More goes into managing a team than meets the eye.

To
successfully lead a business, you should appeal to employees
through numerous methods, including emotional and financial
incentives. Employees tend to appreciate authentic managers
who value them as people and professionals, whereas some of
the earlier management theories didn’t value kindness or
work-life balance.

Management is a constantly evolving field, and it’s both an art

and a science. Most modern-day workplaces seamlessly
integrate multiple management theories to ensure optimal
employee output. While many of these systems are hybrids of
multiple theories and strategies, there are a few famous
strategies that managers have studied for decades.

What are management theories?

“Proper management” is a tricky term. Not every employee, and certainly not every group of
employees within a company, responds the same way to various managerial tactics. The best
managers are able to use a variety of styles when dealing with different people, while still
applying one or two major guiding philosophies for leading a team. This can make modern
management challenging.

However, managers can use management theories to help guide them through the process.
Management theories, or collections of ideas that provide the framework for effective
management strategy, are implemented in modern workplaces to motivate and bring out the
best in employees.

Theorists have long speculated on what type of management is best for humans in the
professional setting. Management theories, at their core, encompass a set of general
principles that guide managers in overseeing a business. These theories revolve around
supervision, organization and group performance — serving as a tool employees can use to
align with business goals and implement the strategies to achieve them.

Early management theories were rooted in a system of rewards and punishments, where
success received recognition and failure led to reprimands. These theories have been widely
adopted by business leaders to manage their employees’ performances.

Here are the three most commonly used theories in business management today:

1. Classical Management Theory is based on an employee’s

physical and economic needs. It advocates for labor specialization,
centralized leadership and maximized profit.
2. Behavioral Management Theory, or the human relations
movement, emphasizes understanding human behavior at work for
enhanced productivity. It focuses on motivational factors like
conflict resolution, expectations and group dynamics.
 3. Modern Management Theory uses techniques in math, such as
the Quantitative Approach, System Approach and Contingency
Approach, to analyze manager-employee relationships.

Tip
You can empower your employees through human relations theory by fostering
relationships, creating collaboration and giving them the power to make decisions.

What are popular management theories?

Here’s more on the six most popular management theories discussed above in the
infographic.

Scientific theory by Frederick W. Taylor

This one is a classic. Frederick W. Taylor’s scientific theory poses some fascinating
questions by diving deeper into the efficiency of work processes. Taylor was an engineer, and
he experimented to determine the most efficient and effective ways to get tasks done.

On the surface, this theory held great value. The scientific theory aimed to make work more
efficient. Unfortunately, it had some major flaws as well.
Taylor created four principles of his scientific management theory. First, each task should be
studied to determine the most efficient way to do the task. This disrupts traditional work
processes. Second, workers should be matched to jobs that align with both their abilities and
motivation. Third, workers should be monitored closely to ensure they only follow best
working practices. Fourth, managers should spend time training employees and planning for
future needs.

There are a few positives of this theory. Maximizing efficiency is a great idea. Assigning
workers to jobs based on their abilities and motivation levels can also have beneficial effects
in some areas.

Major flaws in the theory include the de-emphasis on teamwork. An incredible focus on
specific and individualized tasks eliminates creative problem-solving and makes teamwork
obsolete. The scientific management theory also encourages micromanagement that could
drive today’s employees up the wall.

Administrative theory by Henri Fayol

Fayol developed six functions of management that work in conjunction with 14 management
principles. This theory has a few core ideas that live on today, but you’ll rarely find a
workplace swearing by Henri Fayol’s 14 principles.

The six functions are as follows:

1. Forecasting

2. Planning

3. Organizing

4. Commanding

5. Coordinating

6. Controlling

Some people combine forecasting and planning into one function, simplifying the theory
down to five functions. The functions are straightforward: Fayol said managers need to plan
for the future, organize necessary resources, direct employees, work collaboratively, and
control employees to make sure everyone follows necessary commands.

The 14 principles are outlined below.

1. Division of work: Employees should have complementary skill

sets that allow them to specialize in certain areas.
2. Authority: Management needs authority to give employees orders.
This authority must be agreed upon.
 3. Discipline: This gets to the idea of employees listening to
commands and being disciplined in getting work done. If a
manager sets a deadline, an employee should have the discipline to
meet it.
4. Unity of command: Employees answer to their managers, and
there aren’t a bunch of unnecessary people involved with the
process. Going over your manager’s head would be an example of
breaking this principle.
5. Unity of direction: Teams should be striving for common goals.
6. Subordination of individual interests: The team comes before
the individual.
7. Remuneration: There are monetary and nonmonetary versions of
remuneration. Both are needed to motivate employees.
8. Centralization: There should be a balance between decision-
making power. For example, a company’s board of directors should
have a say, but the mid-level managers shouldn’t be overpowered.
9. Scalar chain: Each company should have clear hierarchical
structures.
10. Order: This refers mostly to cleanliness and organization
within a workplace. An office shouldn’t be disgustingly messy.
11. Equity: Employees should be treated well.
12. 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.
13. Initiative: Employees should share ideas and be rewarded
for innovative thinking and taking on new tasks.
14. Esprit de corps: Employee morale matters. This principle
suggests that managers should work to keep employees engaged
and interested.

