Understanding and adopting the best practices from workplace leadership management theories will help you guide your team to success more effectively. Many of these theories gave rise to the leadership approaches that are now commonly used to lead and grow organizations, and you can pick and choose from them to identify the strategies that will work best for you and your team.
In this post, we’ll go over the most common management theories and give you some pointers on how to use them in the workplace.
What are Management Theories?
Management theories are ideas on preferred management practices, which may include tools like frameworks and standards that can be used in modern businesses. Professionals will generally not rely only on one management theory, but will instead introduce elements from other management theories that best suit their workforce and company culture.
Why Research Management Theories?
#1. Boosting Productivity
Managers should be interested in mastering management theories because it helps them maximize their productivity. Ideally, the theories teach leaders how to maximize the people’s resources at their disposal. Rather than investing in new equipment or a new marketing plan, business owners should invest in their personnel through training.
Taylor’s scientific management philosophy exemplifies this. As previously said, Taylor recommended that the greatest strategy to increase worker productivity was to first observe their work processes and then develop the finest regulations.
#2. Making Decisions More Simple
The decision-making process is another area where management theories have proven effective. According to Max Weber, hierarchical systems promote informed decision-making.
According to a paper prepared by the Institute for Employment Studies, flattening the hierarchy allows for local innovation while also speeding up decision-making. Flattening out means removing job titles and senior roles in order to foster a more unified work atmosphere.
#3. Increasing Employee Participation
Management theories emerged in the 1900s with the goal of fostering interpersonal interactions in the workplace. The human relations approach is one such philosophy that promoted a collaborative atmosphere. According to this view, business owners should delegate greater decision-making authority to their employees.
Benefits of Management Theories
Leaders should learn and apply proven management theories in the workplace for a variety of reasons, including:
- Increased productivity: By employing these theories, leaders can learn how to get the most out of their team members, enhancing performance and increasing production.
- Management theories provide leaders with techniques to speed up the decision-making process, allowing such leaders to be more effective in their responsibilities.
- Increased collaboration: Leaders learn ways to encourage team member participation and increase group collaboration.
- Management theories empower leaders to make scientifically verified adjustments rather than relying on their own opinion.
Where Did Management Theories Come From?
The Industrial Revolution and mass manufacturing introduced new requirements for managing people and systems. As businesses grew in size and production, owners increasingly needed managers to run their day-to-day operations. Prior to the Industrial Revolution, only a few organizations and the military needed management theories. As the industry grew, management practice became a major theoretical topic in the study of business.
What are the Different Types of Management Theories?
Modern company methods have included several management theories. Classical Management Theory, Behavioral Management Theory, and Modern Management Theory are the three main categories into which management theories can be divided. These classifications mark a different stage in the growth of management theories. Each of these classes has several sub-theories.
Classical Management Theory focuses on execution and production maximization. Behavioral Management Theory emphasizes human factors and views the workplace as a social environment. Modern Management Theory extends the preceding two theories by combining current scientific methods and systems thinking.
Management Theories That Every Small Business Should Know
#1. Systems Theory
Systems Theory (or The Systems Approach) had nothing to do with business management when it was first developed, and everything to do with biology. That’s because general systems theory (GST) was created by biologist Ludwig von Bertalanffy (1901-1972) in an attempt to reject reductionism and restore scientific unity.
The basic concept of general systems theory is that a system is made up of interacting pieces that are influenced by their surroundings. The system as a whole can grow (acquire new properties) and self-regulate (correct itself) as a result of this interaction.
When it comes to business, experts abbreviate “general systems theory” to simply Systems Theory. In reality, Systems Theory is more of a point of view than a completely formed discipline. Systems Theory encourages you to recognize that your company is a system regulated by the same principles and behaviors that govern all biological organizations.
This introduces concepts such as:
- Entropy – The tendency of a system to degrade and die (something to avoid in business).
- Synergy – When parts work together, they can produce something bigger than the parts could achieve on their own.
- Subsystem – The whole (your company) is constructed on subsystems, which are built on even more subsystems.
Systems Theory can be used in conjunction with the other management theories on this list because it is a way of looking at your firm rather than a specific management process.
#2. Principles of Administrative Management
Henri Fayol (1841-1925), a miner and engineer, created his administrative management ideas as a top-down strategy for assessing a corporation. He put himself in the shoes of his manager and considered the situations they would face when dealing with their team.
As a result, he determined that his managers, and indeed management in general, had six obligations when it came to personnel management:
- Organize
- Command
- Control
- Coordinate
- Plan
- Forecast
With these obligations in mind, Fayol created 14 administrative principles that impact how managers lead their teams. Many of today’s most successful firms are built on these ideas, which vary from the need of keeping a clean facility to the value of innovation and teamwork.
#3. Bureaucratic Management Theory
Max Weber (1864-1920) developed his bureaucratic management theory from a more sociological standpoint. Weber’s theories center on the significance of organizing your firm in a hierarchical structure with clear rules and functions.
