Theory of Management

Presented by Group-1
 Why we need theory of management ?

● Guidance for managers

● Improved efficiency
● Consistency in decision
● Adaptation to change
● Problem solving
● Organizational growth
 Types of theory of management

01 02 03
Neo- classical
Classical theory theory of
of management Management Modern Theory
 Classical theory of
management
The classical theory of management, developed during the late 19th and early 20th
centuries, focuses on improving efficiency and productivity in organizations
through clear structure, standardized processes, and hierarchical control. The
theory emphasizes defined roles, specialized tasks, and formal rules to create
stability and predictable outcomes. Key contributors to this theory include Henri
Fayol, who outlined principles like division of labor and authority, and Frederick
Taylor, who introduced scientific management.
 Types of Classical theory

Frederick Taylor's Scientific Management

Henri Fayol's Administrative Theory

Max Weber's Bureaucratic Management

 Frederick Taylor's Scientific Management

Frederick Taylor's scientific management theory is about making work

more efficient by studying how tasks are done and finding the best
way to complete them.

Taylor believed that instead of letting workers figure out how to do

tasks on their own, managers should carefully plan and train workers
to follow a specific, proven method. By doing this, everyone can work
faster, with less effort and waste, which increases productivity and
reduces costs. In short, it’s about breaking tasks into simple steps,
assigning specific roles, and making sure each person does their part
in the most effective way.
Principle of scientific Techniques of scientific
management management
1.Specific work study :-
➢ Replacement of thumb of rule .
➢ Co-operation . a) method study
b) motion study
➢ Development of workers and c ) time study
selection d) fatigue study
➢ Maximum output . 2.Standardization
➢ Distribution of workload 3.Differential piece rate system
4.Selection and training.
 Henri Fayol's Administrative Theory
Henri Fayol's Administrative Theory can be
broken down into the following key points:

1. Planning: Setting goals and deciding how to achieve them.

2. Organizing: Arranging resources and tasks to achieve the goals.
3. Commanding: Directing and guiding employees to complete their tasks.
4. Coordinating: Ensuring all parts of the organization work together
effectively
.5. Controlling: Monitoring performance and making adjustments as
needed.
 Max Weber's Bureaucratic Management

1. Clear Hierarchy: A well-defined chain of command where each employee knows who they
report to.

2. Specialization: Tasks are divided into specialized roles for increased efficiency.
3. Formal Rules and Procedures: Standardized rules and regulations to guide actions and
decision-making.
4. Impersonality: Decisions are made based on rules, not personal feelings or relationships,
ensuring fairness.

5. Merit-Based Employment: Hiring and promotion are based on qualifications and

performance, not favoritism.
6. Written Documentation: All rules, tasks, and procedures are documented for clarity and
accountability.
 Aspect Frederick Taylor’s Henri Fayol’s Max weber’s

Efficiency of individual Overall management and Organizational structure

Focus workers through the functions of managers and authority based on
scientific methods. in an organization. rules and regulations.

Time and motion Five functions of

Bureaucracy, with defined
studies to identify the management (Planning,
Key Concept best ways to perform Organizing, Commanding,
roles, formal rules, and
hierarchical authority.
tasks. Coordinating, Controlling

Task-oriented;
Focuses on management Focuses on structured,
emphasizes
practices, organizational formalized decision-
Approach measurement, structure, and general making processes, and
standardization, and principles for leadership defined roles.
specialization.

Improve efficiency and Establish a clear, systematic

Increase productivity
Goal and reduce costs.
effectiveness in managing structure to ensure efficiency
the organization. and fairness.
 Neo-Classical Management
The

Theory developed as a response to the more rigid and task-

focused classical management theories. It focuses on the human
side of work, emphasizing that workers are motivated by more than
just money or tasks—they also need good relationships, job
satisfaction, and a positive work environment. This theory emerged
after studies like the *Hawthorne Studies*, which showed that
social factors and employee well-being can greatly impact
productivity. In simple terms, it says that for a business to succeed,
managers need to pay attention to their employees' feelings and
needs, not just their work output.
Types of neo-Classical management

Human Relations Approach

Behavioural Science Approach

Human Relations Approach
1. Emphasis on People: - Focuses on understanding the human aspects of work, such as
motivation, job satisfaction, and interpersonal relationships, rather than just tasks and
efficiency.

