Definition of Management Theories
Management theories are coherent group of assumptions put forth to explain or describe the
relationship between activities/functions and the goals that organisations are strive to achieve.
Benefits of Management Theory
By studying established management theories managers may be able to find ways to achieve
organizational goals efficiently and effectively.
Classical Management Theories
1. Scientific management theory
In the late 1800s, Frederick Taylor was one of the first to take a scientific approach
to management theory in terms of how to maximize productivity. His principles suggested that
the scientific method should be used to perform workplace tasks, rather than a system that relied
upon team members’ judgement or personal discretion. Taylor theorized that by simplifying
tasks, training team members thoroughly and encouraging cooperation between supervisors and
employees, productivity could be increased.
2. Administrative management theory
This 19th-century theory was developed by mining engineer and senior executive Henri Fayol,
who believed that managers should utilize a specific set of values to get the most out of their
workforce.
Fayol outlined 14 principles for managers to use to organize and interact with their teams:
Division of work: Delegating responsibilities of a project to different team members
allows them to focus on one specialized task, instead of dividing their attention across
many.
Authority and responsibility: A balance between authority, or the right to make
management decisions, and the employee’s responsibility over their tasks should exist
to obtain the best results.
Unity of command: This principle asserts that employees receive direction from a single
supervisor to avoid conflicting requests and to maintain hierarchy.
Unity of direction: This principle ensures that employees working on the same project
are working toward the same objectives. Departmental managers are responsible for
coordinating and communicating clear directions to their teams.
Equity: The equity principle was meant to cultivate an environment where everyone is
treated equally and with kindness.
Order: This principle ensures that things run smoothly, by pairing the right person with
the right job, improving the working atmosphere and boosting productivity.
, Discipline: This principle encourages order within the organization, and outlines rules
that the workforce should follow. It also encompasses managers showing disciplined
behavior and leading by example.
Initiative: This principle allows for employees to develop and launch initiatives that
inspire them, as long as they do not conflict with organizational rules or values.
Remuneration: This refers to fair remuneration, or payment, for employees, promoting
productivity and loyalty. It can also encompass the value employers feel that they are
getting from their workforce.
Stability: The stability principle asserts that employees must feel they have job security
to function efficiently, which will encourage them to stay at the company longer and be
more productive. This includes being given time to adjust to their positions, not being
moved between teams too frequently and being able to develop their work rhythms.
Scalar chain: This ensures that employees know who to contact to communicate up the
management chain and establishes company hierarchy.
Subordination of interest: Harmony must exist throughout an organization. Managers
should prioritize the interests of the organization as a whole over any one individual’s
needs.
Esprit de corps: This phrase expresses a feeling of pride. Managers should look for
ways to encourage teamwork, generate enthusiasm among their teammates and direct
reports, and reward outstanding performance to make this feeling grow.
Centralization and decentralization: Centralization typically has a select few making
decisions for the many, often at the highest levels of leadership. Decentralization is
when decisions are made by an organization as a whole. According to Fayol’s
philosophy, an effective organization delegates the ability to make decisions to
different employees, thereby maintaining balancing centralization and decentralization.
3. Bureaucratic management theory
In creating his bureaucratic management theory, German sociologist Max Weber thought that the
ideal business structure was based on a hierarchy with a clear chain of command. He also
believed this structure should feature:
A clear division of labor with specialized employees for each task.
A hierarchal structure where clear communication, delegation and responsibility are
prioritized.
Worker selection based on education, their experience and their technical skill alone.
Consistent regulations and rules where everyone know what is expected of them and their
work.
Impersonal working relationships, so favoritism, nepotism or outside forces cannot
influence decision making.
Management theories are coherent group of assumptions put forth to explain or describe the
relationship between activities/functions and the goals that organisations are strive to achieve.
Benefits of Management Theory
By studying established management theories managers may be able to find ways to achieve
organizational goals efficiently and effectively.
Classical Management Theories
1. Scientific management theory
In the late 1800s, Frederick Taylor was one of the first to take a scientific approach
to management theory in terms of how to maximize productivity. His principles suggested that
the scientific method should be used to perform workplace tasks, rather than a system that relied
upon team members’ judgement or personal discretion. Taylor theorized that by simplifying
tasks, training team members thoroughly and encouraging cooperation between supervisors and
employees, productivity could be increased.
2. Administrative management theory
This 19th-century theory was developed by mining engineer and senior executive Henri Fayol,
who believed that managers should utilize a specific set of values to get the most out of their
workforce.
Fayol outlined 14 principles for managers to use to organize and interact with their teams:
Division of work: Delegating responsibilities of a project to different team members
allows them to focus on one specialized task, instead of dividing their attention across
many.
Authority and responsibility: A balance between authority, or the right to make
management decisions, and the employee’s responsibility over their tasks should exist
to obtain the best results.
Unity of command: This principle asserts that employees receive direction from a single
supervisor to avoid conflicting requests and to maintain hierarchy.
Unity of direction: This principle ensures that employees working on the same project
are working toward the same objectives. Departmental managers are responsible for
coordinating and communicating clear directions to their teams.
Equity: The equity principle was meant to cultivate an environment where everyone is
treated equally and with kindness.
Order: This principle ensures that things run smoothly, by pairing the right person with
the right job, improving the working atmosphere and boosting productivity.
, Discipline: This principle encourages order within the organization, and outlines rules
that the workforce should follow. It also encompasses managers showing disciplined
behavior and leading by example.
Initiative: This principle allows for employees to develop and launch initiatives that
inspire them, as long as they do not conflict with organizational rules or values.
Remuneration: This refers to fair remuneration, or payment, for employees, promoting
productivity and loyalty. It can also encompass the value employers feel that they are
getting from their workforce.
Stability: The stability principle asserts that employees must feel they have job security
to function efficiently, which will encourage them to stay at the company longer and be
more productive. This includes being given time to adjust to their positions, not being
moved between teams too frequently and being able to develop their work rhythms.
Scalar chain: This ensures that employees know who to contact to communicate up the
management chain and establishes company hierarchy.
Subordination of interest: Harmony must exist throughout an organization. Managers
should prioritize the interests of the organization as a whole over any one individual’s
needs.
Esprit de corps: This phrase expresses a feeling of pride. Managers should look for
ways to encourage teamwork, generate enthusiasm among their teammates and direct
reports, and reward outstanding performance to make this feeling grow.
Centralization and decentralization: Centralization typically has a select few making
decisions for the many, often at the highest levels of leadership. Decentralization is
when decisions are made by an organization as a whole. According to Fayol’s
philosophy, an effective organization delegates the ability to make decisions to
different employees, thereby maintaining balancing centralization and decentralization.
3. Bureaucratic management theory
In creating his bureaucratic management theory, German sociologist Max Weber thought that the
ideal business structure was based on a hierarchy with a clear chain of command. He also
believed this structure should feature:
A clear division of labor with specialized employees for each task.
A hierarchal structure where clear communication, delegation and responsibility are
prioritized.
Worker selection based on education, their experience and their technical skill alone.
Consistent regulations and rules where everyone know what is expected of them and their
work.
Impersonal working relationships, so favoritism, nepotism or outside forces cannot
influence decision making.
