[Commerce Class Notes] on Development of Management Theory Pdf for Exam

The requirement for the Development of Management Theories came up with the requirement for professional management in an organisation. A thorough study and analysis of the management of business operations along with performance management has been contributing towards the running of an organisation in accordance with its objectives and goals. A detailed study of various Management Theories and approaches has been presented below. 

 

List of Management Theories

Over the years, several different contributions by management practitioners and writers have resulted in a myriad of approaches to business management. These comprise a “Management Theory jungle” as described by Koontz and Weirich. The following are the major contributions of management practitioners.

 

Scientific Management Theory by Frederick Taylor

In his attempt to use the systematic study as a part of his theory, Frederick Taylor found a developmental approach towards professional management. His theory known as the scientific Management Theory is based on 5 principles as stated below.

• Developing scientific techniques to analyse and determine the best methods of doing a particular job.

• Scientific management in selecting and training workers for maximum productivity.

• Creation of an organisational cooperative environment to avoid discord in group action.

• Ensuring an equal distribution of work and responsibilities to achieve maximum cooperation and zero individualism. 

• Working towards ensuring maximum output. 

 

Bureaucracy Theory by Max Weber

The idea of organisations to be bureaucratic was brought forward by Max Weber. This ensured control on the basis of knowledge, work experience, and expertise. His theory represents a hierarchical pyramid where rules and regulations are defined and promotions are based on qualifications. Here are the principles guiding the Max Weber theory:

• The hiring of staff is based on educational and technical qualifications.

• It is the task of the manager to decide on the promotions based on achievements or experience.

• There should be a chain of command in the organisational structure, along with a grievance reporting process for securing employee rights. 

• Equal distribution of labour.

• Impartial management.

• Everything has to be kept recorded in writing.

• The management concept and process should let the managers manage the company.  Management should not be the responsibility of the owners.

 

General Management Theory by Henri Fayol, the Father of Modern Management Theory

Henri Fayol, often regarded as the ‘Father of Modern Management Theory,’ created the general Management Theory that can be applied in every field of work and administration. In this theory, the manager’s responsibilities were categorised by Fayol on the basis of the management tasks to plan, to organise, to command, to coordinate, and to control. His 14 management principles are hereby stated.

• Division and distribution of work aimed at reaching maximum output with the minimum effort possible.

• Responsibilities come with authority.

• There should be discipline amongst employees.

• There should be a unity of command where an employee receives orders and reports to only one superior. 

• There should be a unity of direction aimed at the fulfilment of the primary organisational goal.

• Subordination brings up the preference for the general interest in comparison to individual interest.

• Remuneration should be satisfying for the employees as well as the firm.

• Centralization should be practised within the organisation along with the delegation of authority and determining managerial responsibilities.

• The order should be kept intact with an appointed place for employees and processes. 

• There should be a scalar chain determining the relationship between employees and their superiors. 

• Equal treatment of employees. 

• Stable tenure of the personnel. 

• Managers must be bold enough to take and implement initiatives.

• Esprit de Corps should be maintained with proper teamwork being emphasised along with sound communication.

 

Robert Owen’s Management Theory

Robert Owen, regarded as the Father of Personnel Management, created a theory as a part of which workers were to spend fewer hours than previously prescribed, and were to be paid wages higher than before. He encouraged the creation of an organisational environment where everyone would collaborate and create with increased productivity. As a part of his Management Theory and practice notes, his contributions to management improved the work conditions in factories.

 

The famous experiments at the Hawthorne Plant by Elton Mayo and F.J. Roethlisberger also deserves a mention in this discussion on Management Theories. They observed that improvement in productivity in group action was dependent on factors like interrelationship between members, morale, and effective management.

 

Professional management is the backbone of an organisation that should be perfectly aligned with its mission, vision, and objectives. For this, the continuous Development of Management Theories has been focused on for decades. Other contributors who introduced various approaches to management are Peter Drucker, William Ouchi, Robert Waterman, and so on.

 

The Background for the Development of Management Theories

After the Industrial revolution of the 18th century in England the manufacturing units developed into big industries. These industries increased the speed of production of various goods by employing a large body of workforce. Controlling and managing such a large body of organisation got difficult and complicated day by day. So many thinkers and industrialists tried to define a standard set of systems or rules to manage the process and workforce involved in the running of an enterprise. Many Scholars of those times, such as Henri Fayol, Max Weber, Robert Owen, have formulated different types of Management Theories to conduct the management of any organisation in a professional manner. Henry Fayol is regarded as the Father of Modern Management Theory.

In later periods many professionals have tried to contribute to the existing Management Theories significantly and helped to develop the theories as we see today. Today Management Theories help not only in organising the workforce and controlling business units but also provide guidance for the management of performance of individuals contributing for the achievement of any goal by any organisation. Service sector enterprises or organisations are the major players of the current economy of the world. These businesses require the most attention for running it along the management lines. Even the government is considered as an organisation to be dealt with according to the Management Theories in a top- down approach. All in all a systematic framework in any organisation is quintessential for its success. Dynamic communication and a favourable environment also play a part in this endeavour.

Developing Scientific techniques to determine the methods and selecting workers is the main focus of the majority of Management Theories. They also emphasise organisational cooperation and correct distribution of work among employees. The ultimate goal of all these theories is to maximise the output and increase the profitability of the investors. 

Learning These concepts will help the students to manage and organise the businesses successfully in their future.