Currently, there are several management theories that have found their way into management literature.
During the industrial revolution, the need to change how corporations were managed was strongly felt.
It had become clear that there was a need to change the way business leaders and managers operated businesses.
As a result, several management theories came into being that approached the same topic in different manners.
However, these theories together formed the basis of management as we see in today’s business world.
While some of these theories may sound like common sense in today’s environment, at the time of their introduction, they were considered ground breaking.
With time, new management theories were introduced and several new changes were introduced to how businesses operated as constant change and innovation became the norm of the industry.
The needs of businesses have kept evolving with changing market environment and business dynamics.
Below we will discuss, six important management theories.
These six important management theories which form the basis of the theories that followed later approach the same topic in different manners.
However, there are also various similarities between them in terms of their approach to employee management and business process efficiency.
Scientific management theory:-
The scientific management theory marked a significant development at its time.
Frederick Winslow Taylor gave his scientific management theory in 1909.
The focus of this theory was on the importance of each and every task in business operations, irrespective of its size and the value it generated.
Taylor argued that no matter how small or big a task was, there was a need to find the most effective way to complete each one.
At the time, Taylor gave his theory, the managers gave their workers very little to no guidance over how a task had to be accomplished.
The level of communication and interaction between the managers and employees was also very low.
Taylor argued that managers should assign tasks to each employee based on his skills and capabilities.
They must evaluate their employees based on the quantity and quality of the output.
Taylor’s theory also argued about the importance of training and development of employees.
Administrative Management Theory:-
Fayol’s administrative management theory also found very strong popularity and is considered relevant even today.
Henry Fayol gave his administrative management theory during the early 1900s.
His theory included four important principles that he considered relevant for laying the foundation of a strong business.
In his theory, Fayol agreed with several of the principles that Taylor had laid out in his scientific management theory.
However, there were still some major differences between the two theories.
Taylor’s focus was on effectively completing each task, whereas the focus of Fayol’s theory was on the organization’s structure as a whole.
As a part of his theory, Fayol highlighted that there was a need for clear division of labor and that every employee should report to just one manager.
Fayol’s theory also highlighted the importance of organizational goals and that every employee should be aligned with organizational goals.
He believed that to a significant extent, the success and productivity of the company depended on its organizational structure.
Bureaucratic Management Theory:-
Even if the term might have a negative implication, the bureaucratic management theory implies something else.
The Bureaucratic management theory was given by Max Weber at the end of the 19th century.
The term bureaucratic had a different implication than the context it is normally used in.
In the context of Weber’s theory, Bureaucratic implied clearly setting objectives and a proper division of labor.
It included setting a chain of command within the organization.
However, at the same time, it also focused on providing proper training and support to employees.
While Weber had built upon Taylor’s theory, he added some other important points.
Weber also observed that completing tasks efficiently was crucial.
He advised that companies needed to keep detailed records at all levels inside the organization to monitor the efficiency of tasks and find out the areas where opportunities existed.
However, unlike the scientific theory, there was more space for human emotions in the bureaucratic theory.
He agreed that employees must have clear job expectations and each job needed to be standardized to allow for maximum productivity.
At the time, Weber gave his theory, there was very little place for emotions in the industry and most focus remained on profit maximization.
Weber emphasized that being inhuman or using too much technology would harm a company’s culture and advised that companies should not hire just on the basis of skills but also consider personality traits that fit into a company’s culture.
Human relations management theory:-
The focus of the human relations management theory was on the human interactions and workplace relationships.
Its focus was on factors that affected employee performance.
George Elton Mayo, an Australian psychologist was a significant contributor to this theory.
He with a few others conducted the famous Hawthorne studies to study the attitudes and psychological reactions of workers in various situations.
They observed that pleasant daily interactions motivated the employees and made them work with higher focus, which grew their efficiency and led to higher output.
The researchers allowed the employees to voice their opinions and considered their views on various topics.
Being able to share their ideas, the employees felt more valued and it made them feel more satisfied.
Apart from it, when the employees knew that they were being monitored, it also motivated them to work harder.
This research brought human relations into spotlight and made the importance of group dynamics and team work inside the organization grow more highlighted.
General Systems theory:-
The general systems theory was given by a well-known Austrian biologist Karl Ludwig von Bertalanffy.
This theory had a significant impact on management.
According to the biologist, our body operated as the sum of all its parts and not as separate parts.
It operates most effectively when all the body parts operate in tandem.
If any part of the body fails to operate perfectly, it has a negative impact on the other parts as well.
The theory still finds a special relevance in various management styles and theories.
His theory also showed that external factors could prove toxic to an environment.
Though, the theory mainly applied to human body, it also applied to psychology, social sciences and to the other fields including management.
The theory also highlighted that if one part of the company was not functioning properly, it could have a negative impact on the entire organization.
It showed that the leaders needed to consider all the parts of the organization important in order to generate perfect results.
X&Y management theory:-
Douglas McGregor developed the X and Y theory, which was based on the observations he made during the 1950s and 60s.
Based on his observations, he argued that the company managers could be categorised into two segments.
One was the X category and the other was the Y category.
The managers in the X category mostly held a highly negative view of their employees and thought that the employees needed to be forced to work hard.
They tended to micromanage their employees expecting that it motivated them to work harder.
The X managers believed employees were not motivated by themselves to work hard and if they were not pressurized they will not complete their tasks in a timely manner.
However, the theory Y managers believed just its opposite.
They valued their employees’ contribution and believed in providing support and training to grow their output and managing their performance.
The Y managers believed in team work and in inspiring their employees to collaborate.
McGregor argued that while companies needed to nurture a team environment, the focus also has to be on individual professional development.
These things result in a more suitable work environment.
In this way, McGregor’s theory established a clear distinction between the good and bad supervisors.
This theory is still relevant in the business world and guides managers on topics including worker productivity, safe and healthy work environment and employee training and development.