3 Types of Modern Management Theories Explained

Management theories are the recommended management strategies that allow us to better understand and approach management. Many management frameworks and guidelines have been developed over the past four decades. Early management theories base leadership on a system of reward and punishment. Management theories can be classified into three types: modern management theory, quantitative approach, systemic approach, and contingency approach.

Modern management theory emphasizes the use of systematic mathematical techniques to analyze and understand the interrelationship of management and workers in all aspects. It recognizes that effective managers must be adaptable to unique situations and circumstances. Whether they motivate employees, make decisions, allocate resources, or negotiate agreements, managers are vital to companies. The quantitative approach considers the organization as a whole, simultaneously examining all the relevant organizational variables.

The main objective of this approach is the interdependence and interrelationship of the various subsystems from the point of view of the effectiveness of a larger system. Under this approach, it is possible to highlight the interrelationships in the various functions, such as planning, organizing, directing, and controlling. This approach is better than others because it is close to reality. The systemic approach helps to study the functions of complex organizations and has been used as the basis for the new type of organization, such as the project management organization.

This approach is often referred to as abstract and vague. It cannot be easily applied to practical problems and does not provide tools or techniques for executives. The contingency or situational approach was developed by J. W.

Lawrence in 1970, who criticized other approaches that presupposed “the best way to manage”. Management issues are different in different situations and must be addressed depending on the demand of the situation. The best way to do this can be useful for repetitive things, but not for management problems. This approach emphasizes the fact that what managers do in practice depends on a given set of circumstances (a 26% contingency situation).

It not only takes into account the given situations, but also the influence of a given solution on the behavior patterns of a company. Under this approach, managers must develop methods, tools, or action plans that vary depending on the specific situation or contingencies as they develop. In practical life, managers have to make quick decisions without waiting to receive full information and develop models. A manager who practices classical management theory would focus on improving production and rewarding high-performing employees through salaries or bonuses. A manager who practices modern management theory could use statistics to measure performance and encourage cross-functional cooperation.

A manager who practices behavior management theory could motivate teamwork by encouraging a collaborative atmosphere. The development of technology and the introduction of computers have brought mathematics and management closer together. It is necessary to anticipate and identify the contingency by improving the manager's diagnostic skills and acumen. It is the management of the organization's valuable human, physical, financial, and other resources in an effective and efficient manner to achieve business objectives.

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