Theories of Management
By: Hazel Melanie A. Tan
A collection of ideas which set forth general rules on
how to manage a business or organization.
Management theory addresses
how managers and supervisors relate to
their organizations in the knowledge of its goals, the
implementation of effective means to get the
goals accomplished and how to motivate employees to
perform to the highest standard.
Different Management Theory
Focuses on empowerment of the individual workers as
the source of control, motivation and productivity
A. Motivation Theories
They help explain why people act the way they do.
Motivation is a complex phenomenon. Several theories
attempt to explain how motivation works. In
management circles, probably the most popular
explanations of motivation are based on the needs of
1. Taylor’s Monistic Theory
Is derived from the principles of scientific
Believes that if energetic people with high productivity
learn that they earn no mote than a lazy worker who
does as little as possible, they will lose interest in
giving optimal performance.
2. Maslow’s Hierarchy of Needs
Abraham Maslow maintained that people are
motivated by a desire to satisfy a hierarchy of needs.
3. Alderfer’s Modified Need
By Clayton Alderfer, Existence relatedness-growth
4. McClelland’s Basic Needs Theory
By David McClelland that identified 3 basic needs.
5. Herzberg Hygiene Theory
By Frederick Herzberg found that work motivators
6. Argyris Psychological Energy
Chris Argyris believes that people will exert more effort and
energy to meet their own needs than those of the
According to Argyris, following bureaucratic or pyramidal
values leads to poor, shallow, and mistrustful relationships.
Because these relationships do not permit the natural and
free expression of feelings, they are phony or non-authentic
and result in decreased interpersonal competence.
"Without interpersonal competence or a 'psychologically
safe' environment, the organization is a breeding ground
for mistrust, intergroup conflict, rigidity, and so on, which
in turn lead to a decrease in organizational success in
7. Vroom’s Expectancy Theory
Victor Vroom popularized the expectancy theory
which states that motivation is dependent on how
much people want something and their estimate of the
probability of getting it.
8. Skinner’s Positive Reinforcement
B.F Skinner’s believe that behavior may be
strengthened or weakened depending on what follows
9. Douglas Mcgregor
Formulated 2 contrasting sets of assumption
10. Theory Z
From Willian Ouchi a japanese, theory z is a form of
Loyalty is the most important focus and a long term
employment that involves slower promotions and less
B. Scientific Management Theories
Used on the concepts of planning of works to achieve
efficiency, standardization, specialization and
1. Frederick Taylor
Scientific management technique has been employed
to increase productivity and efficiency both in private
and public services, it has also had the disadvantages
of ignoring many of the human aspects of
employment. This led to the creation of boring
repetitive jobs with the introduction of systems for
tight control and the alienation of shop floor
employees from their managers.
For the managers, scientific management required them to:
1. Develop a science for each operation to replace opinion and rule of thumb.
2. Determine accurately from the science the correct time and methods for each
job (time and motion studies).
3. Set up a suitable organization to take all responsibility from the workers except
that of the actual job performance.
4. Select and train the workers (in the manner described above).
5. Accept that management itself be governed by the science deployed for each
operation and surrender its arbitrary powers over the workers, i.e. cooperate
For the workers, scientific management required them to:
1. Stop worrying about the divisions of the fruits of production between wages and
2. Share in the prosperity of the firm by working in the correct way and receiving
3. Give up their idea of time wasting and co-operate with the management in
developing the science.
4. Accept that management would be responsible for determining what was done
5. Agree to be trained in new methods where applicable.
2. Henry Gantt
Gantt charts, and their modern equivalent, program
evaluation and review technique (PERT) charts are
graphic management tools, providing visual methods
of scheduling both time and resources for work
projects. Henry Gantt management theory
incorporates the record of the work that has been
done, balanced with the work that still needs to be
3. Gilbreth, Frank and Lillian
Pioneer in time and motion studies by the use of
Developed the flow diagram and process chart of work
and written instruction.
C. Bureaucratic Theories
Focus on superior subordinate communication
transmitted from the top to bottom via a clear chain of
command, a hierarchy of authority and a division of
Uses rational and impersonal management.
1. Max Weber
Weber identified three basic types of legitimate
authority: Traditional, Charismatic, Rational-Legal.
Authority has to be distinguished from power in this
discussion. Power is a unilateral thing - it enables a
person to force another to behave in a certain way,
whether by means of strength or by rewards.
Authority, on the other hand, implies acceptance of
the rules by those over whom it is to be exercised
within limits agreeable to the subordinates that Weber
refers to in discussing legitimate authority.
