Four Types of Management Theory

Management is an art and a science. Managers deal with human beings whose behavior cannot be reduced to formulas. Managers can benefit from learning and implementing best practices or studied and tested approaches to running an organization. Management theories are visions of different ways to run a business based on differing assumptions about how people and systems operate. They have evolved considerably over time from traditional top-down authoritarian paradigms to more human-centered contemporary adaptations.

At the turn of the 20th century when the potential of science to improve productivity was becoming abundantly clear, Frederick Taylor developed the scientific, or classical, management theory. This approach uses data and measurements to make organizations more effective. By observing and evaluating processes in numerical terms, managers are able to distill information that helps them run their businesses more efficiently and profitably. The process of gathering data led to standardization and a management strategy based on punishment and reward. This approach worked for mechanized operations, but it did not do justice to the human element, the role that personnel play in innovation, and the importance of keeping staff satisfied and engaged so they do good work.

The seminal sociologist Max Weber built on Frederick Taylor's scientific management theory with his theory of bureaucratic management, which takes the scientific principles that Taylor applied to production systems and applies them to human resources management as well. Bureaucratic management theory stresses clearly designated roles for employees and management based on hierarchies that streamline authority and make it clear who is in charge and who is not. However, Weber's theory cannot be reduced simply to a mechanical, systematized approach to managing human beings. He also wrote about the dangers inherent in unchecked hierarchical bureaucracy and stressed the role of emotion in a business landscape dominated by technology.

Over the course of the 20th century, management systems became more human-centered, emphasizing the capacities of individuals to act autonomously and creatively and gearing management toward bringing out the potential of the people they employ. Human relations management theories emphasize the importance of aligning the needs of the workers with the needs of the company and adopting policies aimed at their mutual benefit.

Systems theory looks for holistic patterns in scientific and metaphysical contexts, and the management approach to systems theory aims for achieving an integrated and balanced whole in business as well. Features include identifying the overall goal of the organization, working so that its various elements function cohesively to achieve this goal, and understanding the cycles regulating a system's inputs and outcomes. This management theory is especially effective for recognizing and leveraging the particular patterns that a company's operations follow.