Management theories are theories about what good management involves and what behaviours are successful in achieving the goals of business. These theories include scientific-classical theories, behavioural theories, political management theories and systems / contingency theories. Management theories Classical-scientific management theories focus on rational ways through which businesses could minimize their cost and improve productivity. This is achieved through the division of labour within a hierarchical structure where management was autocratic. Behavioural theories of management recognise that human and interpersonal factors were important to running an organization. It emphasizes that effective management results from a thorough understanding of human needs as well as an appreciation of the informal aspects of the organizations as communication and work groups.
Political management theories focus on how managers can use power and influence within an organisation to achieve its strategic goals. Systems theory is all activities of the business are combined to interact with the business environment so that the best possible result is achieved. The contingency approach is a managerial approach which claims that the application of managerial concepts depends on the evaluation of a situation. Case Study In the case study of "Sparks fly at falling Marks," the business of Marks & Spencer (M&S) was very successful making a turnover of $2. 5 billion a year. However, Greenbury became complacent with their position and "things began to go seriously wrong." The connection between consumers and senior managers became obscured by the increase number of middle managers.
As a result from these actions, the business had a great downfall, Greenbury resigned from his position. Salisbury has been since rectifying the position of the business. He began implementing the structure of the business, which is seen within the behavioural theories of management. This not only flattens the pyramid or hierarchical structure but also was cutbacks in expenses. A total of 3300 employees lost their jobs, 400 of which were from a head office. By eliminating the levels of middle management, resulted in a streamline communication between workers and top management.
The structure allows the establishment and interaction of informal work groups. This proved to be a smart movement for the business as the profits begins to increase. The goal was to create clear profit centres with simple management structures and fast decision making. He also placed more decisions within the selling and market parts of the business by multiskilling the employees and placing more responsibilities amongst them. Management Theories Suited To Contemporary Business The behavioural theories of management are a major theory suited to contemporary business. It emphasizes the social needs of workers and the importance of management style.
Management is seen as leading, motivating and communicating. Flat organization structure and teams is favoured by this theory. The hierarchical structure is basically a pyramid with fewer levels of management. Behavioural theory gives employees a greater variety of tasks unlike the classical theory.
In contemporary business world this notion has led to the idea of multiskilling and job rotation where workers develop competence at performing a number of tasks. The classical-scientific theory imposed specialisation of a specific task which meant that employees focused on one task, which became boring to most. Participative / democratic leadership style is another emphasises of this theory. This meant that managers can delegate decision making to subordinates within defined limits. This resulted in better convenient for the consumers, as decision do not have to be run up the chain of command. The systems approach is also another management theory suited to contemporary business.
Management views the organization as a system of interrelated and interdependent parts. It can be viewed as an open or closed system. The closed system doesn't interact with the business environment whilst the open system does. Unlike the other theories that focus on what was accomplished, this theory focuses on how things are accomplished. The contingency approach is a flexible management theory. Depending on the situation of the business, it will enable either the scientific-classical theory or / and behavioural theory.
The combination is argued to be the most appropriate approach. Therefore, it can be seen that a variety of management theories can be used within business. It was illustrated throughout the source of the implementation of the change to a behavioural management theory. However, certain management theories are suited for contemporary business as compared to others.
It can be seen through the research of each theory will allow management to chose the correct theory for their business, as all have their advantages and disadvantages.