Management Therories

Identify the different theories of management and discuss their cost benefits for the business you have studied.

Management refers to the coordinating activities in a business via planning, leading, organising and controlling in order to achieve business objectives. To produce effective management skills people have created theories as a basis of structure in the business because every business whether it being profitable or non-profitable, small, medium or large needs effective management to succeed. The main theories include the classical/scientific theory, behavioral theory, systems theory and contingency theory. Currently reconsidering their management approach, due to lack of discipline in classical theory therefore causing a recent decline in sales and customer base is Power Raid Sports. It is a small business with 15 employees and 3 managers, located in the tertiary industry as it is providing a service. Its prime function is to strive to provide good quality sports equipment to its customer base so they can effectively develop the skills necessary in being productive at the sport they are playing.

The classical/scientific theory was pioneered by Max Weber and Henri Fayol but further developed by Frederick Taylor. They suggested that there is one best way to do a job- a bureaucratic approach (set of rules and regulations that control a business).

Four principles of classical/scientific management are: that in a business they must scientifically examine each part of a task to determine the most efficient method for performing a task, to select suitable workers and train them to use the scientifically developed work methods, to cooperate with workers to guarantee they use the scientific methods and to divide work responsibly so that management is responsible for planning and organising and controlling the scientific work methods and workers are responsible for carrying out the work as planned. This is favors’ an autocratic style of management (directive and coercive). This style also favors the hierarchy, the long chain of command and a narrow span of control, the division of labour and specialization and generally focuses on PLANNING, ORGANISING and CONTROLLING the business. This theory was used prior 1980s.

In relation to PRS due to the fact that the business was uncontrollably and rapidly expanding they saw this method as an effective way to structure the business. Each person was given a task to care for so internal influences in a business can be controlled more efficiently.

The behavioral theory was founded by Elton Mayo which advocates to management, a stress that people should be the main focus of the way the business is organised. This idea was focused by giving more motivation, communication and leadership between employees and employers in the decision making regarding the workplace, therefore gaining more employee empowerment. Two main principles were established as a result: worker satisfaction to a large extent is non-economic: that is, workers have social needs in addition to economic needs and being made to feel part of a team increases job satisfaction and output. It also concentrates on multiskilling and teamwork which as a result creates a more productive workplace. The theory favors the democratic style of management (collaborative and consultive), the flat chain of command and wide span of control. This theory started becoming in use from the 1990s and onwards.

In relation to PRS the business moved away from classical scientific theory and towards behavioral due to the lack of enthusiasm and productivity in which the business employees experienced in the last 6 months.

Developed by James Macron and Herbert Simon refined by Jeffery Pfeiffer the political/power theory reflects the power base, the ability to gather together resources to get something done by sometimes unethically using methods to obtain power and advancement within an organisation. There are different types of power these being legitimate (given because of status of position of person within the firm.), expert (emerges as a result of persons skills and expertise and it is usually the reason why a person was employed), reverent (comes from peoples, individuals characteristics-which influences others), reward (relates to the rewards or compensation a manager distributes for doing a good job) and coercive ( controls individuals in the organisation by the actions or words of the manager). In relation to PRS the business uses reward power to influence workers to become more productive i.e. pay rise expert power to efficiently run the business and coercive power to make sure nobody does not do out of what is expected.

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