Essential Management Theories and the Thinkers Behind Them

What are management theories?

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.

It’s common for managers to use more than one theory to achieve productivity or organizational goals. Managers should understand these different theories and know how to implement them, while also realizing past management theories leave gaps when it comes to effective leadership. [Read how to turn change management into personal development]

Scientific management theory – Frederick W. Taylor

Frederick W. Taylor’s scientific management theory revolutionized industrial efficiency by applying systematic, data-driven approaches to work processes, fundamentally changing how organizations think about productivity and worker performance.

Origin and principles

Frederick W. Taylor (1856-1915) developed scientific management theory during the 1880s and 1890s within manufacturing industries, particularly in steel production. Taylor was an engineer, and he experimented to determine the most efficient and effective ways to get tasks done.

Taylor’s scientific management theory consists of four core principles that form the foundation of systematic workplace efficiency: 

1. Develop a science for each job. Instead of relying on old habits or guesswork, managers should carefully study tasks and establish the most efficient method for completing them.
2. Select and train workers scientifically. Employees should be chosen based on their abilities and then thoroughly trained in the best way to perform their tasks, rather than being left to figure things out on their own.
3. Cooperate with workers to ensure methods are followed. Managers and workers should collaborate so that the standardized methods are actually used in daily work, creating consistency and efficiency.
4. Divide work and responsibility. Managers should handle planning and analysis, while workers focus on executing tasks. This separation ensures each group concentrates on what they do best.

Key contributions

On the surface, this theory held great value. The scientific theory aimed to make work more efficient. Taylor’s approach introduced revolutionary concepts including time and motion studies, functional foremanship, standardization of tools and movements, and cost accounting methods that transformed industrial management.

Taylor made significant contributions to various fields including work measurement, production planning and control, process design, quality control, ergonomics and human engineering, leading to what many consider an intellectual revolution in organizational management.

Human relations theory – Elton Mayo

Elton Mayo’s human relations theory emerged from groundbreaking workplace experiments that demonstrated the profound impact of social factors and employee relationships on productivity, challenging purely mechanistic approaches to management.

Origin and principles

Elton Mayo’s human relations management theory originated between 1924 and 1932 during experiments conducted at the Hawthorne plant of the Western Electric Company in Cicero, Illinois, with Elton Mayo (1880-1949) becoming involved in 1927 and eventually popularizing the subject.

Mayo’s human relations theory, also known as the Hawthorne Effect, emphasizes relationships. It demonstrated that motivation is improved by showing interest in others, involving others in decision making, ensuring the wellbeing of others, ensuring work is interesting and non-repetitive, promoting greater communication and fostering good teamwork.

Key contributions

Mayo believed that workers are not just concerned with money but could be better motivated by having their social needs met while at work – something that Taylor’s scientific management theory ignored. The theory emphasizes that management must acknowledge the significance of the human factor in increasing efficiency at work and must base decisions on human considerations rather than just physical-technical ones.

Bureaucratic theory – Max Weber

Max Weber’s bureaucratic theory provided a systematic framework for organizing large-scale operations through standardized rules and clear hierarchical structures, establishing many principles still used in modern corporate governance.

Origin and principles

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.

Weber’s theory includes the five principles described below:

• Task specialization: Weber stressed the importance of each employee fulfilling a specific role within a company.
• Hierarchy: Weber wanted each company to have a clear hierarchy within the organization.
• 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.
• 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.
• Impersonality: The rules and regulations make a business structure impersonal. Promotions aren’t about emotions or personal ties but rather performance.

Key contributions

Weber’s bureaucratic model provided a systematic approach to organizational structure that emphasized merit-based advancement, standardized procedures and clear authority relationships that could scale effectively across large organizations.

Administrative theory – Henri Fayol

Henri Fayol’s administrative theory established the fundamental functions of management and comprehensive principles that continue to guide organizational leadership, making him one of the founding fathers of modern management education.

Origin and principles

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:

• Forecasting
• Planning
• Organizing
• Commanding
• Coordinating
• 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 powers. 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.

Key contributions

Fayol’s administrative theory provided the foundational framework for modern management functions and established principles that remain relevant in contemporary organizational design, particularly around equity, remuneration and employee engagement.

Modern and contingency management approaches

Modern management theory evolved beyond classical approaches to embrace situational flexibility and systems thinking, recognizing that effective leadership requires adapting strategies based on specific organizational contexts and environmental factors.

Contingency theory

The contingency approach to management, grounded in Fred Fiedler’s contingency theory of leadership effectiveness, is a perspective that says there is no single best way to lead or organize a business. Instead, the right management style depends on the specific situation a company is facing, such as the type of task, the size of the organization, the external environment or the skills of the employees. This approach emphasizes flexibility, requiring managers to assess the circumstances before deciding on the most effective strategy, structure or leadership style to use.

In practice, the contingency approach means managers must be adaptable problem-solvers rather than relying on fixed rules or one-size-fits-all methods. For example, a highly structured and directive management style might work well in a crisis or with new employees who need close guidance, while a more participative and collaborative style may be better for experienced teams working on complex projects. By recognizing that effectiveness depends on the situation, this approach encourages managers to think critically and adjust their actions to achieve the best outcomes.

Systems theory

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.

Theory X and Y

Douglas McGregor’s X & Y theory 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.

Why these theories matter in the digital age

In today’s rapidly evolving digital landscape, classic management theories provide essential foundations that leaders can adapt to meet contemporary challenges including remote work, artificial intelligence integration and changing employee expectations.

Digital transformation requires leaders to be highly adaptable and open to constant change, navigating technological advancement while maintaining effective team relationships. The digital era emphasizes continuous learning and development to stay ahead of technological advancements, with leaders needing to understand emerging technologies’ impacts on their management duties.

Modern organizations benefit from integrating multiple theoretical approaches rather than adhering rigidly to single frameworks. 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.

For example, while Taylor’s scientific management principles remain valuable for process optimization in digital workflows, they must be combined with Mayo’s human relations approach to address remote work challenges and maintain team cohesion in virtual environments.

Lauren Kubiak contributed to this article.