Weber defines the ideal company organization (or bureaucratic system) as:
- A distinct division of labor
- Separation of personal and organizational assets of the owner
- The command structure is hierarchical.
- Keeping accurate records
- Hiring and promotion should be based on qualifications and performance rather than personal relationships.
- Regulations that are consistent
Many people today regard bureaucratic management as an impersonal style that can become bogged down by rules and regulations. However, it can be extremely beneficial for new businesses in need of standards, procedures, and structure.
#4. Scientific Management Theories
Frederick Taylor (1856-1915) conducted controlled tests toward the close of the nineteenth century to maximize the output of his workforce. The findings of these trials led him to believe that the scientific method, rather than judgment or discretion, is the strongest predictor of workplace productivity.
Standardization, specialization, ability-based assignment, and extensive training and supervision are all promoted by Scientific Management. Only by following these techniques can a company achieve efficiency and production. This management paradigm seeks the most efficient way to perform a particular work, frequently at the expense of the employees’ humanity.
The scientific management theories as a whole are no longer widely applied, but aspects of it — workplace efficiency, training, and cooperation — are the foundation of some of the world’s most successful organizations.
#5. X and Y Theories
Douglas McGregor (1906-1964), a social psychologist, authored The Human Side Of Enterprise in 1960. He outlined two dramatically different management techniques (theories X and Y) in it. Each management style is influenced by the manager’s perceptions of their employees’ motivations.
According to Theory X, employees are apathetic or detest their jobs. Managers that follow Theory X are frequently dictatorial and will micromanage everything since they lack trust in their people.
Employees, according to Theory Y, are self-motivated, responsible, and desire to take ownership of their job. Managers that follow Theory Y include their employees in decision-making and promote creativity at all levels.
In practice, small businesses tend to follow Theory Y, while large businesses follow Theory X.
#7. Human Relations Theory
Elton Mayo (1880-1949), a psychologist, was tasked with increasing productivity among dissatisfied employees in the first quarter of the twentieth century. Mayo aimed to boost worker satisfaction by modifying environmental factors like as lighting, temperature, and break time. All of these changes were beneficial.
Mayo then experimented with adjusting variables that he believed would have a detrimental impact on satisfaction, such as workday length and quotas (which he raised). He discovered that regardless of the change — good or poor — worker satisfaction improved.
This led Mayo to believe that performance was a product of the researcher’s attention to the workers. In other words, the attention made the employees feel important.
These findings gave rise to Mayo’s Human Relations Theory, which claims that social variables, such as personal attention or being part of a group, motivate employees more than environmental factors, such as money and working conditions.
#7. Classical Management Theories
Classical management theories are based on the assumption that employees have just physical demands. The theory focuses entirely on the economics of organizing workers because employees may satisfy these bodily wants with money.
Classical management theories ignore the personal and social demands that influence employees’ job happiness as a result of this narrow view of the workforce. As a result, classical management theories promotes the following seven essential principles:
- Profits Maximization
- Specialization in the workplace
- Leadership that is central
- Operations have been streamlined.
- The emphasis is on production.
- Decisions are made by a single individual or a small group of people.
- Priority is given to the bottom line.
When these seven criteria are followed, they result in an “ideal” workplace with a hierarchical structure, employee specialization, and financial rewards.
Control of the company is held by a small group of people who have complete authority over the organization’s choices and direction. Middle managers regulate the day-to-day activities of personnel at the bottom of the pecking order beneath those select few.
And it all revolves around the idea that if employees are paid in larger and larger increments (through salary or benefits), they would work harder and be more productive.
While this may not appear to be an “ideal” management theory by today’s standards, it did work well for many years prior to the early twentieth century. And, while the system isn’t as widely used as it once was, there are several strong points that managers can use in the twenty-first century. They are as follows:
- A distinct management structure
- Labor division
- Employee roles must be clearly defined.
These three concepts, when paired with the other management theories on this list, have the potential to improve the way your employees — and your organization — operate in the current day.
#8. Contingency Management
Contingency Management Theory was developed in the 1950s and 1960s by Fred Fiedler and others. Fiedler’s theories were based on the premise that effective leadership was closely tied to the attributes demonstrated by the leader in any given situation.
From that concept sprang the view that there is a set of attributes that are effective in every context and that different situations necessitate different leadership traits. As a result, leaders must be adaptable and adjust to changes in the market, business, and team.
Fiedler then expanded that concept from a management-focused individual to a much broader organizational-focused approach. According to Fiedler’s idea, there is no single management technique that is appropriate for every situation and organization.
Instead, three broad factors influence business management and structure. They are as follows:
- The organization’s size
- The technique used
- All levels of the organization’s leadership
That means that an individual manager who believes in Contingency Management Theory must be able to identify the appropriate management style for any given situation. They must also be willing and capable of promptly and efficiently implementing such management style as necessary.
