Structures are what create and maintain organizations, and structures have their roots in management theories. Although management theories date back to the 18th century, they are still the bedrock of modern principles that guide decisions in the present world. Management theories provide frameworks and concepts that guide organizations and managers to effectively manage their resources and achieve their goals. There may be diverse theories of management under the category of change, business, classical, and scientific management theories. Each of them has its criticism, however, they evidently play vital roles in the sustainability of a business. What are the renowned or important theories of management and how do they relate to workplace activities? Let’s find out!
Concept of Management Theories
Generally, management theories serve as a foundation for understanding management practices and provide guidance for managers to make informed decisions. However, it’s important to note that no single theory can fully capture the complexities of management, and managers often integrate elements from different theories to suit their specific needs and organizational contexts.
The concept of management theories refers to the development as well as the application of various frameworks, models, and concepts that aim to explain and guide the practice of management in organizations. Management theories provide a systematic understanding of how organizations operate and also of how managers can effectively achieve their goals.
Management theories can be categorized into different schools of thought, each with its own set of assumptions and principles. The following are some of the prominent management theories in practice today
#1. Classical Management Theories
The classical management theories emerged during the late 19th and early 20th centuries and generally include scientific management and administrative management. They focus on improving efficiency, organizational structure, and managerial processes.
#2. Behavioral Management Theories
These theories shifted the focus from tasks to people within organizations. They emphasize the impact of human behavior, motivation, and group dynamics on productivity and performance. The human relations theory is an example of this approach.
#3. Quantitative Management Theories
These theories incorporate mathematical and statistical models to aid decision-making and problem-solving. Operations research and management science are examples of quantitative management approaches.
#4. Systems Management Theories
These theories view organizations as complex systems with interrelated components. They emphasize the need to consider the organization as a whole and understand the interactions and relationships between different elements.
#5. Contingency Management Theories
These theories propose that management practices and strategies should be contingent upon the specific situation or context. They highlight the importance of adapting management approaches to fit the unique circumstances of an organization.
#6. Quality Management Theories
These theories focus on achieving high-quality products and services by emphasizing continuous improvement, customer satisfaction, and employee involvement. Total Quality Management (TQM) is an example of this approach.
#7. Modern Management Theories
These theories have emerged in response to the complexities and challenges of the modern business environment. They include concepts such as strategic management, knowledge management, and leadership theories like transformational and servant leadership.
Scientific Theories of Management
Scientific theories of management, also known as scientific management or Taylorism, are based on the principles of efficiency, standardization, and systematic approaches to work. It was developed by Frederick Taylor in the early 20th century. The theory approach focuses on the systematic study of work processes to improve efficiency and productivity. It also aims to achieve greater efficiency and productivity by applying scientific methods to work processes. It had a significant impact on industrial practices, particularly in manufacturing industries, by introducing systematic analysis and optimization of work tasks. However, scientific management theories also faced criticism for focusing on task efficiency at the expense of worker well-being and creativity.
Over time, other management theories and approaches emerged to address these limitations and provide a more holistic perspective on managing organizations and employees. There are concepts and theorists associated with scientific management theories some of these are as follows;
#1. Managerial Control
The first concept on our list of concepts of scientific management theories is managerial control. Scientific management emphasizes strong managerial control and supervision. Managers are responsible for planning, organizing, and controlling work processes to ensure that tasks are performed efficiently and in line with established standards.
#2. Time and Motion Studies
Taylor conducted time and motion studies to analyze and standardize work processes. These studies involved breaking down tasks into smaller elements and determining the most efficient way to perform each element. The goal was to eliminate unnecessary movements and reduce wasted time.
#3. Work Specialization
Scientific management advocates for dividing work into specialized tasks. Each worker is assigned a specific task that they specialize in, which allows them to become highly skilled and efficient in that particular area.
#3. Division of Labor
Scientific management emphasizes the division of labor, where work is divided among different individuals or groups based on their skills and expertise. This division enables specialization and increases efficiency.
#4. Standardization
Scientific management promotes the establishment of standard methods and procedures for performing tasks. By standardizing work processes, organizations can achieve consistency, reduce errors, and improve efficiency.