Did You Know?

Employees become 14 percent more productive when they are enthusiastic about
their roles, according to Gallup.

There are quality aspects of this theory. Remembering all 14 principles can be challenging
and makes more sense for a test on management than an entrepreneur running their business.
However, the principles apply in today’s workforce. Concepts like equity and remuneration
are important aspects of management. Other principles, like scalar chain, aren’t always
necessary. Some businesses find success without clear hierarchies, and the organizational
setup depends largely on the business and the size of the company.

Bureaucratic theory by Max Weber

Max Weber created the bureaucratic theory, which says an organization will be most efficient
if it uses a bureaucratic structure. Weber’s ideal business uses standard rules and procedures
to organize itself. He believed this strategy was especially effective for large operations.

The theory includes the five principles described below.

1. Task specialization: Weber stressed the importance of each

employee fulfilling a specific role within a company.
2. Hierarchy: Weber wanted each company to have a clear hierarchy
within the organization.
3. Formal selection: When selecting leaders, businesses consider a
person’s qualifications. They should be appointed to certain roles
based on those qualifications, which means they won’t be elected
by vote.
4. Rules and requirements: These ensure everyone knows what’s
expected of them. Weber wanted business to have uniform
standards, and rules are essential to achieving this goal.
5. Impersonality: The rules and regulations make a business
structure impersonal. Promotions aren’t about emotions or
personal ties, but rather performance.

Elements of this theory make sense. Some rules and standards are certainly necessary within
every organization. On the other hand, it’s not easy to implement many of these ideas. The
theory and practice don’t line up. It’s almost impossible to keep emotions out of business
decisions, and sometimes emotions are needed.

If your company offers three months of parental leave, but a new mother has complications
with her baby near the end of those three months, some managers might offer another few
weeks at home to care for the child. With Weber’s mindset, a manager would coldly ask her
to return to work after three months like everyone else. Emotions shouldn’t always dictate
decisions, but the best managers can relate to their employees on a personal level.

Human relations theory by Elton Mayo

In stark contrast to Weber’s bureaucratic theory of management, Elton Mayo’s human

relations theory emphasizes relationships. Mayo believed that productivity increases when
people feel like they are part of a team and feel valued by their co-workers.

The human relations theory emphasizes praise and teamwork as motivational factors. This is
basically the opposite of the bureaucratic theory. While emphasizing personal factors is a
good idea, there can be too much of a good thing. Valuing relationships above all else can
lead to tricky situations like office romances and promotions based on personality rather than
job accomplishments.

A happy medium between bureaucratic theory and human relations theory might be a better
goal for managers. Some rules are necessary, but you shouldn’t dehumanize employees
either.
Systems theory by Ludwig von Bertalanffy

The systems theory of management believes that each business is a system, much like a living
organism, with numerous activities going on to keep the operation rolling along. A business
isn’t just its CEO, and a person isn’t just a brain. A person needs their other organs and other
key features to live. A business needs more than just a CEO to survive.

While the organism idea is a little extreme — most business operations aren’t life-or-death
endeavors — the analogy applies. The systems theory says everything needs to work together
for a business to succeed.

There is some truth to this theory, as businesses can benefit from ensuring different
departments are on the same page. If a business’s sales team is struggling, it can hurt the
whole operation. On the other hand, a sales team struggling doesn’t necessarily hurt the
accounting department. Many businesses have separate entities within their organization, so
this theory isn’t completely accurate.

X & Y theory by Douglas McGregor

The X & Y theory of management assumes there are two different types of workers. Theory
X workers lack ambition and drive and need to be ordered around by bosses to do anything.
Theory Y workers, on the other hand, enjoy work and strive for self-fulfillment.

Both views of employees are extreme, as most workers fall somewhere between X and Y.
Employees don’t need to be ordered to do every task, but most have some need for discipline
and rules. Many employees do enjoy work, but it doesn’t always come naturally and requires
some encouragement at times. There should be a middle ground for implementing this theory.

“This theory is largely considered to be obsolete today, as few managers begin from a starting
position of being highly polar or binary in terms of their management style being just one of
two options at opposing ends of a spectrum,” said Polly Kay, copywriter and marketing
consultant.

FYI
Management theories are always evolving — past theories touch on some vital
aspects but ignore others. Good managers incorporate different theory elements to
effectively manage their teams.

What management theories teach us about business

Management theories popularized in the early to mid-1900s weren’t perfect. That’s
unsurprising, as different theories of management have gained steam in recent decades.
Popular management theories from the past often touch on important aspects of management
but ignore other crucial points. When studying or implementing these theories, it’s important
to know the pros and cons of each and how those might apply to your business, even if you
aren’t directly using a certain style.

“In the real working world, few managers and business leaders consciously use management
theories as rigid frameworks to adhere to or as long-term guiding principles,” said Kay. “That
said, many do attempt to consciously incorporate individual elements of their preferred
management theories into their broader management style.”

When implementing management theories, you should understand that no two employees or
businesses are the same. A certain style may offend one employee, while another employee
may respond beautifully. Management is both an art and a science, and being an effective
manager requires more than an understanding of certain theories. How they put those theories
into practice is what separates good managers from bad ones.