Theory of management

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Theory of management
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Management is a multi-disciplinary area of study. It encompasses all of the activities aimed at the organization’s resources of which aim is to achieve the organization’s objectives in an efficient and effective manner. The core of the word “manage” comes from the Latin word “manus” (hand), which clearly indicates its utility, manipulative character in the sense of which a man uses his hands when performing various tasks. Managing involves all actions undertaken to make the others (people, institutions, organizations) to act as the manager commands. Synonyms: directing, control, governance, leadership.

Forms of management

The term management has the widest range of conceptual forms such as:

  • management - where the exercise of power results from the ownership of the means of production,
  • governance - where power is based on the applicability of legal coercion,
  • forcing (compulsion) - where governance is an illegal action,
  • leadership - where governance refers to the informal influence on organization.

Both terms governance and leadership are derived from the concept of "control", which means "any intentional impact of one system to another in order to obtain such process changes or state of a system which is considered to be desirable." Management is the process of regulating the conduct of personnel, which leads to achievement of the objective pursued by the executive: the process takes place in the system of organizational dependence.

Management is also the sphere of practical activity (specific profession performed by officers, managers, etc.) in which it is necessary to solve a number of problems concerning the organization and functioning of modern institutions. It is also discipline of knowledge, which follows the practice, developing general concepts and methodological solutions in response to the demands by managers

Basic Management Functions

Management is structured process of planning, organizing, human resource management, and control performed to achieve common goals. The process of using of the organization's resources to achieve its objectives through the functions of planning and decision making, organizing, leadership and control.

There are four basic management functions: planning, organizing, leading and motivating and controlling.

  1. Planning is setting the goals (aims, objectives) for the organization, resource allocation and making decision how to accomplish them. It is the first function of management because all the others depend on it.
  2. Organizing is second major function of management which involves grouping of resources and activities to perform some end result in an effective and efficient manner, task allocation, coordination, communication, etc.
  3. Leading and motivating - refers to human resources within an organization. Leading can be defined as the process of influencing (encouraging) people to work to achieve common goals. Motivating encompasses providing reasons for people to work in the best interests of an organization. Leading, inspiring and motivating together are often referred to as directing.
  4. Controlling is the last step of the management process. Controlling can be defined as regulating and evaluating ongoing activities to ensure that goals are accomplished. This function involves three steps: setting standards, measuring actual performance and taking corrective action (if necessary).

Levels of management

Managers can be classified according to their level within an organization:

  1. Top-level managers - also called as “executives”; guiding and controlling the overall fortunes of an organization; job titles associated with this level of management are: president, vice president and CEO (chief executive president);
  2. Middle managers - involving the largest group of managers; job titles associated with this level of management are: department head, production manager, chief engineer, commercial manager.
  3. First-line managers - supervising the actions of operating employees; job titles associated with this level of management are: assembly supervisor, billing supervisor, office manager.

Main areas of interest of modern managers

See also:

Examples of theories of management

  1. Scientific Management Theory: Developed by Frederick Taylor, this theory seeks to find the most efficient way of organizing and performing tasks. It focuses on breaking down tasks into their most basic steps, and analyzing them to identify the most efficient way to complete the task. This theory is also referred to as Taylorism.
  2. Bureaucratic Theory: Developed by Max Weber, this theory looks at the organization as a bureaucratic system. It emphasizes the importance of rules and regulations, as well as hierarchy, specialization, and formal communication.
  3. Human Relations Theory: Developed by Elton Mayo, this theory emphasizes the importance of interpersonal relationships in the workplace. It focuses on the role of communication, motivation, morale, and job satisfaction for creating a productive work environment.
  4. Systems Theory: Developed by Ludwig von Bertalanffy, this theory looks at the organization as a series of interrelated systems, rather than as a collection of individuals. It looks at how the organization works as a whole, taking into account its environment, structure, and culture.
  5. Contingency Theory: Developed by Fred Fiedler, this theory looks at how a leader’s style interacts with the situation. It emphasizes the importance of choosing the right leadership style to fit the situation, in order to achieve the best results.

Advantages of Theory of management

The Theory of Management provides a number of advantages for businesses, including:

  • Improved Efficiency: By outlining specific processes and procedures, the Theory of Management helps to streamline operations and reduce unnecessary steps. This can lead to greater efficiency and cost savings.
  • Improved Communication: Through better organization, the Theory of Management facilitates communication between departments and employees. This can help to ensure that everyone is on the same page and working towards the same goals.
  • Increased Productivity: By providing a framework for the organization of tasks, the Theory of Management can help to make employees more productive. With a better understanding of how tasks should be done and how they fit into the overall goals of the organization, employees can be more focused and effective.
  • Improved Decision Making: By providing a clear structure for decision-making, the Theory of Management helps to ensure that decisions are made quickly and effectively. This can help to minimize delays and ensure that the organization is able to move forward quickly.
  • Improved Organization: By outlining processes and procedures, the Theory of Management helps to ensure that organizations are well organized and that tasks are completed in an efficient manner. This can help to reduce confusion and ensure that everyone is working towards the same goals.

Limitations of Theory of management

The Theory of Management has several limitations which must be taken into account when applying it within a business setting. These limitations include:

  • Subjectivity: Management theory can be subjective in nature, as there is no single set of rules or guidelines that can be applied across all organizations. Each organization must take into account its own unique circumstances and develop a management strategy that is suitable for its needs.
  • Complexity: As organizations become more complex, the management of them can become more difficult. This is because the interrelated processes and activities must be managed in a coordinated manner, which requires considerable time and effort.
  • Change: The Theory of Management does not account for changes in the external environment. Organizations must be able to react quickly to changes in the external environment and adjust their management strategies accordingly.
  • Culture: Management theory does not take into account the specific culture of an organization. Different organizations may have different cultures and values which must be taken into account when developing a management strategy.
  • Technology: Management theory does not take into account advances in technology. The use of technology can have a major impact on how organizations are managed, so it is important to consider this when developing a management strategy.

Other approaches related to Theory of management

  • Systems Theory: Systems Theory looks at organizations as interconnected parts that interact and influence one another in order to achieve a common goal.
  • Behavioral Theory: Behavioral Theory suggests that an organization should consider the behavior of its employees as an important factor in the success of the organization.
  • Contingency Theory: Contingency Theory states that the effectiveness of an organization’s management is dependent on the circumstances of the situation.
  • Sociotechnical Systems Theory: Sociotechnical Systems Theory uses a combination of social and technical approaches to analyze and improve the performance of an organization.
  • Total Quality Management: Total Quality Management is a management approach that focuses on continual improvement of processes and products in order to meet customer needs.

In summary, Theory of management encompasses a variety of approaches that focus on the organization’s resources and aim to achieve its objectives in an efficient and effective manner. These approaches include Systems Theory, Behavioral Theory, Contingency Theory, Sociotechnical Systems Theory, and Total Quality Management. Each of these theories looks at different aspects of management and suggests different approaches to improving organizational performance.


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