Foundational Management Theories
Running a successful, best-performing business implies possessing particular management strategies and approaches in order to make an organization a proficient and abundant entity. Company executives might tap into multiple leadership theories, and management orientations to lead a company and its members into a top competitive position at a vast expanse of rival firms. These key performance components are indispensable parts of a business administration. There is a specific differentiation between management policies that are integrated into a cooperation adjustment.
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Foundational Management Theories:
- Administrative Theory by Henri Fayol;
- Human Relations Theory by Elton Mayo;
- Theory of General Systems by Ludwig von Bertalanffy.
Administrative Theory by Henri Fayol
Administrative theory is the structure represented by administrative or managerial aptitudes and skills aligned with managing a team to work as a complex workforce. This theory can be characterized by individuals exchanging their experiences with others to maintain a company or an organization in an efficient way (Isomura, 2021). There are several significant principles representatives of the administrative theory operate on, they are:
- Authority-Managers function as the authority that is in charge of forming groups, giving orders, and distributing responsibilities among company representatives. Managers must possess a high level of accuracy, working knowledge of organization mechanisms, intelligence (Boon, 2021). This set of abilities makes a current manager take the leading position in the organization;
- Division of Work- There is a strict distribution of labor. People are preoccupied with particular liabilities of spheres they want to be good at, as productivity is the critical component a proficient worker must manifest. At the present moment, company executives are against multi-tasking frames;
- Discipline- Every company participant must have their own responsibilities and rules that they are to follow. The crucial role of managers is to drive home the message concerning organization workers’ liabilities and duties and make them explicit;
- Command unity- An employee has to run reprimands expressed only on one supervisor’s behalf. This behavioral frame, where a worker receives instructions and orders from the particular supervisor, creates the structure of centralized notions, such as discipline, stability, authority, peace, and order;
- Direction Unity- The central concept of this principle is to create the uniformity of actions, where employees are guided by the directions of one supervisor or a manager, operating on a plan set by the manager. This frame emphasizes effort, focus, and strength coordination.
Sony Ericsson, Johnson & Johnson are the current examples of companies resorting to the administrative management theory. They standardized the significant notions of this theory, and company executives coupled with managers tap into these activities in order to organize a team where organization participants follow their instructions without any reservation. Representatives of these organizations make their employees not only sustain the strict order in the company maintenance, but also be able to be order-centralized and organized.
Human Relations Theory by Elton Mayo
Human Relations Theory is the approach centered around employees’ needs in order to satisfy them and meet them. According to this theory, it is essential that company participants feel to be heard out, and their concerns are to be taken into account, as the overall company sentiment is the number one priority. Working in the positive micro-environment, workers display the high rate of motivation that guard them to manifest good performances (Lloyd-Jones,2021). Given a lot of personal freedom, organization participants feel that they are not given the second-class treatment, but belong to the high-profile group of people, whose initiatives are encouraged and welcomed. It is a case of stimulation and promotion of workers who want to work collaboratively and collectively to achieve a company mutual goal. In other words, collaboration is the significant component of the Human Relations Theory, where company executives, leaders, and supervisors try to satisfy employees’ needs and wants.
Referring to the primary principles of this management approach, managers and supervisors have to sustain the positive working microenvironments to accomplish two goals. The first one is to eliminate the diminishing returns of a company; the second one is to facilitate the collaboration of organization participants to achieve the first mentioned goal.
Significant Characteristics of Human Relations Theory:
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- Labor Motivation- Human Relations Theory introduced the term “employee,” implying individuals with excessive working potential, as the term worker means workforce running for errands thoughtlessly. In this frame, mechanistic management perspectives are replaced with people-oriented perspectives;
- Humanity Complexity- In this paradigm, there is an emphasis on interpersonal interaction among employees, mutual respect, collaboration. An individual’s soft side is constantly evaluated, as this side represents emotions, biases, and sometimes irrational logic. The crucial role of a manager is to strengthen employees’ upsides and eliminate their downsides;
- Centralization- Despite the fact that a manager or a supervisor is authorized, they pay attention to every “cog” in their system. They are decisive that their followers are eligible to make decisions by themselves;
- Equity- Even though managers have enough power and authority to run a company and persuade company participants to follow them, they treat every single employee in a fair and loyal way;
- Initiative -Organization participants have to be free in their standpoint expression, as well as in offering new initiatives, ideas, and plans.;
- Esprit de Corps- Organizations should strive to promote team spirit, unity, and morale (Putra & Fitri, 2021).;
- Staff Retention- Companies have to put in their best efforts to minimize or decrease the rate of staff turnover, thus enhancing the efficiency of an organization. In case workers are motivated and want to stay at their work, the company productivity might increase tenfold.
