Management theories are the recommended management strategies that enable us to better understand and approach management. Many management frameworks and guidelines were developed during the last four decades.
Management theories are the set of general rules that guide the managers to manage an organization. Management theories (also known as "Transactional theories") focus on the role of supervision, organization, and group performance. Theories are an explanation to assist employees to effectively relate to the business goals and implement effective means to achieve the same. In this article, we will discuss the historical context of management, diverse views on management, and finally the theories of management.
Early management theories base leadership on a system of reward and punishment. Managerial theories are often used in business; when employees are successful, they are rewarded; when they fail, they are reprimanded or punished.
Management theories can be classified into three types.
These management theories are explained below:
Classical management theory is based on the belief that workers only have physical and economic needs and prescribes specialization of labor. Classical theories recommend centralized leadership and decision-making and focus on profit maximization. Three streams of classical management theory are - Bureaucracy (Weber), Administrative Theory (Fayol), and Scientific Management (Taylor).
The behavioral management theory is focused on the human aspects of work. They are also often referred to as the human relations movement. These theories aspire to gain a better understanding of human behavior at work to improve productivity. It focuses on behavioral aspects like motivation, conflict, expectations, and group dynamics.
Modern management theory emphasizes the use of systematic mathematical techniques to analyze and understand the inter-relationship of management and workers in all aspects. Three streams of modern management theories are - Quantitative Approach, System Approach, and Contingency Approach.
There are four general management theories.
Taylor’s theory of scientific management aimed at, improving economic efficiency, especially labor productivity. Taylor had a simple view about, what motivated people at work, - money. He felt that workers should get a fair day's pay for a fair day's work, and that pay should be linked to the amount produced. Therefore he introduced the differential piece rate system, of paying wages to the workers.
Four Principles of Scientific Management are:
Henri Fayol known as the Father of Management laid down the 14 principles of Management. These 14 principles of management are used to manage an organization and are beneficial for prediction, planning, decision-making, organization and process management, control, and coordination.
Weber made a distinction between authority and power. Weber believed that power educes obedience through force or the threat of force which induces individuals to adhere to regulations. According to Max Weber, there are three types of power in an organization:-
Features of Bureaucracy:
Elton Mayo's experiments showed an increase in worker productivity was produced by the psychological stimulus of being singled out, involved, and made to feel important. Hawthorne Effect can be summarized as “Employees will respond positively to any novel change in a work environment like better illumination, clean work stations, relocating workstations, etc. Employees are more productive because they know they are being studied.
Relationship theories (also known as "Transformational theories") focus upon the connections formed between leaders and followers. These leaders motivate and inspire people by helping group members see the importance and utility of the task. Transformational leaders are focused on the performance of group members, but also want each person to fulfill his/her potential. These leaders often have high ethical and moral standards.
There are different thoughts on management. According to one school of thought, history is of no relevance to the real problems faced by modern world managers in today's dynamic environment. However, both management theory and its history are indispensable tools for managing complex digitally-enabled organizations in a modern context.
The following three forces had a major influence on the concept and evolution of management theories.
Social forces are the norms and values that characterize a culture. Early social forces allowed workers to be treated poorly. However, more recent social forces have provided for more acceptable working conditions for the workforce. Social forces have greatly influenced the management thought in the areas of motivation and leadership.
Economic factors have influenced the way businesses developed and designed their organizational structures, workforce, etc. Examples of these economic forces are Ideas like a market economy, public enterprise, and private ownership of property, economic freedom, competitive markets, and globalization.
Political forces such as governmental regulations play a significant role in how organizations choose to manage themselves. Government actions and political realities often influence the success and failure of a business and most of the time political factors that affect a business are often completely out of the company's control. Political forces have influenced management theory in the areas of environmental analysis, planning, control, and organizational design and employee rights.
Leadership has been defined in different ways by different sets of scholars. In very simple terms leadership can be defined as the skill of a person to influence an individual or a group for achievement of a goal in a given situation. One can use different dimensions and perspectives to define leadership. Through the evolution of leadership thought, leadership has been defined in various ways discussed here.
Emergent leadership occurs when a group member is not appointed or elected as leader, but rather that person steps up as the leader over time within-group interactions. Have you ever faced challenges in getting accepted into your new role of position as a leader? Groups don't automatically accept a new "boss" as a leader. Emergent leadership is what you must do when taking over a new group. Learn more about emergent leadership.
Management theories are the recommended management strategies that enable us to better understand and approach management. Many management frameworks and guidelines were developed during the last four decades.
Hawthorne Studies - Leadership
The Hawthorne studies were conducted on workers at the Hawthorne plant of the Western Electric Company by Elton Mayo and Fritz Roethlisberger in the 1920s. This study established the behavioral change that happened due to an awareness of being observed, resulting in active compliance with the supposed wishes of researchers, because of special attention received, or positive response to the stimulus being introduced.
Theory Z also called the "Japanese Management" style is a leadership theory of human motivation focused on organizational behavior, communication, and development. It assumes that employees want to enter into long term partnerships with their employers and peers. Offering stable jobs with an associated focus on the well-being of employees results in increased employee loyalty to the company.
The development of teams is an ongoing process because the composition of the team may keep on changing. The new members may join and the old members may leave the team. The team members pass through several stages for the development of the team and there has been a lot of research to identify these stages. In this article, we discuss the common theories of team development.
In its simplest sense, decision-making is the act of choosing between two or more courses of action. Decision making is a key skill in the workplace and is particularly important if you want to be an effective leader. When decisions have to be made, there are several stages that you should go through to reach a practical solution. Understand the meaning and importance of decision making and how to look at it as a process.
McClelland's Theory of Needs is a human motivation theory which states that an individual's specific needs are acquired over time through our culture and life experiences. As per the three needs theory, these acquired needs significantly influence the behavior of an individual. The three main driving motivators are the needs for achievement, affiliation, and power.
Teams are part of the modern organizational culture. Whether you are a team leader or a team member, having a better understanding of how teams work, and being able to identify where the team is in the process, is a critical part of ensuring the team is ultimately successful. Start with the basics and understand what a team is and what role they play in an organization.
Team Foundation in Forming Stage
This is the first stage of team development. This is the stage when the foundation of the team is laid. During the Forming stage, team members have a high dependence on their leader for guidance. Learn the practical strategies you can use during this stage to help your team develop into a highly effective performing team.
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