Development of Management Theory

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The Importance of Management Theories in Professional Management

The requirement for the development of management theories came up with the requirement for professional management in an organization. A thorough study and analysis of the management of business operations along with performance management has been contributing towards the running of an organization in accordance with its objectives and goals. A detailed study of various management theories and approaches has been presented below. 

List of Management Theories

Over the years, several different contributions by management practitioners and writers have resulted in a myriad of approaches to business management. These comprise a “management theory jungle” as described by Koontz and Weirich. The following are the major contributions of management practitioners.

Scientific Management Theory by Frederick Taylor

In his attempt to use the systematic study as a part of his theory, Frederick Taylor found a developmental approach towards professional management. His theory known as the scientific management theory is based on 5 principles as stated below.

  • Developing scientific techniques to analyze and determine the best methods of doing a particular job.

  • Scientific management in selecting and training workers for maximum productivity.

  • Creation of an organizational cooperative environment to avoid discord in group action.

  • Ensuring an equal distribution of work and responsibilities to achieve maximum cooperation and zero individualism. 

  • Working towards ensuring maximum output. 

Bureaucracy Theory by Max Weber

The idea of organizations to be bureaucratic was brought forward by Max Weber. This ensured control on the basis of knowledge, work experience, and expertise. His theory represents a hierarchical pyramid where rules and regulations are defined and promotions are based on qualifications. Here are the principles guiding the Max Weber theory:

  • The hiring of staff is based on educational and technical qualifications.

  • It is the task of the manager to decide on the promotions based on achievements or experience.

  • There should be a chain of command in the organizational structure, along with a grievance reporting process for securing employee rights. 

  • Equal distribution of labour.

  • Impartial management.

  • Everything has to be kept recorded in writing.

  • The management concept and process should let the managers manage the company.  Management should not be the responsibility of the owners.

General Management Theory by Henri Fayol, the Father of Modern Management Theory

Henri Fayol, often regarded as the ‘Father of Modern Management Theory,’ created the general management theory that can be applied in every field of work and administration. In this theory, the manager’s responsibilities were categorized by Fayol on the basis of the management tasks to plan, to organize, to command, to coordinate, and to control. His 14 management principles are hereby stated.

  • Division and distribution of work aimed at reaching maximum output with the minimum effort possible.

  • Responsibilities come with authority.

  • There should be discipline amongst employees.

  • There should be a unity of command where an employee receives orders and reports to only one superior. 

  • There should be a unity of direction aimed at the fulfillment of the primary organizational goal.

  • Subordination brings up the preference for the general interest in comparison to individual interest.

  • Remuneration should be satisfying for the employees as well as the firm.

  • Centralization should be practiced within the organization along with the delegation of authority and determining managerial responsibilities.

  • The order should be kept intact with an appointed place for employees and processes. 

  • There should be a scalar chain determining the relationship between employees and their superiors. 

  • Equal treatment of employees. 

  • Stable tenure of the personnel. 

  • Managers must be bold enough to take and implement initiatives.

  • Espirit de Corps should be maintained with proper teamwork being emphasized along with sound communication.

Robert Owen’s Management Theory

Robert Owen, regarded as the Father of Personnel Management created a theory as a part of which workers were to spend fewer hours than previously prescribed, and were to be paid wages higher than before. He encouraged the creation of an organizational environment where everyone would collaborate and create with increased productivity. As a part of his management theory and practice notes, his contributions to management improved the work conditions in factories.

The famous experiments at the Hawthorne Plant by Elton Mayo and F.J. Roethlisberger also deserves a mention in this discussion on management theories. They observed that improvement in productivity in group action was dependent on factors like interrelationship between members, morale, and effective management. 

Professional management is the backbone of an organization that should be perfectly aligned with its mission, vision, and objectives. For this, the continuous development of management theories has been focused on for decades. Other contributors who introduced various approaches to management are Peter Drucker, William Ouchi, Robert Waterman, and so on.

FAQ (Frequently Asked Questions)

1. What is the difference between the theories of Max Weber and Henri Fayol?

Answer: Max Weber in his theory dealt with bureaucracy for organizations and devised 5 principles for achieving authority in a business. While on the other hand, Henri Fayol maintained the principles stated by Max Weber while adding the importance of the essential role of an informal authority along with 14 principles as a part of his management theory.

2. What are Henri Fayol’s 6 groups of industrial activities?

Answer: Henri Fayol’s 6 groups of industrial activities are:

  • Technical activities related to production

  • Commercial activities related to buying/selling

  • Financial activities ensuring proper use of the capital

  • Accounting activities

  • Security activities ensuring the safety of the business premises and organizational data

  • Managerial activities

3. What is the systems approach?

Answer: The systems approach states that a systematic framework of organizational features related to one another and dependent on each other contributes towards the fulfillment of organizational goals. Systems are either open or closed. As a part of an open system, dynamic communication with the environment is included. However, there is no influence of the environment on a system that is closed.