Five Functions of Management:
- Planning (anticipation of further profitable and beneficial action towards company proficiency);
- Organizing (authority layout, covering training and recruitment, coordinating organization participants and their activities that have to be clear and “serene” for them);
- Commanding (forcing people into performing organization objectives without undermining their indignity, but doing it to a company advance);
- Coordinating (the awareness of staff liabilities, and team members’ needs);
- Controlling (evaluation of how plans, rules are followed).
The Google Company is the telling example of a company integrated with the Human Relations Theory. The emotional well-being of company members is the number one priority as satisfied employees are abundant with initiatives and propositions that are aligned with company promotion. Every team member being fit in at work feels encouraged and highly motivated, as they feel that they are not underestimated or abused in terms of overtime-work projection.
Systems Theory by Ludwig von Bertalanffy
Systems Theory or a General System Theory stands for the wholeness of an organization or a company, where corporate integration is considered to take the central part in the general theory of systems. This theory can be a measure of the particular scientific field of nonphysical notions. In this structure, there is no hierarchy where responsibilities and orders flow down from a boss to a person getting a less prestigious position in the business chart (Valentinov& Pérez-Valls, 2021). Instead, there is a solution to create several systems of management that share liability among them. Some organizations create several departments with their executive manager and their subordinates for collective work.
The Concept of General System Theory:
- Goals-These departments might interchange their initiatives and standpoints to choose the most beneficial ones for the overall company abundance. In other words, organization participants aim at achieving mutual goals;
- Project Orientation- Each department creates particular projects with diverse directions for accomplishing. These projects are crucial centers for resources, company facilities, and information repositories participants can tap into for their enlightening (Kiesling, 2021). In this management approach, a manager or a supervisor acts out as a leader who is in charge of coordinating their followers and their requests and prepositions for further input in the organizational processes;
- Transformation- Transformation embraces internal and external evaluations of organization raters. Positive or negative feedback and assessments enable participants to analyze which rationalities to reconsider, weaknesses to eliminate, and upsides to enhance. As the management structure is not hierarchical, it consists of separate units or departments that bear responsibility for their actions as they do not ask for permission to implement changes.
CVS Pharmacy, the subsidiary of CVS Health Corporation, is the current example of the company resorting to the General Theory of Systems, as it has many sub-companies with particular responsibilities and objectives. It is essential to integrate this management strategy as this cooperation has a lot of bodies with their own administrative centers with varied systems integrated into their maintenance. The Systems Theory provides the company with multiple dimensions for the enhancement of the brand. During sessions, where representatives of separate departments discuss their objectives aligned with further company brand development, the common solutions and rationalities are taken and come into force by means of the Theory of General Systems.
International Company X
Short Description of an International Company X:
- The head office is in the US;
- The number of employees is approximately 130000 people;
- The year of the establishment is 2000;
- It deals with medication export and import;
- There is a great rate of staff turnover there;
- There is staff shortage;
- There are constant conflicts among company participants due to different social contexts and their backgrounds;
- The cases of discipline-misconduct are observed.
The international company X that embraces company members from different corners of the world is the perfect example of the mixed team working theory implementation. As this company is global, leaders who combine diverse group leadership approaches resort to all variants of team grouping, focusing on participants’ social contexts, backgrounds, and mentalities. As there are a lot of participants from different nations, managers and supervisors have faced a lot of problems concerning discipline-misconduct, due to varied employees’ standpoints and world perceptions. It is challenging to create a positive micro-working environment for all members of a company. In case of discipline misconduct, managers have resorted to administrative management theory, where obedience is crucial in organizing a group. There is a strict hierarchy, meaning that company executives stand in the head, and their subordinates follow their instructions and orders without any reservations. Referring to the evaluation of the three theories mentioned above, the administrative theory is the best solution to resolve the issue of discipline-misconduct.
