizations because it allows companies to perform many tasks while eliminating judgments of managers. Although bureaucracy works well with most organizations it may not be the best approach to organizations that require fast thinking and decision making.

The classical management has two basic drives namely scientific and general administrative management. Scientific management focuses on how to increase productivity whiles the administrative management theory looks at organizations in general and concentrate on how to make them effective and efficient.

Figure 1. Diagram to illustrate the Neo-Classical model. (Source: Author)Figure 1 illustrates the standard Neo-Classical approach. Profit maximisation occurs when the marginal cost [MC] of producing an additional unit equals the marginal revenue [MR] from the sale of an additional unit.

The essay will endeavor to provide an insight into how Fayol’s basic principles of Classical Management Functions are indeed useful in describing managerial work. In the last (20th) century, the role of managers in business becomes more diverse as the number of tasks in which businesses were involved in significantly grew in quantity and complexity. As a result there was an increased interest in the most effective and efficient method of management. This led to the development of different management theories, which included classical

What bugged me was that this is based on the fact that price goes down for every unit we produce extra (demand and supply rule apply here) as there is more of the product to be offered in the market, meaning that we can only sell more if we bring our price down which is not the case. Now after having understood the concept, if I had to redo the concept to be presented to non-financials I would say there is an even simpler profit-maximizing rule: if profits are to be maximized it is so in the point where marginal profit is higher. After understanding the charts and the tables one realizes that that happens at MR=MC and then can go break his head learning that concept.

Planning also is inclusive of determining strategies to meet objectives and usually includes an organization forming a mission statement to which serves and guides an organization. For example the managers at the Bendigo Bank reinforce and state in their ‘mission statement’: “we will focus on building and improving the prospects of our customers, communities and partners in order to develop sustainable earnings and growth for our business and thus provide increasing wealth for our shareholders” (Bendigo Bank, 2010 cited in Krachler et al 2010, p.36). Fayol also assesses and stresses the roles of then organizing and mobilizing “raw materials, tools, capital and personnel”, commanding or selecting ideal labour inputs (human capital)to best accomplish the goals as crucial (Schermerhorn et al 2011, p.90). Without such effective resource allocation, organizations would be unorganized and without direction. With the co-ordination and then control by managers, organizations are able to “harmonize all activities of concern so as to facilitate its working and its success”(Fayol, 1949 cited in Lamond 2004 pp.331-332). Fayol’s theoretical concepts and analysis has built the foundations for modern day managers. The five functions he developed are fundamental and relevant to current day senior managers performing anything from capital