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Updated Nov 06, 2023

Popular Management Theories Decoded

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Bennett Conlin, Staff Writer

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More goes into managing a team than meets the eye. To successfully lead a business, you should appeal to employees through numerous methods, including emotional and financial incentives. Employees tend to appreciate authentic managers who value them as people and professionals, whereas some of the earlier management theories didn’t value kindness or work-life balance.

Management is a constantly evolving field, and it’s both an art and a science. Most modern-day workplaces seamlessly integrate multiple management theories to ensure optimal employee output. While many of these systems are hybrids of multiple theories and strategies, there are a few famous strategies that managers have studied for decades.

What are management theories?

“Proper management” is a tricky term. Not every employee, and certainly not every group of employees within a company, responds the same way to various managerial tactics. The best managers are able to use a variety of styles when dealing with different people, while still applying one or two major guiding philosophies for leading a team. This can make modern management challenging.

However, managers can use management theories to help guide them through the process. 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.

Early management theories were rooted in a system of rewards and punishments, where success received recognition and failure led to reprimands. These theories have been widely adopted by business leaders to manage their employees’ performances. 

Here are the three most commonly used theories in business management today:

  1. Classical Management Theory is based on an employee’s physical and economic needs. It advocates for labor specialization, centralized leadership and maximized profit. 
  2. Behavioral Management Theory, or the human relations movement, emphasizes understanding human behavior at work for enhanced productivity. It focuses on motivational factors like conflict resolution, expectations and group dynamics. 
  3. Modern Management Theory uses techniques in math, such as the Quantitative Approach, System Approach and Contingency Approach, to analyze manager-employee relationships.

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 don’t always tell the whole picture when it comes to effective leadership. [Read how to turn change management into personal development

Management theory infographic

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You can empower your employees through human relations theory by fostering relationships, creating collaboration and giving them the power to make decisions.

What management theories teach us about business

Management theories popularized in the early to mid-1900s weren’t perfect. That’s unsurprising, as different theories of management have gained steam in recent decades. 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.

“In the real working world, few managers and business leaders consciously use management theories as rigid frameworks to adhere to or as long-term guiding principles,” said Kay. “That said, many do attempt to consciously incorporate individual elements of their preferred management theories into their broader management style.”

When implementing management theories, you should understand that no two employees or businesses are the same. A certain style may offend one employee, while another employee may respond beautifully. Management is both an art and a science, and being an effective manager requires more than an understanding of certain theories. How they put those theories into practice is what separates good managers from bad ones.

Lauren Kubiak contributed to this article. Source interviews were conducted for a previous version of this article.

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Bennett Conlin, Staff Writer
Bennett is a B2B editorial assistant based in New York City. He graduated from James Madison University in 2018 with a degree in business management. During his time in Harrisonburg he worked extensively with The Breeze, JMU’s student-run newspaper. Bennett also worked at the Shenandoah Valley SBDC, where he helped small businesses with a variety of needs ranging from social media marketing to business plan writing.
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