Classical Theory

Classical Theory refers to a set of principles in economics and management that emphasize rational decision-making, free markets, and the idea that individuals and firms act in their own self-interest to allocate resources efficiently. It suggests that markets tend to naturally reach equilibrium where supply meets demand, driven by competition. In management, it highlights clear hierarchy, organized authority, and standardized procedures to increase efficiency. Overall, Classical Theory assumes that with minimal interference, economic and organizational systems will operate optimally.