7 Different Management Theories Explained

Table of Contents1 What are Management Theories?2 Benefits of Management Theories2.1 1. Improves coordination2.2 2. Increased efficiency2.3 3. More Objective Process2.4 4. Quicker decisions3 Types of Management Theories4 1. Scientific Management Theory5 2. Administrative Management Theory5.1 1. Division of Work5.2 2. Equity5.3 3. Discipline5.3.1 4. Initiative5.4 5. Authority and Responsibility5.5 […]

What are Management Theories?

Management theories are a set of concepts that lay out a framework for managing an organization. Such management theories have existed since ancient times. They are still employed to figure out how an organization should run and how managers can guide their teams.

For example, management theories describe how managers can get their employees to be more proactive and achieve their full potential. They also describe the process of setting targets and strategizing. Usually, multiple management theories are combined to get the desired effect.

Benefits of Management Theories

1. Improves coordination

The leaders can use management theories to improve cooperation in the office. In addition, they can motivate the employees to be more proactive.

2. Increased efficiency

A management theory can be used to help employees reach their full potential. This improves performance and efficiency in the office.

3. More Objective Process

A good Management theory will get leaders to use data for decision-making rather than intuition.

4. Quicker decisions

A well-applied management theory helps managers become more productive. It quickens the decision-making process.

Types of Management Theories

Administrative Management Theory

1. Scientific Management Theory

Scientific management theory relies on overseeing tasks, thorough training, and delegation according to responsibility, mathematical analysis, specialization, and standardization. In late 1800s, Fredrick Taylor began to use scientific experiments to tap into the workforce’s full potential. The 19th-century research showed that intuition for decision-making has its limitations. On the other hand, using the scientific approach can significantly improve the productivity of the workforce. The scientific management theory believes in delegating tasks according to the expertise of people, and this was a major improvement. This emphasis on optimization is also one of the strengths of the theory.

Scientific management theory believes that this is the only way to improve productivity in the office. The limitation to the management theory is that in the pursuit of optimization, the human needs of the people are compromised. This process might not go down too well with the modern employee. The drawback is that the focus is far too disproportionately in favor of micromanagement. This emphasizes individual problem-solving at the expense of innovation. So teamwork takes a back seat.

2. Administrative Management Theory

The administrative management theory was devised by Henry Fayol, an engineer and a miner. He tried to analyze the potential scenarios that a manager might have to deal with. It is a very top-down method of dealing with a team.

The study gave birth to the administrative management theory, which says that any manager has six primary responsibilities that they must meet.

  1. Organize
  2. Command
  3. Control
  4. Coordinate
  5. Plan
  6. Forecast

From these, Fayol devised 14 administrative principles that describe how managers should guide their employees. To this day, large businesses use these principles to guide their firm. These principles are varied and describe things such as the necessity for team members to be proactive or maintain a spot on cleanliness. The principles are described below:

1. Division of Work

There is increased speed, accurateness, competence, and output

2. Equity

Employees receive the same treatment of respect and equality

3. Discipline

Leaders need to invest less time, and the business grows

4. Initiative

Help the workforce become more proactive

5. Authority and Responsibility

Everyone knows their tasks, and there is increased productivity

6. Esprit de Corps

Employees have more faith in each other

7. Subordination of Individual Interest

Employees respect the hierarchy and prioritize the organization

8. Stability

Employees are assured of their jobs

9. Remuneration

The employees are rewarded for their hard work

10. Unity of Direction

A collective target that encourages the employees to pursue it together

11. Centralization

Power distribution and hierarchy are in equilibrium

12. Scalar Chain

Power flows from the highest in the structure to the lowest

13. Unity of Command

Multiple leadership causes chaos and conflict

14. Order

A healthy work environment encourages team members

3. Bureaucratic Management Theory

The bureaucratic theory believes there should be a well-laid management framework and stress forming a clear hierarchy. This management theory requires promoting or hiring employees according to their skills and how well they have performed. It also stresses laws and regulations to be followed closely, a comprehensive collection of data and keeping records, a distinction between the business and personal assets of the founders, labor division, clear hierarchy.