#5. Incentive Systems
Taylor believed in providing financial incentives to motivate workers and increase their productivity. He introduced the concept of piece-rate pay, where workers are paid based on the number of units they produce or tasks they complete.
#6. Selecting and Training Workers
Scientific management emphasizes selecting and training workers based on their abilities and aptitudes for specific tasks. This ensures that individuals are matched with jobs they are best suited for, leading to increased productivity.
#7. Managerial Control
Scientific management emphasizes strong managerial control and supervision. Managers are responsible for planning, organizing, and controlling work processes to ensure that tasks are performed efficiently and in line with established standards.
Theories of Management of Change
Theories of management of change provide frameworks and insights on how to effectively navigate and implement organizational change. These theories provide different perspectives and approaches to managing organizational change. It’s important to choose and adapt the most appropriate theory or combination of theories based on the specific context, the nature of the change, and the organization’s culture and needs. The following are some prominent theories of change management:
#1. Lewin’s Change Management Model
The first on our list of change management theories is Lewin’s change management model. It was developed by Kurt Lewin, and it consists of three stages: unfreezing, changing, and refreezing. While unfreezing involves creating the motivation for change, changing involves implementing the new desired state, and refreezing involves stabilizing the change to make it the new norm.
#2. Kotter’s 8-Step Change Model
John Kotter’s model is next on our list of change management theories. This theory emphasizes the importance of a structured approach to change. It also involves creating a sense of urgency, building a guiding coalition, developing a vision and strategy, communicating the change vision, empowering employees, generating short-term wins, consolidating gains, and anchoring the change in the organizational culture.
#3. McKinsey 7-S Framework:
Third on our list is the McKinsey 7-S framework. This framework, developed by Tom Peters and Robert Waterman and focuses on seven interconnected elements that need to be aligned for successful change: strategy, structure, systems, shared values, skills, style, and staff. It also highlights the interdependencies between these elements and the need for holistic change management.
#4. ADKAR Model
The ADKAR model, created by Prosci is next on our list. This is one of the change management theories that provide a structured approach to individual change management. It also focuses on five key elements: awareness of the need for change, desire to support the change, knowledge of how to change, ability to implement the change, and reinforcement to sustain the change.
#5. Satir Change Model
Developed by Virginia Satir, this model emphasizes the emotional aspects of change. It describes a predictable pattern of responses to change, including a status quo, chaos, integration, and a new status quo. It highlights the need for managing emotions and promoting positive communication during the change process.
#6. Appreciative Inquiry
Appreciative Inquiry focuses on identifying and amplifying the positive aspects of an organization to drive change. It involves asking positive, strengths-based questions to envision and create a desired future state.
#7. The Kübler-Ross Change Curve
Inspired by Elisabeth Kübler-Ross’s work on grief, this model describes the emotional stages individuals may go through during the change process. It includes stages such as denial, resistance, exploration, and commitment. Understanding these emotional stages can help managers support employees through the change journey.
Business Theories of Management
There are several business theories of management that provide insights and frameworks for effectively managing organizations. These business theories of management offer valuable perspectives and frameworks for understanding and managing various aspects of organizational dynamics, strategy formulation, competitive advantage, and decision-making. Managers can apply these theories to analyze their specific business contexts and make informed choices to drive success and sustainability. The following are some prominent business theories of management:
#1. Porter’s Five Forces
The first on our list of businesses theories of management is Porter’s Five Forces. Developed by Michael Porter, this theory focuses on analyzing the competitive forces within an industry. It identifies five key forces – the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products or services, and competitive rivalry – that shape the competitive landscape and profitability of an industry. Managers can use this theory to understand the industry dynamics and formulate competitive strategies.
#2. SWOT Analysis
SWOT analysis is a framework for assessing an organization’s strengths, weaknesses, opportunities, and threats. It helps managers identify internal strengths and weaknesses and external opportunities and threats, enabling them to develop strategies that leverage strengths, overcome weaknesses, capitalize on opportunities, and mitigate threats.
#2. PESTEL Analysis
PESTEL analysis examines the external macro-environmental factors that can impact an organization. It stands for Political, Economic, Social, Technological, Environmental, and Legal factors. By considering these factors, managers can gain insights into the broader business environment and make informed decisions regarding strategy, resource allocation, and risk management.
