Popular management theories explained: Advantages and disadvantages

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Looking to inspire greatness in your team? We’ve weighed up these tried-and-tested management theories to see which ones could work for you.


It might seem strange to apply old ideas to a field that’s constantly developing, but if anything, management is something that takes many different forms, methods, and approaches. And since every employee, even those on the same team, is different, managers need to be able to appeal to their varying natures; what works for one person may not work for someone else.

As a result, many modern workplaces combine several different management theories to get the best from their employees – providing real, actionable ways to achieve organisational goals, boost productivity and motivate teams.

Here, we’ll detail some of the more popular management theories, touching on their origins and pros and cons in the process. Understanding different theories and knowing how to implement them can help to improve your management style, while simultaneously realising that elements of certain theories don’t always equal effective leadership.

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What are management theories?

Different management theories explained

How leadership and management theories should be applied

What are management theories?

Even the hardest working humans aren’t built like machines. They have certain characteristics and attributes that make them inefficient in certain areas. Management theories, in all their different guises and disciplines, use frameworks and guidelines so that employees can work in the most efficient and effective ways.

businesswoman talking to her colleague

For the most part, professionals don’t rely on one management theory alone. Instead, they’ll take elements from different theories to form something that best suits both their management style, the team they’re in charge of, and the company culture.

Different management theories explained

Scientific theory

Who created scientific theory?

American inventor and mechanical engineer, Frederick W. Taylor, often called the father of scientific management.

What does scientific theory involve?

Aiming to make work more efficient, Taylor created four principles to his theory which were as follows:

• Each task should be studied to determine the most efficient way of doing the task, disrupting traditional work processes

• Workers should be matched to jobs that align with both their abilities and motivation

• Workers should be monitored closely to ensure they only follow best working practices

• Managers should spend time training employees and planning for future needs

What are the pros of scientific theory?

• Increased efficiency of production

• Introduction of rules and standard operating procedures

• Selecting workers with skills/abilities that match the task

• Improved worker performance

What are the cons of scientific theory?

• Increased performance means more work for the same pay

• Increased performance leads to the creation of fewer positions

• Repetitive and monotonous tasks lead to employee dissatisfaction

• Encourages micromanagement

• Eliminates creative thinking and makes teamwork obsolete

team discussion

Human relations theory

Who created human relations theory?

Australian-born psychologist Elton Mayo.

What does the human relations theory involve?

Tasked with improving productivity among dissatisfied employees, Mayo attempted to improve worker satisfaction by changing certain conditions such as lighting, temperature, and break duration, all of which had a positive effect.

He then altered variables which would have a negative effect on satisfaction, like increasing the length of the workday and making quotas larger. Regardless of these good or bad changes, Mayo observed that worker satisfaction always increased.

He thus concluded that performance was a result of how much attention was paid to workers; the more attention they received, the more valued they felt.

What are the pros of human relations theory?

• Improves productivity

• Considers the wellbeing of employees

• Stronger relationships between workers and manager

• Improves employee retention

What are the cons of human relations theory?

• Oversimplifies human behaviour

• Makes it difficult to predict workplace behaviour

• Favours personality over accomplishments

Systems theory

Who created systems theory?

Austrian biologist Ludwig Von Bertalanffy.

What does systems theory involve?

Bertalanffy’s background in biology explains a lot of thinking and verbiage around systems theory. Essentially, it proposes that each business is a system (like a living organism), composed of interacting elements that are affected by their environment.

team meeting is conference room

In much the same way that a person isn’t simply a brain; a business is more than just the person in the highest position. Put simply, everything needs to work together for a business to succeed.

And since it’s a way of looking at the business holistically as opposed to it just being a management theory, it can be readily combined with other theories too.

What are the pros of systems theory?

• Stronger focus on teamwork and the interrelationships of processes

• Identifies the weak points in systems, not people

• Emphasises planning throughout an organisation

What are the cons of systems theory?

• Difficult to successfully implement as companies grow

• Not the best tool when in a crisis

Administrative theory

Who created administrative theory?

French mining engineer Henri Fayol.

What does administrative theory involve?

Seeking to examine a business from a top-down approach, Fayol concluded that management in general has six responsibilities with regards to managing employees:

• Forecasting

• Planning

• Organising

• Commanding

• Coordinating

• Controlling

team having a group discussion

From here, Fayol then developed 14 principles of administration that influence how managers should lead their team. Though some of these core ideas remain in practice today, it’s rare that all 14 principles are used by a single workplace. Nevertheless, these were as follows:

• Division of work– Employees should have complementary skill sets to work in specialised areas.

• Authority– Management needs authority to give employees orders. This authority must be agreed upon.

• Discipline– Employees listen to commands and have the discipline to get work done.

• Unity of command– Employees answer to their managers. Going over a manager’s head would be an example of breaking this principle.

• Unity of direction– Teams should be striving for common goals.

• Subordination of individual interests– The team comes before the individual.

• Remuneration– There are monetary and non-monetary versions of remuneration, which are both needed to motivate employees.

• Centralisation– There should be a balance between decision-making power vis-a-vis company directors and mid-level managers, for instance.

• Scalar chain– Each company should have clear hierarchical structures.

• Order– A workplace should be clean, tidy, and well organised.

• Equity– Employees should be treated well.

• Stability of tenure of personnel– This principle suggests that businesses should try to limit turnover and keep employees around as they accumulate knowledge and improve.

• Initiative– Employees should share ideas and be rewarded for their thinking.

• Esprit de corps– Managers should work to keep employees engaged and interested.

businesswoman talking to her team

What are the pros of administrative theory?