Designed by Max Weber, this management theory laid out principles and regulations that are still in vogue to this day.

The management theory highlights these five principles:

1. Assignment specialization

Max Weber believed every employee should have a clear and distinct responsibility to fulfill.

2. Official selection

Leaders do not get to join according to collective preferences. They can come aboard if they are suitably qualified. Management should be reserved for people with qualifications.

3. Chain of command

Max Weber also stressed the need for precise and proper distribution of authority in the firm.

4. Neutral

Rewards such as promotions, etc., should be done based on performance and not feelings or preferences. Therefore, the functioning of the organization should be according to these regulations and impersonal.

5. Regulations and responsibilities

Max Weber mentioned how it is vital for organizations to have uniform standards enforced through regulations. In addition, there should be complete clarity on the responsibilities of people.

The positive of the bureaucratic management theory is that laws and regulations are required for businesses. However, conversely, they are hard to execute. People cannot be separated from emotions, and they do carry some value. Thus, there is a gap between theory and practice. Also, this theory has some of its roots in the classical management theory.

4. Human Relations Management Theory

Human Relations Theory comes from research on altering the workday, break lengths, lighting in the office, and other workplace factors. Elton Mayo developed it through research on improving efficiency. His work was the groundwork for the movement of human research. He made consistent alterations in his experiments, and each time, there was a productivity improvement. He figured that these improvements came more from the care the researchers provided the team members and their sense of worth. The alterations were secondary.

The human relations theory thus formed a belief that people are encouraged less by working conditions and monetary benefit and more by the sense of value and the chance to be part of a team. Also, Elton Mayo along with Mary Parker Follett and Abraham Maslow came up with the “behavioral management theory”; which understands worker motivation, such as their needs and interests, expectations, and group dynamics.

5. Systems Management Theory

The systems theory believes that an organization can perform well if it has reliance and interconnectedness between subsystems that are in sync. It sees the organization as having many subsystems which must coordinate to achieve success. Systems theory believes that workgroups, subdivisions, and units all add crucial value. However, the core of any organization consists of the employees.

Systems theory emphasizes the need for assessing internal trends to design the best approach. The management and teams should co-operate to achieve the targets.

Coordination between business units can add tremendous value to the company. However, this does not describe how most businesses function, where the units are separate. As a result, the poor performance can have a terrible impact on the whole business without directly affecting some other units.

6. Theory X and Y

This management theory state two particular management style, which are polar opposites of each other. The approach depends on what the manager believes will encourage the team.

Managers adopting Theory X are authoritarian and believe employees do not like their jobs and do not care about them. This lack of trust means they will preside over the smallest of responsibilities.

Theory Y managers believe that employees can be proactive, enjoy their work, and take responsibility for it. Such managers tap into the creative potential of their teams and get them in on decision-making.

This management Theory took shape in the book Human Side Of Enterprise written by social psychologist Douglas McGregor in 1960.

It has been seen that large organizations lean towards Theory X and smaller ones towards theory Y.

7. Contingency Management Theory

The contingency management theory believes there is no one size fits all management theory. A manager’s leadership abilities stem from how well they guide their team. There might be some universally beneficial leadership qualities. Nevertheless, a good manager constantly evolves according to the scenario they are in.

This management theory was developed by Fred Fiedler, who then applied this logic to a broader business organization. He claimed there could not be one particular management theory for all organizations. Instead, he laid out three variables that should determine management theory and business approach as follows:

  1. The business’s size
  2. The technology used
  3. The leadership throughout the hierarchy

So any leadership using the contingent management theory must assess every situation by itself and then design the management approach. Implementations should also be swift and sure when the need arises. This theory is part of the modern management theory.

How to use Management Theories in your Workplace?