#3. Value Chain Analysis
Value chain analysis examines the activities and processes within an organization to identify sources of competitive advantage. It helps managers understand how value is created, delivered, and captured in a business, enabling them to optimize operations, identify areas for cost reduction or differentiation, and improve the overall value proposition.
#4. Balanced Scorecard:
The balanced scorecard is a performance measurement framework that goes beyond financial metrics to assess multiple dimensions of organizational performance. It includes four perspectives: financial, customer, internal processes, and learning and growth. Managers can use the balanced scorecard to align strategic objectives, track performance, and make data-driven decisions.
#5. Resource-Based View
The resource-based view (RBV) focuses on identifying and leveraging an organization’s unique resources and capabilities to gain a competitive advantage. It emphasizes the importance of valuable, rare, inimitable, and non-substitutable resources and how they can contribute to sustainable competitive advantage.
#6. Transaction Cost Economics:
Transaction cost economics (TCE) examines the costs and benefits associated with different forms of organizing economic transactions. It helps managers understand when it is more efficient to undertake transactions within the organization (make) or through external parties (buy). TCE provides insights into decisions related to outsourcing, vertical integration, and supplier relationships.
#7. Game Theory
The last on our list of business theories of management is game theory. Game theory studies the strategic interactions between different players in a competitive situation. It helps managers understand the behavior of competitors, anticipate their moves, and make decisions based on an understanding of the underlying strategic dynamics.
Classical Management Theory
Classical management theory, also known as classical organization theory, refers to a set of management principles and practices developed during the late 19th and early 20th centuries. This theory focuses on increasing efficiency, productivity, and organizational performance through systematic approaches and standardized processes. Classical management theory had a significant impact on the field of management and provided foundational principles for organizing and managing work. However, it has also faced criticism for its mechanistic approach, overlooking the human aspect of organizations, and assuming that workers are primarily motivated by financial incentives. As a result, later management theories emerged to address these limitations and take a more holistic view of organizations and their employees. There are three main branches within classical management theory as highlighted below;
#1. Scientific Management (Taylorism)
Scientific management was developed by Frederick Taylor. It aims to increase productivity by applying scientific methods to analyze and optimize work processes. Key principles of scientific management include time and motion studies, work specialization, standardization of tools and procedures, and the use of financial incentives to motivate workers.
#2. Administrative Management (Fayolism)
Administrative management was proposed by Henri Fayol. It focuses on the overall management process and provides general principles for organizing and managing organizations. Key principles of administrative management include unity of command, scalar chain (hierarchy), division of work, coordination, and centralization.
#3. Bureaucratic Management (Weberian Bureaucracy)
Bureaucratic management was introduced by Max Weber. It emphasizes the importance of a well-defined hierarchy, clear rules and procedures, impersonal relationships, division of labor, and rational decision-making. Bureaucratic management aims to eliminate favoritism and ensure efficiency and rationality in organizations.
What Are the 7 Theories of Management?
- Scientific Management
- Administrative Management
- Bureaucratic Management
- Human Relations Theory
- Behavioral Management
- Systems Theory
- Contingency Theory
What Is the Most Popular Management Theory?
- Scientific Management
- Administrative Management
- Human Relations Theory
- Total Quality Management (TQM)
- Contemporary Leadership Theories
Which Approach Is Best in Management?
- Democratic Management Style
- Coaching Management Style
- Affiliative Management Style
- Pacesetting Management Style
- Authoritative Management Style
- Coercive Management Style
- Laissez-Faire Management Style
- Persuasive Management Style
What Is the Best Organizational Theory?
The following are the best organizational theory;
- Scientific Management
- Administrative Management
- Human Relations Theory
- Total Quality Management (TQM)
- Contemporary Leadership Theories
What Is the Current Theory of Management?
The following are the current theory of management:
- Complexity Theory
- Systems Thinking
- Agile and Lean Management
- Design Thinking
- Purpose-Driven and Sustainable Management
What Are the 4 Theories of Modern Operations Management?
The following are the 4 theories of modern operations management;
- Lean Management
- Six Sigma
- Agile Management
- Supply Chain Management:
Who Proposed 4 Principles of Management?
The 4 principles of management were proposed by Henri Fayol.
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