Explore the dynamic landscape of organisational efficiency and employee relationships through the lens of management theories. You will discover the principles that shape modern management practices, providing valuable insights for both novices and seasoned professionals navigating today's multifaceted business environments.
Management theories provide a framework for varying working environments and company cultures. And, it is not just one management theory that applies to all settings. Some companies may blend two or more theories to adapt the styles of management and leadership for the employees.
Let’s look at the most popular management theories in the management domain today.
- Scientific Management Theory
- Classical Management Theory
- Administrative Management Theory
- Human Relations Theory
- Contingency Management Theory
- Bureaucratic Management Theory
- Systems Management Theory
- Theory X and Theory Y
1. Scientific Management Theory
In his monograph, The Principles of Scientific Management, Frederick Winslow Taylor advocated the scientific management theory around 1911. According to this theory, he proposes that working hard is not a determining factor for improving business goals. Instead, tasks can be simplified systematically to meet goals.
There are four scientific management principles.
- Science, Not Rule of Thumb – Finding an objective approach to complete a job, through constant experimentation
- Harmony, Not Discord – Creating a positive atmosphere for employees and employers
- Cooperation, Not Individualism – Both managers and employees should be involved in deciding and determining standards.
- Development of each Individual’s Efficiency & Prosperity – From the moment the employee is hired, they should be put into training and development. Work should be allocated based on their skills and interest.
2. Classical Management Theory
It follows a hierarchical structure where one leader makes the decisions. This management theory is based on the assumption that employees/workers have only financial needs. If the company can fulfil the employee’s financial needs, that is motivation enough for increased productivity.
While there is a clear division of labor and clarity in management, some criticisms are involved. It does not factor in developing relations with employees and fails to provide ground for innovation.
3. Administrative Management Theory
Known as Fayolism, as introduced by Henri Fayol, this theory consists of 14 principles. They are popularly known as the 14 principles of management.
- Division of labor
- Authority and Responsibility
- Unity of Command
- Unity of Direction
- Subordination of Individual Interest
- Degree of Centralization
- Scalar Chain
- Stability of Tenure of Personnel
- Esprit de Corps
Also check out What is Administration? to find out how these principles are advocated.
These 14 principles are based on six types of managerial responsibilities.
4. Human Relations Theory
Developed by Professor Elton Mayo, this theory looks into human needs. As part of business management back in the day, this theory evolved out of the Hawthorne Studies conducted by Professor Mayo and colleagues.
There are four factors in this theory. Employee, group of employees, supervisors and the company/organisation. These four factor contribute to six different elements.
- Treating employees people with a focus on building human relations as opposed to considering them as machines
- Promoting positive values through encouraging interaction at workplace
- Providing effective supervision and removing stress and fatigue among employees
- Creating healthier working conditions
5. Contingency Management Theory
Emerging in the 1970s, this theory was proposed by Fred Fiedler. It suggests that leadership should be adaptable to any situation. There is not one way for organising, but multiple. In this case, the responsibility falls on the leader, who should be able to adapt according to internal and external factors.
Some of the most crucial factors in the contingency management theory are
- Structure of Work/tasks
- Leader-employee Relationship
- Leader’s power
Fiedler developed a least-preferred coworker (LPC) scale where the leader can highlight the employee who is the hardest to work with and then rate them.
A similar read would be the Hersey Blanchard model, well known as the Situational Leadership Theory.
6. Bureaucratic Management Theory
Developed by German sociologist, Max Weber, bureaucratic management theory is based on the systematic formation of an organisation that bases itself on efficiency. There are six characteristics or principles to explore in this theory.
- Hierarchical structure
- Management based on rules
- Specialisation of tasks
- Impersonal approach based on rationality
- Career orientation
- Hiring based on employee’s ability and skills
7. Systems Management Theory
This management approach considers that an organisation consists of many subsystems. They need not work together but work for the whole. The different components
This theory originated in the 1950s and provided a holistic perspective on management that the classical management theory could not.
8. Theory X and Theory Y
Social psychologist, Douglas McGregor developed this management theory in the 1960s. Theory X and Theory Y are two contrasting motivational methods that managers should be aware of.
In theory X, the assumption is that employees dislike work because of which they must be coerced to meet organisational goals. In theory Y, the assumption is that the employee is already interested in the work. And that, they can already meet business goals through self motivation, provided they get enough motivation to work. According to McGregor, Theory Y should be adopted in organisations.
To learn about motivation in the workplace, you may check on the commonly known and practised theories of motivation.
These are the eight management theories that are popularly used. Whether you are new to organisations as a fresher or are switching jobs, you will notice the management styles are a mix of these theories. Hopefully, understanding these will help you answer general management interview questions and help you deal with complex managerial situations.
Make sure to check out some management courses as well.
What are the 5 main management theories?
The five main management theories encompass Scientific Management, Classical Management, Administrative Management, Human Relations Theory, and Contingency Management. These diverse frameworks offer unique perspectives on organisational structure, employee motivation, leadership styles, and decision-making processes.
What is meant by management theory?
Management theory refers to a structured framework or set of principles, concepts, and ideas that aim to understand, explain, and guide the practice of managing organisations. It involves studying and analysing different approaches to managing people, resources, processes, and structures within an organisation.
What are the 3 approaches to management?
The three primary approaches to management include the following.
1. Classical Approach: It focuses on principles of efficiency and productivity. It consists of Scientific Management, which emphasises systematic methods to increase productivity, and Administrative Management, which focuses on organisational structure and hierarchy.
2. Behavioural Approach: This approach centres on understanding human behaviour in the workplace. It encompasses theories like Human Relations, which highlights the importance of social and psychological factors in employee performance and motivation.
3. Quantitative Approach: This approach involves using mathematical and statistical methods to aid managerial decision-making. It includes disciplines such as Operations Research and Management Information Systems, applying quantitative models for improved decision-making processes.
What is the scope of management?
The scope of management includes various functions, responsibilities, and areas that managers handle to achieve organisational goals effectively. The scope typically involves planning, organising, leading, and controlling resources. That includes human, financial, material, and informational. And it adaps to dynamic internal and external environments. Management also covers aspects like decision-making, problem-solving, coordinating activities, etc. That helps in fostering innovation, ensuring efficiency, and creating a conducive work environment for employees. Overall, the scope of management is broad and extends across all levels and functions of an organisation.
What is modern management theory?
Modern management theory encompasses a diverse set of approaches and concepts developed in recent times to address the complexities of contemporary organisations. It includes various theories such as Contingency Theory, which highlights that there is no one-size-fits-all approach to management and that the most effective method depends on the unique situation. Systems Theory views organisations as interconnected systems, considering the relationships between different parts within an organisation. Socio-Technical Theory emphasises the interaction between social and technical aspects of work, understanding that both elements influence organisational effectiveness.