Popular management theories explained: Advantages and disadvantages

Two men and Two women all in a business meeting

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 each employee, even those on the same team, is different, managers have to appeal to their varying natures. After all, 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.

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. Here, we’ll detail some of the more popular management theories, touching on their origins and pros and cons in the process.

Quick Navigation

What are management theories?

Why are management theories important?

Management theories for managers

Different management theories explained

Scientific Theory

Human Relations Theory

Systems Theory

Administrative Theory

Bureaucratic Theory

X&Y Theory

Contingency Management Theory

Modern Management Theory

Classic Management Theory

How to apply management theories

Cropped shot of a group of colleagues having a discussion in a modern office

What are management theories?

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

Why are management theories important? 

For the most part, professionals don’t rely on one management theory alone. Instead, they 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.

Management theories can be of great value to the workplace, improving the way processes can function and benefitting your leadership skills. Although opting for a single theory is unlikely to enact change in the way you might hope, combining several can afford you and your team an array of benefits, which we’ll look at next…

How can knowledge of management theories guide managers?

Increased productivity

With management theories on their side, leaders can identify the ways their team prefer to work. These preferences can then be leveraged to improve their performance and increase productivity.

Business People Meeting Conference Discussion Corporate Concept

Streamlined decision making

By grounding them in management theories, managers have a template with which to act and react to certain workplace incidents. This puts them in a better position to solve problems quickly and more effectively, without resorting to hasty decisions that could harm performance across the board.

Increased collaboration

By once again giving them the ability to identify preferred ways of working, management theories allow managers to more readily influence team members, so they can foster more collaborative relationships. Certain management theories may also provide managers with conflict resolution skills, which can further improve collaboration around the office.

Greater objectivity

Rather than relying on your own judgment, management theories allow you to take a step back from situations where subjectivity might kick in. Instead, they offer you a chance to view things from a more objective, strategic perspective.

Different management theories explained 

There is a wide range of management theories that managers use to get the best out of their teams. We’ll look at some of the more popular ones below…

Scientific Theory

Who created scientific theory?

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

What is the scientific theory?

Aiming to make work more efficient, Taylor created four principles to his theory 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

Scientific theory advantages

– Increased efficiency of production

– Introduction of rules and standard operating procedures

– Selecting workers with skills/abilities that match the task

– Improved worker performance

Scientific theory disadvantages

– 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

 Human Relations Theory

Who created human relations theory?

Australian-born psychologist Elton Mayo.

What is the human relations theory?

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.

Businessman working on a laptop computer in the office. He is happy and smiling and there is a window behind him. He is casually dressed

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.

Human relations theory advantages

– Improves productivity

– Considers the wellbeing of employees

– Stronger relationships between workers and manager

– Improves employee retention

Human relations theory disadvantages

– 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 is the systems theory?

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

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.

Group of business person in discussion in the office

Systems theory advantages

– Stronger focus on teamwork and the interrelationships of processes

– Identifies the weak points in systems, not people

– Emphasises planning throughout an organisation

Systems theory disadvantages

– Difficult to successfully implement as companies grow

– Not the best tool to use when in a crisis

Administrative Theory

Who created administrative theory?

French mining engineer Henri Fayol – often described as the father of modern management.

What is the administrative theory?

Seeking to examine businesses 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

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

Warehouse worker checking cargo on shelves with scanner. Female worker in uniform scanning boxes in shelves.

Administrative theory advantages

– Promotes the concept of team

– Motivates employees through fair compensation

– Employees are treated with respect

Administrative theory disadvantages

– 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 is the bureaucratic theory?

Weber proposed that a business or team is at its most effective when it is structured hierarchically with clear rules and roles, which he summed up 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 should be based on performance rather than emotional or personal ties.

 Bureaucratic theory advantages

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

– Discourages favouritism

– Creates a foundation for scalability

Young happy CEO communicating with her colleagues on a meeting in the office.

Bureaucratic theory disadvantages

– It’s almost impossible to keep emotions out of business

– Difficult to maintain high morale

– Creates large wage gaps

– High potential for inefficiency, which can then be difficult to change

X&Y Theory

Who created X&Y theory?

American management professor Douglas McGregor.

What is the X&Y theory?

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. 

X&Y theory advantages

– 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

X&Y theory disadvantages

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

– Few managers view their employees in such black and white terms

– Largely considered obsolete in the present day

Business people using pen,tablet,notebook are planning a marketing plan to improve the quality of their sales in the future.

Contingency Management Theory

Who created contingency management theory?

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

What is the contingency management theory?

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 affective for every situation exists, and thus, different situations demand different leadership.

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.

Contingency management advantages

– 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

Contingency management disadvantages

– 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

Shot of a group of young businesspeople having a meeting in a modern office

Modern Management Theory

What is the modern management theory?

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.

Modern management advantages

– 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

Modern management disadvantages

The same cons that apply to systems, contingency and quantitative theory also apply to the modern management theory. In terms of the latter, 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.

A photo of a business meeting in a modern office with large windows. A businessman is standing up while his colleagues are sitting down. They are smartly dressed. Horizontal daylight indoor photo.

Classical management Theory

What is the classical management theory?

Classical management theory views organisations as a machine, and the employees as the parts that help that machine function. As such, it prioritises a hierarchy, employees working in single areas, and the use of incentives to increase productivity and drive profits.

Under the classical model, workplaces are divided into three levels of authority: business leaders or top-level management, middle management, and supervisors. As for employees, their physical and economical requirements are prioritised over job satisfaction and social needs. With the right financial rewards, it posits that employees will work to their full potential and increase organisational efficiency as a result.

The classic management theory covers the scientific, administrative, and bureaucratic theories that we’ve detailed above.

Classical management theory advantages

– Provides a clear structure for management, along with its functions and operations

– The division of labour makes tasks easier and more efficient to complete, which in turn has the potential to enhance productivity

– The clear definitions and expectations of employee roles and tasks reduces confusion and miscommunication

Classical management theory disadvantages

– Often overlooks the importance and nuance of human relations by favouring control over human behaviour

– Downplays the role that job satisfaction, employee input and morale can play in the workplace

– By focusing on the individual, it eschews teamwork. If a business is to function at its best, then teamwork is essential. A lack of it can hurt the bottom line, as well as limit creativity and communication in the workplace

– Generally only ever applicable to manufacturing settings

A team of engineers having a discussion at a desk in a large printing factory.

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, as follows…


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

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


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.


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 they 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.

Multi-ethnic group of business persons discussing business


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.

Click here for the latest news and features from SM&T or visit our homepage to find out about our latest career opportunities.

The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of SEFE Marketing & Trading. The accuracy, completeness and validity of any statements made within this article are not guaranteed. SEFE Marketing & Trading accepts no liability for any errors, omissions or representations.