There are numerous management theories in the business world. Some date back to the 19th century, while most were proposed during the 20th century. Understanding and using these theories can help you guide your team toward your goals more effectively and provide a clear organizational structure.
This Atwork article will look closely at 6 of the most popular management theories, helping you decide the best model for your team.
What Are Management Theories?
Management theories consist of ideas that recommend general principles for managing organizations and businesses. They address how managers implement strategies to reach their organizational goals and inspire employees to excel in their performance.
Leaders and supervisors usually mix different management theories based on their team’s needs or goals. Therefore, it’s better to learn more than one theory. Most business management theories were created centuries ago, but they still hold up, and organizations worldwide still use them.
Types of Management Theories
Although there are numerous theories about organizational management, all of them can fit into three main categories:
Classical Management Theories
These theories focus on the rigid hierarchy of the organizations, the specialization of tasks, and financial incentives for employees.
Behavioral Management Theories
These theories study how productivity in an organization can be managed by concentrating on the things that motivate the workforce.
Modern Management Theories
These theories try to create an approach that balances scientific methodology with humanistic psychology.
Important Theories of Management
We have chosen one theory representing each category to explain and discuss. We’ll start with the classical theories, and then behavioral, and finally, we will examine modern management theories.
Scientific Management Theory
Scientific management theory was conceptualized by an American engineer called Frederick Winslow Taylor in the 20th century. At his time, The United States was at the peak of industrialization, but management methods hadn’t adapted to the new changes. While working at a steel manufacturing plant, he observed the problems that arose from mistakes in management and thus came up with the scientific management theory, aka Taylorism.
Scientific management theory is a classical management theory with three main characteristics: hierarchical structure, specialization, and financial incentives. Companies that use this management style usually have a rigid structure with the owners on top, followed by supervisors and then workers.Taylorism has four main principles:
- Using the scientific method to choose methods focusing on productivity and profits.
- Assigning workers to tasks based on their skill set.
- Monitoring workers’ performance and dealing with the issue quickly. Managers are responsible for dealing with such matters.
- Dividing work between managers and workers in such a way that managers know how to plan and train workers and workers know how to use those plans. i.e., better cooperation between managers and workers.
With these principles in mind, scientific management theory aims to increase efficiency and profits. Although this management theory is not used as widely as it used to, its primary focus points, such as increased efficiency and promoting cooperation, are still useful.
Theory X and Theory YTheory X and Theory Y are two distinct management theories introduced by Douglas McGregor in the 1960s that refer to two styles of management based on assumptions about people’s motivations.
These two theories make assumptions about people’s attitudes toward work and being motivated or not. These assumptions are as follows:
Theory X assumes that people:
· Don’t like their work and consider it a burden.
· Must be controlled, forced, and threatened to deliver work.
· Resist change and want to work the way they have always done.
· Are not inherently ambitious and indifferent to organizational goals.
· Avoid work and always need incentives to show ambition.
On the other hand, Theory Y assumes that employees:
· Like to work on and find it natural and fulfilling.
· Are committed to organizational objectives and don’t need managerial input to finish their tasks.
· Accept change and take responsibility for their work.
· Are active and self-motivated to complete their tasks.
· Show creativity and imagination and think of their own goals alongside organizational goals.
These two sets of assumptions lead to two types of managers. Theory X managers are usually authoritarian and use micromanagement. Organizations that use Theory X generally have a centralized control system with layers of managers and supervisors to direct and oversee workers.
Theory Y managers, however, typically have a participative management style and believe employees will do their work independently. Organizations that
- follow Theory Y mainly focus on meaningful careers and offer more than just money to their employees. McGregor finds this management style superior to Theory X, which reduces employees to “cogs in a machine.”
- Nowadays, most organizations and managers use a mixture of these two theories but might slightly prefer one over the other.
- Systems Management Theory
- Systems theory of management, aka. Systems Approach is a management theory proposed by Ludwig von Bertalanffy, an Austrian biologist, in the 1950s. This theory treats organizations and teams like living organisms with interrelated parts or subsystems. These subsystems each play different roles but ultimately work together to achieve a unified goal.
- There are two types of systems:
- Open systems: systems/organizations that interact with their environment and are the most common.
- Closed systems: systems/organizations that operate independently from their environments and are much rarer than open systems.
According to the system theory of management, each organizational system consists of five components:
- Environment refers to the setting in which an organization is operating. This can mean markets, relationships, countries, and other external factors influencing an organization.
- Inputs refer to the essential resources an organization needs to operate. Resources such as raw materials, workforce, information, capital, etc.
- Transformation Process refers to the process that transforms inputs into outputs. For example, an assembly line of a car company is a transformation process that turns individual parts into a functioning car.
- Outputs are an organization’s offered products or services. Their quality and price affect how an organization or company is viewed by its customers.
- Feedback refers to the information received from internal and external sources. These include customer reviews, quality control results, and financial audits.
Systems theory of management is a goal-oriented theory that promotes breaking down organizations into smaller and interrelated subsystems that must work together to achieve a goal. Additionally, this theory encourages feedback to the environment and is based on data. Unsurprisingly, this theory of management has seen an increase in usage lately.
This blog post will be updated, and all management theories will be added to it, meanwhile if you are a manager, we strongly recommend you take a look at this page: