Theories of Management 1: Scientific Management

Theories of Management

Administrative Management

• Developed by Henri Fayol in the 19th century
• Focuses on the perspective of managers and the situations they might encounter
• Five main functions of leaders: forecast, plan, coordinate, command, and control
• Principles outline how leaders should organize and interact with their teams

Classical School

• Paved the way by preclassicists Robert Owen and Charles Babbage
• Believes in structured management approaches
• Notion that money motivates employees

Scientific Management

• Developed by Frederick Taylor in the late 1800s
• Takes a scientific approach to management
• Recommends simplifying tasks to increase productivity
• Leaders should assign team members to jobs that best match their abilities, train them thoroughly, and supervise them to ensure efficiency
• Focuses on achieving maximum workplace efficiency by finding the optimal way to complete a task

Fayol's Principles

• Freedom of initiating
• Equity (treating everyone equally with kindness)
• Centralization (topmost authority makes most important decisions)
• Order (right person at the right place)
• Division of responsibility
• Discipline (obedient workers, clearly defined rules and regulations)
• Unity of direction (one manager per department)
• Job security
• Team work (cooperation is better than individual performances)
• Scalar chain (line of authority)
• Unity of Command
• Subordination of individual interest to the organization's needs
• Employee compensation
• Division of work

Bureaucratic Management

• Developed by Max Weber
• Focuses on structuring organizations in a hierarchy with clear rules of governance
• Principles include a chain of command, clear division of labor, separation of personal and organizational assets, strict and consistent rules and regulations, meticulous record-keeping and documentation, and selection and promotion of employees based on performance and qualifications

Human Relations Management Theory

• Developed by Elton Mayo
• Focuses on changing working conditions to improve productivity
• Experiments showed that improvements were due to researchers paying attention to employees and making them feel valued, rather than changes to working conditions themselves
• Theory states that employees are more motivated by personal attention and being part of a group than by money or working conditions

Systems Management Theory

• Asserts that businesses consist of multiple components that must work in harmony for the larger system to function optimally
• Organization's success depends on synergy, interdependence, and interrelations between subsystems
• Employees are the most important components of a company, and departments, workgroups, and business units are all crucial elements for success