2. Social Factors: - Recognizes that social interactions and group

dynamics within the workplace influence employee performance and
well-being. .

3. Employee Motivation: - Aims to increase motivation through

recognition, better communication, and fostering a sense of belonging
and teamwork among employees. .

4. Manager-Employee Relationships

5. Importance of Work Environment

Behavioural Science Approach
1. Focus on Human Behavior .

2. Motivation and Needs .

3.Group Dynamics: - Emphasizes the impact of group behavior,

teamwork, and collaboration on overall organizational success.
Understanding how teams work together helps improve group
performance. .

4. Leadership and Communication

5. Employee Participation and Job Satisfaction

 Comparison

Human relation Behavioral science

Focuses on improving employee satisfaction Focuses on understanding human behavior

Motivation is based on a deeper understanding

Motivation comes from social interactions
of individual needs and behaviors.

Emphasizes building good relationships Uses research to guide management decisions

between managers and employees. and improve workplace practices.

Focuses on fostering teamwork and positive Uses scientific methods to study and improve
communication. how people work together.
Modern Management Theories
● Emerged in mid 20th century.
● To fulfill/overcome the limitations of previous theory of management.
● A type of management approach in which we combine scientific methods and
human psychology to guide organizational practice.
● This theory is based on data driven approach to streamline operations.
● Focus on adapting to the fast-changing world of business.
● These theories believe that there’s no one perfect way to manage; instead,
managers should be flexible and adjust their approach based on the situation.
● They highlight the importance of teamwork, employee involvement, and always
trying to improve.
● For example, some theories focus on understanding how all parts of an
organization work together (Systems Theory), while others stress the need to
adjust management styles based on different circumstances (Contingency
Theory).
● The main idea is that management should be more collaborative and
responsive to change.
 Aspects of Modern Management Theory:
1. Employee centered:

● Importance given to - Employee satisfaction, employee happiness, healthy corporate culture.

● By - Non financial rewards - respect/affection.

2. Data-driven:

● Uses of Statistical analysis and Emerging Technologies to make decisions.

● It helps to remove human bias and make decisions that are not affected by human emotion.

3. Adaptive:
● Adapt to complex situations by applying different management approaches as needed.

4. Holistic:

● Inter-relationships b/w management and workers in all aspects. It also recognizes that people are complex
and their needs can vary over time.
Types of Modern Management Theories

Systems theory

Contingency theory

Quantitative theory
Systems theory
Systems Theory in management views an organization as a complex system made
up of interrelated parts that work together to achieve a common goal.

It suggests that any change or problem in one part of the organization affects other
parts, and the organization must be seen as a whole.

This theory emphasizes the importance of understanding how different

departments, people, and processes interact, both internally and with the
external environment.

It encourages a holistic approach to decision-making, where managers consider the

entire system rather than focusing on individual parts.
Contingency Theory
Contingency Theory in management suggests that there is no single best
way to manage an organization.

Instead, the most effective management approach depends on the specific

circumstances or situation.

This theory emphasizes that different situations, such as the type of

business, the environment, or the characteristics of employees, require
different management styles or strategies.

In other words, what works in one situation may not work in another, so
managers must adapt their approach based on the unique conditions
they face.
Quantitative Theory
Quantitative Theory in management focuses on using mathematical
models, statistics, and analytical methods to make decisions and
solve management problems.

It involves applying techniques like operations research, linear

programming, and simulation to optimize processes, manage
resources, and improve decision-making.

The theory is based on the idea that numerical data can provide
objective insights that lead to more efficient and rational
management practices.

It is commonly used in areas like production, inventory management,

and financial planning, where data-driven decisions can lead to
better outcomes.
 Comparison
Aspect System contingency quantitative

Interconnectedness of Situation-specific Use of data and math to

Focus organizational parts management practices optimize decisions

Holistic view of the Management based on Optimizing processes

Key Concept organization context using number

Global system Flexible, adaptable Data-driven decision-

Approach approach management style making

Achieve efficiency
Adapt management style Improve efficiency
Goal through to specific needs and effectiveness
collaboration
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