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Literature Review on Management Theories


1. Introduction to management and management theories
2. Review and Critique of management theories
a. Fayol’s theory of management
b. Taylor’s scientific theory
c. Max Weber’s theory
d. Maslow’s hierchical theory of human needs
3. Importance of effective management
Literature Review on Management Theories

Management theories are the set of rules or guidelines that seek to help and direct managers in developing effective ways of managing an organization (Miles 12). Such theories act by assisting employees in ensuring that they develop an effective relationship with the goals of the business and implement some effective ways of achieving these goals. However, different scholars have developed different theories to explain how management style and leadership can be made more effective (Miles 34). In fact, there is a wide and ever growing range of theories that seek to explain the practice as well as concept of management. This review of literature seeks to examine some of the major theories within the four categories, with an aim of developing a critique and defining the importance of each theory to modern context of organizational management.

Management theories and styles: Review and Critique

According to Cole (38), classical management theory considers management as a process that takes place within a structured setting of an organization, which has prescribed roles. The management is purposely directed towards achieving the objectives and aims of an organization by influencing the efforts of the people in that organization (Cole 56). Classical management theory has three core components- emphasis on organizational structure, the “what is good for the organization” dogma and the concept of practical manager (however, Marx Weber’s theory does not feature this component). In classical management, three theories are worth discussion- Fayol, Taylor and Weber

Fayol’s theory of management

Henri Fayol was a French economist and philosopher who developed 14 principles of management theory. Fayol’s theory emphasises on division of labour/work as a way of reducing the span of human efforts (Cole 69). This is an important aspect of management because it follows Adam Smith’s theory of economics, which proves that division of labour and specialization encourages motivation and improves organizational performance (Cole 77). However, it is likely to create stereotype employees because it encourages the creation of machine-like employees.
Authority is a principle that emphasises on the right to give orders. This aspect of Fayol’s theory is critical to modern organizations because it requires managers to give orders as a way of ensuring performance. However, it is important to note that without a reference to responsibility, managers might be tempted to give wrong or biased orders.

It also emphasizes on the principle of discipline, where respect in accordance with agreements must exist between the company and the employees. The unity of command is an important principle in Fayol’s theory because it argues that one person should be in command of the entire organization. While this principle facilitates quick decision-making process, it equally creates several loopholes that may encourage monopolistic and dictatorial style of leadership in an organization. In addition, it emphasises on the unity of direction (Jide 39). This principle requires an organization to have one head and one plan for the entire body of activities. This principle may allow the organization to achieve its objectives within a short time. However, it may also cause heavy losses if wrong decisions are made at the top management level. Individual interests should also be subordinated to the general interest, while remunerations should be fair for both the organization and the employees (Jide 41). In addition, it emphasises on centralization and scalar chain of command from top to bottom. Order, equity and stability of tenure are well defined, with justice and kindliness being some important feature of the theory. The theory also emphasizes on initiative, where all members of an organization must show some sense of initiative. Finally, it emphasizes on “Esprit de corps”, which means that harmony and teamwork should be encouraged.

Taylor’s theory of scientific management style

Taylor’s theory (Taylorism) involves breaking down of the key components of manufacturing tasks and timing each movement in order to determine the best way of performing each of the tasks (Jide 33). It emphasizes on training employees to achieve first class performance within their workplaces.
However, the method is highly rigid because every task must become discrete as well as specialized. In fact, it is hard to be applied in modernization agenda because flexibility in the workforce is highly required (Jide 38). On the other hand, the method is critical for organization because it requires the managers to apply scientific way of decision-making. It also encourages accurate determination of the correct time and methods for each task.

Max Weber’s theory of management

Weber’s theory emphasizes on bureaucratic leadership models. Bureaucracy in this theory implies to the organizational form applied in an individual institution it applies to a number of dominant facets of the organization, including hierarchy of authority (Gomez-Mejia, Balkin and Cardy 14). Weber identified three basic types of legitimate authority for organizations- Traditional, Charismatic and Rational-Legal. He argues that authority must be differentiated from power because power is a unilateral object, while authority is the employees’ acceptance of the management’s rules.

One major importance of this theory is that it emphasizes on appointment, promotion and authority based on technical competence and backed by written rules as well as procedures that must be taken into account. Thus, managers cannot favour certain employees, but must follow rules when appointing and promoting. In addition, bureaucracy allows organizations to grow from simple to large and complex systems with high capacity to achieve their goals (Gomez-Mejia, Balkin and Cardy 18). However, a critical analysis of the theory reveals that it creates a tendency for organizations to assume a status of procedure-dominated rather than goal-dominated institutions. It also suppresses the flexibility of jobholders because it encourages heavy formalization of organizational rules and roles.

Maslow’s theory of management

Maslow developed a seminal theory of human needs in 1943 that proposes a hierarchy of human needs based on basic needs at the base of a triangle and higher needs towards the apex.

Figure: Maslow’s Hierarchy of needs theory
The assumption is that individuals must satisfy each level of their needs before elevating to the next higher level in the hierarchy. In organizations, an employee mush have his or her lower level needs satisfied in order to encourage them perform for the organizational goals.
Maslow’s theory is important in modern management styles because it allows managements to take account the needs and wants of the employees as well their aspirations. In this way, employee satisfaction ensures that they perform to their level best. However, the theory is based on assumptions rather than realities. In fact, empirical research studies using individuals in normal organizations have failed to support Maslow’s theory, thus making it less reliable in the modern context.

Management theories and importance of effective management

A review of the management theories has revealed that managers play an important role in any organization. The work of management, regardless of the management theory in application, requires effective decision-making, leading, directing and encouraging high-level performance. Effective management is therefore a critical aspect of every organization (Miles 22). For instance, effective management requires that organizational leaders be “good managers”, which makes them the key to enhance performance and encourage a more competitive economy by ensuring that their individual organizations are high performing enterprises. Managers’ ability to enhance performance means that organizations will achieve the desired levels of growth and expansion (Miles 43). In turn, it implies that more people are set to join the organization, thus creating job opportunities for a given population.
Works Cited

Cole, Gerald A. Management: Theory and Practice. Mason, OH: Cengage Learning, 2011. Print.
Gomez-Mejia, Luis R, David Balkin and Robert Cardy. Management: People, Performance, Change. New York, NY: McGraw-Hill, 2009. Print.
Jide, Adetule P. The Handbook on Management Theories. New York, NY: AuthorHouse, 2011. Print.
Miles, Jeffrey A. Management and Organization Theory: A Jossey-Bass Reader. London, UK: Wiley Piblishers, 2012. Print.

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