Weber presented three types of legitimate authority:
Traditional authority: where acceptance of those in authority arose from
tradition and custom.
Charismatic authority: where acceptance arises from loyalty to, and
confidence in, the personal qualities of the ruler.
Rational-legal authority: where acceptance arises out of the office, or
position, of the person in authority as bounded by the rules and procedures of
It is the rational-legal authority form that exists in most organizations today
and this is the form to which Weber ascribed the term 'bureaucracy'.
The main features of bureaucracy according to Weber were:
a continuous organization or functions bounded by rules
that individuals functioned within the limits of the specialization of the work,
the degree of authority allocated and the rules governing the exercise of
a hierarchical structure of offices
appointment to offices made on the grounds of technical competence only
the separation of officials from the ownership of the organization
the authority was vested in the official positions and not in the personalities
that held these posts. Rules, decisions and actions were formulated and
recorded in writing.
D. Administration Management
Refer to accomplishment of tasks and include
principles of management and concepts of line and
staff committees and function of management.
Focus on the science of management and principles of
an organization applicable in any setting.
1. Henry Fayol
Fayol's "14 Principles" was one of the earliest theories
of management to be created, and remains one of the
most comprehensive. He's considered to be among the
most influential contributors to the modern concept
of management, even though people don't refer to
"The 14 Principles" often today.
The theory falls under the Administrative
Management school of thought (as opposed to the
Scientific Management school, led by Fredrick Taylor).
Division of Work – When employees are specialized, output can increase because they become
increasingly skilled and efficient.
Authority – Managers must have the authority to give orders, but they must also keep in mind that
with authority comes responsibility.
Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
Unity of Command – Employees should have only one direct supervisor.
Unity of Direction – Teams with the same objective should be working under the direction of one
manager, using one plan. This will ensure that action is properly coordinated.
Subordination of Individual Interests to the General Interest – The interests of one employee
should not be allowed to become more important than those of the group. This includes managers.
Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes
financial and non-financial compensation.
Centralization – This principle refers to how close employees are to the decision-making process. It
is important to aim for an appropriate balance.
Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or
chain of command.
Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have
Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and
acting with kindness where appropriate.
Stability of Tenure of Personnel – Managers should strive to minimize employee turnover.
Personnel planning should be a priority.
Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
Esprit de Corps – Organizations should strive to promote team spirit and unity.
E. Human Relation Management
Focus on the empowerment of the individual worker as
the source of control, motivation and productivity in
Human relations as fitting people into work situations
so as to motivate them to work together harmoniously.
1. Elton Mayo
Where Classical theorists were concerned with structure and mechanics of
organizations, the theorists of human relations were, understandably,
concerned with the human factors.
The foci of human relations theory is on motivation, group motivation and
At the centre of these foci are assumptions about relationship between employer
and employee. Best summarized by Schein (1965) or Elton Mayo
they were academic, social scientists
their emphasis was on human behavior within organizations
they stated that people's needs are decisive factors in achieving an
they were descriptive and attempted to be predictive of behavior in
A 'motive' = a need or driving force within a person. The process of motivation
involves choosing between alternative forms of action in order to achieve some
desired end or goal
2. Willian Ouchi
Theory Z of Ouchi is Dr. William Ouchi's so-called
"Japanese Management" style popularized during
the Asian economic boom of the 1980s.
For Ouchi, Theory Z focused on increasing employee
loyalty to the company by providing a job for life with a
strong focus on the well-being of the employee, both
on and off the job. According toOuchi, Theory Z
management tends to promote stable employment,
high productivity, and high employee morale and
While Theory X refers to the old-fashioned, autocratic approach to management which is
sometimes referred to as "hard" management and Theory Y represents a more
"enlightened" and empowering management style generally thought of as "soft"
management, Theory Z incorporates elements that make it an even more participative
style than Theory Y. Some features of William Ouchi theory include:
1. Collective decision-making is a core tenet of Ouchi management theory.
2. Long-term employment and job security also mark William Ouchi theory.
3. Job rotation, generalization and overall understanding of company operations, replace
job specialization as a key component of the model.
4. Slow advancement/promotion is another feature of William Ouchi's theory.
5. Emphasis on training and continual improvement of product and performance are
common to the model.
6. Holistic concern for the worker and his or her family further personalize management
in Ouchi's theory.
7. Explicit, formalized measures, despite implicit, informal control, ensure efficiency of
8. Individual responsibility for shared accomplishments rounds out the theory.