Management theories are the concepts, principles, and general rules that give ideas and strategies and guide the managers for the effective management of the business. There are many theories of management from them a manager can choose one theory that is suitable for his business environment.
The top 10 management theories are:
- Scientific management theory
- Administrative management theory
- Bureaucratic theory
- Human relation approach
- Need hierarchy theory
- Theory X and Theory Y
- Two-factor theory
- Management science theory
- System approach
- Contingency approach
These theories are also classified on the basis of their nature as scientific, behavioral, and modern management theories. Let’s shortly talk about these theories,
Scientific Management Theories
Scientific management theories include, the theory of F.W. Taylor, Henri Fayol, and Max Weber.
Scientific Management Theory
The concept of scientific management is introduced to replace the traditional method of management. Scientific management is an attitude and philosophy, which discards the traditional method of, hit and miss, rule of thumb, trial and error of managing work and workers.
It was F.W. Taylor, who introduced the scientific management theory and also known as the father of scientific management.
He believed there is science for doing every job. He focused on reducing wastage in operations, introduced a fair pay system to workers, put incentives in the works, and emphasized using the scientific application in doing the work.
Administrative Management Theory
It was Henri Fayol, who introduced the administrative management theory and known as the father of modern management. He emphasized managing the entire functioning of the organization in other to maximize productivity. He emphasized proper managing management functions like forecasting and plan, organize, command, coordinate, and control.
He introduced universally applicable management principles include division of work, authority, and responsibility, discipline, unity of command, unity of direction, the subordination of individual interest to the general interest, remuneration of personnel, centralization, and decentralization, scalar chain, order, equity, the stability of tenure, initiative, esprit de corps.
The bureaucratic theory of management is introduced by Max Weber, a German Sociologist, in the 19th century. It is one of the aggressive theories of management.
He argued in the organization there should be a strict structure that every employee should have to follow. His theory is applicable in large and complex organizations. His theory is characterized by the division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relations.
Behavioral Theories of Management
These theories include the theory of Elton Mayo, Abraham Maslow, Douglas McGregor, and Frederick Herzberg.
Human Relation Approach
As its name suggests, it is concerned with human relations in the organization. Elton Mayo introduced the “human relation approach” in management practice.
He suggested in the organization there should be a mutual understanding between managers and workers. He argued the best way to achieve the organizational goals and objectives is through the employee’s quality of work life. A manager must have to motivate employees and create an environment to do the work in their best possible way.
Need Hierarchy Theory
One of the popular theories of management and motivation is the ‘need hierarchy theory’. Abraham Maslow, a human psychologist introduced this theory mainly for motivation purposes.
According to him, people have unlimited needs, and when one need fulfills, another need takes place in sequential order. He categorized human needs into five physiological needs, security needs, social needs, esteem needs, and self-actualization needs. He sequenced the needs from basic to complex needs. And, said at first people are try to fulfill most basic needs, and until unless most basic needs are not fulfilled, they not think about other higher needs.
Theory X and Theory Y
Douglas McGregor introduced a motivation theory called “theory X and theory Y“. He identified human nature as two types called X theory negative and theory Y positive.
According to this him, theory X people inherently dislike doing works and have negative intention towards work. To manage these types of employees a manager has to introduce incentives as well as punishment, if necessary. Whereas theory Y people are self-directed, they take works as a daily life activity and seek their responsibilities. As they are self-directed managers easily convenience them towards the completion of works.
Two Factor Theory
Frederick Herzberg introduced the “two-factor theory” in motivation. He found two factors that affect human behaviors viz. hygiene factor and motivating factors.
Hygiene factors are dissatisfiers. The presence of them can not motivate employees but due to their absence employees may dissatisfy. It includes salary, job security, status, etc. Whereas motivating factors are also called motivators. The presence of these factors results in the high motivation to employees but their absence doesn’t lead to a high amount of dissatisfaction. Such as recognition and personal growth.
Modern Management Theories
These theories include management science theory, contingency theory, and system theory.
Management Science Theory
Management science theory focuses on using quantitative tools for decision-making. The quantitative tools involve mathematical and statistics to solve the management problems.
After the second World war, to solve the military problems by the U.K. and the U.S.A. it is developed. It focuses on solving technical problems rather the human behavior problems.
The system approach to management focuses on building interrelated systems and subsystems in the organization. It is the new thinking in the management practice. It suggests to get the best output, the input must have quality, and the processing function must be objective-oriented.
The system consists of input, process, and output. The input includes human, finance, physical, and information. The process includes planning, decision making, leadership, and control. And, the output includes goods or services, profit or loss, and employee behavior.
The contingency approach is also known as the situational approach/theory of management. It believes that there is probably no single way to solve all managerial problems. It argued to solve the managerial problems a manager must be situational, meaning that, he must have the ability to adjust the situation that arises in the course of functioning.
A manager is called effective when he adjusts easily the uncertain situations. This theory suggested four variables that a manager has to focus on, organization size, routines of technology, environmental uncertainty, and individual differences.