Management theory

A collection of ideas which set forth general rules on how to manage a business or
organization. Management theory addresses how managers and supervisors relate to
their organizations in the knowledge of its goals, the implementation of effective means
to get the goals accomplished and how to motivate employees to perform to the highest
standard.
According to Bartlett and Ghoshal (1993), a ""managerial theory of the firm"" would be more
attuned to the premises of the key actors within the firm so as to be able to illuminate the
corporate world as seen by managers and encompass the issues that they perceive to be
important. The form of the firm resulting from this managerial theory is a radical departure
from the dominant M-form of the firm.

Scientific theory by Frederick Taylors

Frederick Taylor's theory of scientific management developed techniques for improving the
efficiency of the work process. Based on a systematic study of people, tasks and work
behavior, Taylor's theory broke the work process down into the smallest possible units, or
sub-tasks, in an effort to determine the most efficient method possible for completing a
particular job.
Taylor's method consisted of testing the completion of various tasks to determine the
optimal amount of work that could be accomplished within a certain time period. Taylor's
management theory asserts that organizations should identify the best way to do a job, train
workers to handle each element in a pre-determined manner (instead of basing their work
on their own personal discretion) and set up an equitable system of rewards for improved
productivity. Taylor's theory brought numerous improvements to organizational management
during a period when an autocratic management style was the norm. Some developments
that resulted from the Taylor theory of management are these:
1.Significantly improved productivity;
2. Increased employee incentive;
3. Widespread improvements in quality control;
4. Better personnel practices; and
5. Greater cooperation between management and workers with a consistent application of
Taylor s theory of management.
Administrative theory by Henri Fayols
Henri Fayol's management theory is a simple model of how management interacts with
personnel. Fayol's management theory covers concepts in a broad way, so almost any

business can apply his theory of management. Today the business community considers
Fayol's classical management theory as a relevant guide to productively managing staff.
The management theory of Henri Fayol includes 14 principles of management. From these
principles, Fayol concluded that management should interact with personnel in five basic
ways in order to control and plan production.
1. Planning. According to Fayol's theory, management must plan and schedule every part of
industrial processes.
2. Organizing. Henri Fayol argued that in addition to planning a manufacturing process,
management must also make certain all of the necessary resources (raw materials,
personnel, etc.) came together at the appropriate time of production.
3. Commanding. Henri Fayol's management theory states that management must
encourage and direct personnel activity.
4. Coordinating. According to the management theory of Henri Fayol, management must
make certain that personnel works together in a cooperative fashion.
5. Controlling. The final management activity, according to Henri Fayol, is for the manager
to evaluate and ensure that personnel follow management's commands.
Bureaucratic theory by Max Weber
The Max Weber theory of management, sometimes called bureaucratic management
theory, is built on principles outlined by Frederick Taylor in his scientific management theory.
Like Taylor, Weber advocated a system based on standardized procedures and a clear
chain of command. Weber stressed efficiency, as did Taylor, but also warned of the danger
of emphasizing technology at the expense of emotion.
One primary difference between Max Weber and management, and other theories of
management, is that while Weber outlined the principles of an ideal bureaucracy, he also
pointed out the dangers a true bureaucracy could face.
Key elements of the Max Weber management theory include:

Clearly defined job roles

A hierarchy of authority

Standardized procedures

Meticulous record-keeping

Hiring employees only if they meet the specific qualifications for a job.

Human relations theory by Elton Mayo

The human relations theory of management began development in the early 1920's during
the industrial revolution. At that time, productivity was the focus of business. Professor Elton
Mayo began his experiments (the Hawthorne Studies), to prove the importance of people
for productivity - not machines.
The human relations management theory is a researched belief that people desire to be
part of a supportive team that facilitates development and growth. Therefore, if employees
receive special attention and are encouraged to participate, they perceive their work has
significance, and they are motivated to be more productive, resulting in high quality work.
The following human relations management theory basics became evident during human
relation studies:
1. Individual attention and recognition aligns with the human relations theory.
2. Many theorists supported the motivational theory.
3. Studies supported the importance of human relations in business.

X&Y theory by Douglas McGregor's

Douglas McGregor's theory of management, often referred to as McGregor's XY theory,
remains a cutting-edge management model though more than 50 years old. The Douglas
McGregor biography describes one of the most influential management theorists as a man
whose revolutionary insights into the nature of leadership and management changed the
relationship between managers and employees, paving the way for best practices
implemented by some of today's most successful companies.
Rooted in the early industrial era, Douglas McGregor's Theory X and Theory Y contrasted
two visions of the worker. Theory X, the accepted model at the time, assumed that workers
were drones, without ambition or initiative who had to be punished and bullied by bosses to
achieve results. Drawing on newly emerging psychological principles, Douglas McGregor's
Theory Y offered a different model. Some key Theory Y principles are the following:
1. Work is as natural as play or rest.

2. Workers who are engaged and fulfilled actually enjoy their work.
3. Under the right conditions workers actively seek responsibility, take initiative and make
creative decisions.
4. Self-fulfillment is the real reward workers seek.

Systems Theory by Ludwig con Bertalanffy

General system theory, therefore, is a general science of wholeness... The

meaning of the somewhat mystical expression, The whole is more that the sum
of its parts is simply that constitutive characteristics are not explainable from
the characteristics of the isolated parts. The characteristics of the complex,
therefore, appear as new or emergent... - Ludwig von Bertalanffy
This theory was proposed in the 1940's by the biologist Ludwig von

Bertalanffy and furthered by Ross Ashby (1964). Von Bertalanffy was

reacting against both reductionism and attempting to revive the unity of
science. He is considered to be the founder and principal author of
general systems theory.
If one were to analyze current notions and fashionable catchwords, he would
find systems high on the list - Ludwig von Bertalanffy

von Bertalanffy (1968) wrote that a system is a complex of interacting

elements and that they are open to, and interact with their
environments. In addition, they can acquire qualitatively new properties
through emergence, thus they are in a continual evolution. When
referring to systems, it also generally means that they are selfregulating (they self-correct through feedback).