• Promotes the concept of team

• Motivates employees through fair compensation

• Employees are treated with respect

What are the cons of administrative theory?

• The idea of a good workplace varies from manager to manager

• Not every company requires a clear organisational hierarchy

Bureaucratic theory

Who created bureaucratic theory?

German sociologist Max Weber

What does bureaucratic theory involve?

Weber proposed that a business or team is at its most effective when it is structured hierarchically with clear rules and roles, which he encapsulated in five principles:

• Task specialisation: Each employee should fulfil a specific role within a company

• Hierarchy: Each company should have a clear hierarchy within the organisation

• Formal selection: When selecting leaders, businesses should consider a person’s qualifications when appointing them to certain roles

• Rules and requirements: Everyone should know what’s expected of them. Weber wanted businesses to have uniform standards; rules are essential to this goal

•Impersonal: The resulting rules and regulations make a business structure impersonal – therefore, promotions ought not to be about emotional or personal ties, but rather should be based on performance.

What are the pros of bureaucratic theory?

• Emphasises the importance of certain rules within an organisation, i.e., best practices

• Discourages favouritism

• Creates a foundation for scalability

What are the cons of administrative theory?

• Almost impossible to keep emotions out of business

• Difficult to maintain high morale

• Creates large wage gaps

• High potential for inefficiency, which is then difficult to change

manager talking to his team

X&Y Theory

Who created X&Y theory?

American management professor Douglas McGregor.

What does X&Y theory involve?

McGregor’s theory works on the assumption that there are two different types of workers. Theory X workers were deemed to lack drive and ambition, requiring excessive amounts of direction from their managers. In comparison, Theory Y workers enjoy work, are naturally motivated, and look towards fulfilment in their roles.

McGregor contended that managers leading Theory X workers have an authoritarian management style that leads to micromanagement. Managers in charge of Theory Y workers, on the other hand, tended to have a more participative management style which delivers stronger performance and results, and allows people to grow and develop.

What are the pros of X&Y theory?

• Theory X management creates a structured, process-driven workplace

• Theory Y management creates a collaborative, motivating environment that gives employees responsibility and empowers them to make decisions

What are the cons of X&Y theory?

• Generally, employees tend to fall somewhere between X and Y

• Few managers view their employees with such black and white terms

• Largely considered obsolete in 2021

Contingency management theory

Who created contingency management theory?

Leading psychologist in the field of industrial and organisational psychology Fred Fiedler.

What does contingency management theory involve?

Fiedler based his theory on the idea that effective leadership is directly linked to the traits a leader displays in particular situations. From here, Fiedler extrapolated that a set of traits that are effective for every situation exists, and thus, different situations demand different leaderships.

ceo talking to his team

Put simply, leaders must be flexible and adapt to market changes, business developments, and team demands. To Fiedler, there is no one management style that suits every situation and every business.

What are the pros of contingency management theory?

• It allows businesses to stay flexible and adaptive

• Businesses can choose different leaders based on their abilities in different contexts

• Makes it easier for leaders to create personalised guidance based on individuals’ differing needs

• It allows for thorough analysis before reaching the appropriate decision

What are the cons of contingency management theory?

• That same thorough analysis can be time, resource and cost-intensive

• Lacks scientific research to support its effectiveness in project management

• Difficult to measure its performance

Modern management theory

What does modern management theory involve?

Modern management theory is actually a synthesis of systems, contingency and quantitative theory. We’ve defined the first two above, but quantitative theory is a simple number-based theory that involves calculating the risks, benefits, and drawbacks of an action before moving ahead with that action.

Modern management theory, therefore, combines mathematical analysis with an understanding of human emotions and motivations to create optimum productivity. A balance of hard figures and true feelings, managers employing the theory will use statistics to measure performance and productivity, while also understanding what it is that satisfies their employees.

businesswoman talking to her employees

What are the pros of modern management theory?

• Through understanding employee behaviours through data, managers can maximise productivity

• Greater decision-making supported by figures and data, as opposed to personal feelings or biases

• By identifying processes that take the varying needs of employees into account, it helps improve employee engagement

What are the cons of modern management theory?

• The same cons that apply to systems, contingency and quantitative theory also apply to the modern management theory. In terms of the latter, that means it is limited with regards to organising and staffing, there are time, cost, and technological constraints on collecting data and it only reduces risk as opposed to eliminating it entirely.

How leadership and management theories should be applied

The above theories need skill to apply them into a professional context. Managers should call on things like planning, organisation, and motivation to marshal their chosen theories into practice.

Planning

The right amount of planning ensures actions and tasks are well-defined and distributed in a way that’ll help a business achieve its organisational goals. Without it, employees are left directionless, which impacts productivity drastically.

group discussion

Through strategic planning, you can define the resources, policies and amount of time required to accomplish objectives and garner profits.

Organisation

Organisation involves assigning tasks to the employees who are best equipped to complete them. A lack of clarity at this stage will leave employees confused and unclear about their roles and the amount of authority they may or may not have over others.

Motivation

Introducing a new management theory might be met with resistance from your team. It’s your duty as a manager to get them onboard with your ideas. Short-term treats like incentives and rewards can help initially, but that will only last so long. Aligning your employees’ duties with broader organisational goals and involving them in decision-making will be more fully appreciated in the long term.

Communication

Applying new elements of management theories to your team will be a work in progress. This means communication channels should be kept open at all times.

Make sure you have the communication tools and resources that are best suited to the theories you’re implementing. This will allow your team to exchange information, opinions, and ideas more effectively – all of which are vital for an organisation looking to continuously improve the way it works.

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