Management as a Science and Agency Theory

Management as a Science

• Functions of Management include: designing , organizing, leading, planning.
• Management as a Science is supported by: cause & effect relationships, testing validity, experimentation and observation.
• Functions of Management: Planning: involves missions and objectives. Organizing: involves missions and objectives.
• Quotes about Management: “Management is what a manager does” -- Louis Allan
• Quotes about Management: “Management is the art and science of decision-making and leadership” -- Donald J.Clough

Agency Theory

• Agency Theory highlights the potential conflict of interest between managers (agents) and shareholders.
• Agency Problem occurs when managers prioritize their personal interests over the shareholders' interests, such as maximizing profits.
• Shareholder Theory argues profit maximization is the primary objective.

Coordination in Management

• Coordination is a permeating function of management.
• Coordination is essential for achieving organizational goals.
• Effective Coordination: requires continuity, early beginning, and self-coordination.
• Harmony Of Objectives: is emphasized by F.W.Taylor as crucial for direction success.
• Managerial Leadership Styles: are often driven by the specific situation.

Examples of Agency Theory Issues

• Agency Theory Examples show managers exceeding their duties or not representing shareholder interests appropriately. For example, using company funds for personal trips, or activities that don't benefit the company.
• Reducing Agency Problem can involve aligning managers' objectives with shareholders' interests using incentives like shares in the company.
• Stewardship Theory: implies that managers can act as stewards of the company, protecting and maximizing shareholder wealth.
• Stewardship Theory: emphasizes reciprocal behaviour, where managers' stewardship motivates employees.

Explore the principles of management as a science, focusing on its functions such as planning, organizing, and leading. Understand Agency Theory and the conflicts between managers and shareholders, alongside key quotes that define effective management practices.