Modern management is the managerial era that began in the 1890s with Frederick Taylor, who advocated abandoning old practices for better management practices that were empirically supported.
This management theory holds that companies can fully improve the performance of unskilled workers by first looking at work processes and developing best practices.
Modern management is based on Adam Smith’s theory of division of labor, which ensures that each worker becomes increasingly skilled at a specific task, allowing them to be as productive as possible.
This management is more focused on the psychological and sociological aspects of human relationships, using Maslow’s motivational theories and ideas about how organizational structure interferes with satisfaction.
The formation of large companies caused management to separate from ownership, with salaried managers instead of proprietary managers. By passing control to contracted management, management methods were used more widely.
modern management theory
These are the considerations involved in favorable management strategies. They can include tools such as standards and procedures that can be implemented in today’s companies.
Scientific theory of management
This theory created by Taylor highlights that having to force people to work hard is not the best way to optimize results. Instead, he recommends simplifying tasks to increase productivity.
The following strategy is different from how business has been done before. Initially, a manager had only minimal contact with his workers. There was no way to standardize the rules of the workplace, and the only motivation of employees was safety at work.
As money was the main incentive to work, Taylor developed the concept of “fair wages for a fair day’s work”. The resulting collaboration between employees and employers became the teamwork that is now appreciated.
Systems Administration Theory
It has another methodology for business administration. He claims that a company is made up of a wide variety of elements that operate in a balanced way so that the system as a whole can function optimally.
According to this theory, the success of a company depends on these fundamental components: synergy, relationship and dependence between different systems. One of the most important parts of the company are the workers, in addition to the departments and workgroups.
Contingency Management Theory
This theory is primarily based on the fact that no one management approach fits all organizations. There are a number of external and internal factors that will affect the management approach you choose.
He claims that the characteristics of a leader are directly related to the effectiveness with which he leads. For every type of situation, there is a set of useful leadership characteristics.
Therefore, a leader must be flexible enough to adapt to a changing environment. This theory can be summarized as follows:
– There is no specific technique for managing an organization.
– A leader must quickly identify the specific management style appropriate for a specific situation.
Principles and tools
The principles were explained in the early 20th century by a group of pioneering management thinkers such as Henri Fayol, Lyndall Urwick, Luther Gullick, and Max Weber.
While each of these theorists had a slightly different opinion on the philosophical underpinnings of modern management, they all agreed on principles.
This agreement is not surprising, as they all focused on the same problem: how to maximize operational efficiency and reliability in large organizations. Today, this remains the only problem that modern management is competent to solve.
standardization
Minimize variations in standards around inputs, outputs and working methods. The objective is to build economies of scale, with efficiency, reliability and quality in manufacturing.
Specialization of tasks and functions
Group similar activities into modular organizational units to reduce complexity and accelerate learning.
target alignment
Set clear goals through a cascade of secondary goals and supporting metrics. Make sure that individual top-down efforts are consistent with goals.
Hierarchy
Create a pyramid of authority based on a limited range of control. This should maintain control over a wide scope of operations.
Planning and control
Forecast demand and budget resources, as well as schedule tasks and then follow up to correct deviations from the plan. Regularity and predictability in operations must be established, in accordance with the plans.
rewards
Financial rewards must be provided to individuals and teams for achieving specific results, motivating efforts, and ensuring compliance with policies and standards.
Importance
Maximize employee productivity
It helps companies maximize production by using human resources to their fullest potential. Thus, companies do everything possible to develop workers with maximum efficiency.
Simplify decision making
Max Weber theorized that hierarchical systems encourage informed decision making. In the 1990s, the hierarchical theory of delay emerged.
The Institute for Employment Studies claims that leveling the hierarchy would reduce communication channels, encourage innovation, accelerate decision-making, and also create an environment where managers are more involved in production. This eliminates overhead and reduces bureaucracy.
Increase team participation
Modern management theories are concerned with interpersonal relationships in the workplace. Therefore, companies have given employees more influence in decisions.
Think objectively through scientific processes
Scientific management theories hold executives accountable for scientific processes, rather than simply relying on their judgment. When management strategies are implemented, others in the company will be able to test the effectiveness of those strategies and determine if they are effective.
This prevents management from making snappy decisions. Therefore, it encourages scientifically proven changes to increase worker productivity.
Adapt to global changes
Theories of globalization take into account the changes taking place around the world, as well as how these changes influence business.
They argue that the business world is becoming increasingly interconnected and many companies are doing business with other international companies, investing, hiring workers and also managing distribution chains abroad.