In a broader sense, firms and managers who purposefully or unwittingly adhere to Contingency Management Theory will be concerned, above all, with preserving team alignment and establishing a good fit in all projects and scenarios.
Finally, there is no single best way to do things, according to Contingency Management Theory. The way a company organizes itself will be determined by the environment in which it operates.
#9. Modern Management
As a direct response to Classical Management Theory, Modern Management Theory evolved. Modern organizations must navigate rapid change and difficulties that appear to increase dramatically overnight. Technology is both the source of and the answer to this quandary.
As a result, firms that implement Modern Management Theory attempt to integrate technology and, to some extent, mathematical analysis with the human and traditional parts of their company.
This confluence of scientific and social elements results in a two-pronged approach to management, organization, and decision-making. Modern Management Theory emphasizes the following:
- Analyzing and comprehending the connection between managers and employees through the use of quantitative techniques.
- Employees do not labor solely for monetary gain (in contrast to Classical Management Theory). Instead, they strive for happiness, fulfillment, and a desirable lifestyle.
- People are complex, according to modern management theory. Their requirements change over time, and they have a variety of talents and skills that the company can develop through on-the-job training and other initiatives.
Simultaneously, management can use mathematical techniques like statistical, cost, revenue, and return-on-investment (ROI) analysis to make rational, emotion-free decisions.
Though Modern Management Theory is not perfect in and of itself, it does, like Classical Management Theory, provide some useful points that you can combine with other theories to create a structure that is tailored to your business.
#10. Quantitative Management
Quantitative Management Theory is a branch of Modern Management Theory that emerged in response to administrative inefficiency during World War II.
The theory brings together professionals from several scientific areas to address military staffing, material, logistical, and systems concerns. The straightforward, numbers-oriented approach to management (which also applies to business) aided decision-makers in calculating the risks, advantages, and downsides of various options.
This shift toward pure logic, science, and math is balanced by the assumption that mathematical conclusions should be utilized to supplement, rather than replace, experienced managerial judgment.
#11. Organizations as Learning Systems
When compared to many of the other theories on this list, Organizations As Learning Systems Management Theory is relatively new. Organizations As Learning Systems Management Theory, sometimes known as Integral or Holistic Management Theory, arose as a postmodern alternative to many of the older management theories still in use today.
It begins with the notion that the business is a system composed of a series of subsystems. To ensure that the business runs smoothly and efficiently, each subsystem must not only function smoothly and efficiently within itself but also with the subsystems around it.
Managers, according to this view, are responsible for managing the cooperation required to guarantee the broader “organism” continues to function successfully.
This paradigm emphasizes learning and change, and learning is promoted and made available to everyone – not just middle and senior management. This idea places a premium on collaboration, participation, knowledge exchange, and individual empowerment.
How To Implement the Management Theories in the Workplace
Here are some pointers to assist you in implementing the finest practices from these management theories in your workplace:
#1. Invest in employee education.
Employee productivity can be increased by studying work processes and then developing regulations that promote optimal practices, as Frederick Taylor proposed in his scientific management theory. Invest in staff training to help them be more effective in their individual roles. In general, such training increases their productivity and overall on-the-job performance.
Human relations theory can also have an impact on productivity since the attention you offer team members and your interest in their performance can boost their productivity.
#2. Give employees decision-making authority.
Encourage interpersonal ties and create a collaborative environment by following the lead of human relations theory. Give your team members more decision-making authority. This could include providing employees more authority in their roles or allowing them to contribute more to departmental goals and initiatives. Consider forming sub-groups inside your department and giving those teams more decision-making power in order to achieve organizational goals.
#3. Reduce the organizational hierarchy’s complexity.
According to research, flattening the hierarchy can promote local innovation and speed up decision-making. This could imply removing titles or senior roles in order to foster a unified, collaborative work atmosphere. It might also mean giving team leaders more decision-making authority and eliminating the requirement to go all the way up the chain of command to get approval on decisions.
#4. Recognize the distinction between theory and practice.
Several management theories have withstood the test of time because they are effective and insightful when applied correctly. Understanding different management theories is essential for business executives who want to get the most out of their employees.
Understanding a theory is one thing; putting it into practice needs trial and error. It is critical to listen to your employees as you traverse management theories and leadership styles. Employee happiness, engagement, and productivity are ultimately the most important aspects of your company’s success.
Conclusion
Companies have implemented several management theories throughout history. They have not only helped to raise productivity, but they have also improved service quality. Although these management theories were developed many years ago, they still aid in the creation of interconnected work environments in which employees and employers collaborate. Systems theory, contingency theory, Theory X and Theory Y, and scientific management theory are some of the most common management theories used today.
- WORK MOTIVATION: Theory and Free Quotes
- STAKEHOLDER THEORY: Definition, Benefits, and Challenges
- LEADERSHIP THEORIES: What Every Leader Needs To Know
- Yield Curve Theories: Understanding the Yield Curve Theories
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