Management Theories in your Workplace

1. Broadbanding (Flatten the organizational Structure)

Flattening the hierarchy involves removing senior management roles and designations. Alternatively, more junior leaders are given the authority to make decisions on the spot instead of waiting for the go-ahead from senior management.

This helps create a united and cooperative workforce. Studies also show that this flattening has the effect of inspiring employees to become more creative. It also helps the team arrive at decisions more quickly. As a result, this is becoming one of the more popular management theories.

2. Focus on training Workforce

Organizations should get their employees’ proper training so that they can perform their tasks better. This improves performance and efficiency in the workforce. This is where human relations theory can have an effect. The attention employees and their performance get can boost efficiency. The scientific theory can also improve workforce efficiency by regulating the work process and getting the employees to adhere to best practices.

3. Delegation of Authority

Human relations management theory lays stress on forming personal ties and increasing cooperation. This can be done by including them in the decision-making process. They can help define the targets and strategies for their divisions.

They can have more control over their responsibilities. They can be organized into workgroups that can take part in decisions to help reach business targets.

Forces Influencing Management Theories

These are the factors that play a central role in the development of various management theories. These are listed below:

1. Political Forces

Political forces have a massive influence on the management theory adopted by a business. The regulations and political developments can make or break a business. However, these are external factors, and the business cannot influence them. Management theory has been affected by political forces such as employee rights, and organizational design, and environmental analysis.

2. Social Forces

Social forces are the customs and value systems that are unique to every culture. These social forces play a significant role in determining the leadership style and approach to motivation that managers have.

The social forces of the olden days meant that the employees were exploited and mistreated. However, recent advances in society have ensured that the workers have received increasingly fair treatment and working conditions have improved.

3. Economic Forces

Economic factors have had a significant impact in deciding the structures of many businesses and their patterns of growth. The economic factors can be highlighted as globalization, competitive markets, economic freedom, private ownership of property, public enterprise, and market economy.

Conclusion | Key takeaways on Management theories

Management theories describe a framework that managers can use to guide and run their organizations. These are usually meant to motivate the workforce and get the maximum productivity from them. Different management theories have been around for ages, but in the 19th century started getting articulated for businesses.

The Scientific Management Theory developed by Frederick Taylor stressed assigning responsibility according to the people’s skills. It brought a scientific approach to management theories. The theory focused intently on optimization while compromising the needs of the workforce.

Another one of the management theories took the administrative approach, laying out six factors that all managers have to deal with. The Administrative Management Theory of Henry Fayol stresses upon 14 principles developed from those factors.

The Bureaucratic Theory of Max Weber stresses the need for a clear hierarchy that can be used to enforce a series of regulations to improve productivity. However, this can be hard to implement and execute in practice.

Human Relations Management Theory stresses the need for human contact and making employees feel valued over monetary incentives or improved workplace conditions.

The Systems theory believes that an organization can be divided into subsystems that can coordinate between themselves to achieve the organization’s targets.

Douglas McGregor, who developed the Theory X/Theory Y management style, believed a manager adhering to Theory X would be authoritative and distrust the motivations of their employees. However, a manager subscribing to Theory Y will believe that their employees are self-motivated and like their jobs. They will include them in the decision-making process.

The Contingency Management theory emphasizes that there is no one size fits all management theory. Leaders should assess the scenario and then choose the best management style.

Managers can use a combination of management theories to help inspire the workforce and maximize their efficiency. They can invest their resources in training the employees to perform better, as the Human Resource management style would emphasize. They can enforce best practices in the workforce through the adoption of regulations derived from scientific management theory. They can also include the team members in the decision-making process, which would align with the Human Resources method. Another trend is to “flatten” the organizational structure. This means giving more decision-making authority to junior managers or removing senior management roles altogether. This inspires innovation and cooperation.

There are, of course, external factors that have a considerable influence on the management theories adopted by the firm. These are social, economic, and political factors. The firm’s leadership cannot influence these elements, but the leadership must adapt to developments in these fields.

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