Discipline-misconduct was a major weakness of company X, as, previously, supervisors and managers have handed too much freedom to team workers. Being a zealous supporter of democratic leadership management, they tended to consider their co-workers to be reliable partners taking credit for the loyal policy in business conduct. In fact, individuals handed in a lot of freedom of action might manifest a tendency of treating their work vigilantly. To eliminate the workers’ lax attitude to a company arrangement, the head office has resorted to the administrative management theory coupled with authoritarian leadership practices that might improve mutual cooperation and partnership with company participants.
As mentioned above, the company supervisors overused a democratic leadership style; as a result, company X had several difficulties forcing team members into achieving the organization’s goals. In a democratic relationship, members feel free to voice their opinions, concerns, working objectives and act out as my equal partners, but not subordinates. It was an organization’s major downside in leadership administration and management.
Company X has to validate alternate approaches in assuring employees that managers and supervisors are their role model in order to follow any single instructions and not abuse their loyal treatment. Moreover, the head office has to combine the concern for assignment perspective and the concern for behavioral perspective to make them the complete body of leadership management. As managers face the issue of disciple-misconduct, they integrate the administrative theory coupled with situational leadership. Situational leadership style represents a leader’s ability to react, facilitate and enhance employees’ abilities related to the current situation. This style provides action flexibility and a vast expanse of beneficial outcomes, this approach might be slightly modified to great advantage.
The concept of situational leadership consists of two dimensions, such as a concern for assignment distribution and concern for behavioral patterns. Control, support, defining goals, establishing personal contact with subordinates, and setting deadlines are the primary leader’s liability. Sometimes, there are some issues a leader might face during their administration policy. For instance, a leader cannot pay attention to all management aspects, such as discipline, the centralized decision-making process, and the pervasive obedience on employee’s behalf. Besides, some points such as less support surveillance or lack of uplifting mood might be left unattended. As a rule, the inability to observe all management risks and factors is a newbie leader’s implication position due to little first-hand experiment in the leadership policy. The issue of discipline-misconduct might be solved by implementing these two approaches (the administrative and situational management strategies), where hierarchy stands at the head of the process. Company participants have to realize that severe measures and sanctions might be imposed on them in case of misconduct or the vigilant attitude to their primary liabilities.
Discipline- Misconduct Sanctions:
- Reprimands (undermining the subordination frame, late arrivals, the lax attitude to work);
- Fines, withdrawal of financial bonuses, and fringe benefits (constant late arrivals, non-compliance of orders);
Different companies in their performances use several foundational management theories. If company executives believe that a centralized decision-making process is essential in the organization’s management, they resort to the administrative approach. The human relations theory is integrated when there is an emphasis on company participants in terms of their motivation, encouragement, and advancement. General systems theory is used when it comes to a company with several departments and entities with their objectives and rationalities.
There are a lot of controversial issues cooperations might face during their performance. The case of disciple-misconduct is an omnipresent matter nowadays that might affect the overall organization proficiency. There is a solution to combine the administrative theory with the situational leadership strategy to eliminate these employees’ misdemeanors. The administrative management implies imposing sanctions and limitations on employees to make company X the profit-maximizing business.
Boon, Q. W. (2021). A Review of the management theory for special education task load perspective. Turkish Journal of Computer and Mathematics Education (Turcoman), 12(11), 5234-5238.
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Isomura, K. (2021). Search for missing links between records management and business administration. Archives for Maintaining Community and Society in the Digital Age, 5(1), 39-47.
Kiesling, L. (2021). Plug-and-play, mix-and-match: a capital systems theory of digital technology platforms. The Review of Austrian Economics, 34(1), 13-32.
Lloyd-Jones, B. (2021). Developing competencies for emotional, instrumental, and informational student support during the COVID-19 pandemic: A human relations/human resource development approach. Advances in Developing Human Resources, 23(1), 41-54.
Putra, R. B., & Fitri, H. (2021). The Effects of mediating job satisfaction on organizational citizenship behaviors with servant leadership and human relations as antecedent variables. AMAR (Andalas Management Review), 5(1), 15-32.
Valentinov, V., & Pérez-Valls, M. (2021). A conception of moral wayfinding for business managers: the obligation for a sustainable corporation. Journal of Cleaner Production, 284(1), 15-28.
Kiesling, L. (2021). Plug-and-play, mix-and-match: a capital systems theory of digital technology platforms. The Review of Austrian Economics, 34(1), 13-32.