Evaluation Of Management Theory Commerce Essay

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More broadly, management is the process of designing and zmaintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims (Koontz and Weihrich 1990, p. 4). In its expanded form, this basic definition means several things. First, as managers, people carry out the managerial functions of planning, organizing, staffing, leading, and controlling. Second, management applies to any kind of organization. Third, management applies to managers at all organizational levels. Fourth, the aim of all managers is the same - to create surplus. Finally, managing is concerned with productivity - this implies effectiveness and efficiency.

Thus, management refers to the development of bureaucracy that derives its importance from the need for strategic planning, co-ordination, directing and controlling of large and complex decision-making process. Essentially, therefore, management entails the acquisition of managerial competence, and effectiveness in the following key areas: problem solving, administration, human resource management, and organizational leadership.

Classical management theory

The classical school is the oldest recognised school of thought management. Its roots predate the twentieth century. The classical school of thought usually worries ways to manage work and organizations more professionally. Three parts of study that can be gathered below the classical school are systematic management, managerial management, and administrative management.The classical school has tried to define the essence of management in the form of universality of the fundamental functions. These, it was hoped, would be the basis for a set of cognitive skills relevant to be acquired by all aspiring managers through formal education.Body Management classical school of thought was based on the belief that employees are only physical and economic needs, and social needs and the need for job satisfaction, either do not exist or are not important. Consequently, this school advocates a high specialization of labor, centralized decision making and profit maximization. See also the behavior of the school management, contingency school of management, quantitative school management and school management systems.

Approaches of classical theory:

Scientific-The scientific method is the procedure by which experts, together and over time, trying to build an truthful demonstration of the world.

Distinguishing that personal and cultural principles influence both our observations and our analyses of natural occurrences, we have intention through the use of actions and standards to diminish those effects in the expansion of a theory, the scientific method tries to diminish the influence of preference or partiality in the transformer when testing a theory or a concept.

Administrative- Whereas scientific management focused on the productivity of individuals, the classical administrative approach concentrates on the total organization. The emphasis is on the development of managerial principles rather than work methods.Contributors to this school of thought include Max Weber, Henri Fayol, Mary Parker Follett, and Chester I. Barnard. These theorists studied the flow of information within an organization and emphasized the importance of understanding how an organization operated.

Henri Fayol

Henri Fayol (1841-1925) is generally viewed as the creator of the school of classical music management - not for the reason that he was the first to examine managerial behavior, but because it was the first to organise. Fayol thought that the practice of sound management falls into definite outlines that can be recognized and examined. From this basic idea, developed a project manager for a coherent doctrine, one that retains much of its force today.With his trust in scientific approaches, Fayol was just like Taylor, his contemporary. While Taylor was basically anxious with organizational functions, however Fayol was involved in the entire focused on the association and organisation, which in his judgment had been the most neglected of the operations of the company.The fourteen ethics of management Fayol "more regularly had to apply." Before Fayol, it was usually believed that "managers are natural, not made." Fayol worried, however, that the management was a ability like any other - that can be showed once the basic ethics are implicit.

Principles of Henri Fayol

Discipline: Agreement and respect within an organization are totally essential . good discipline requirements managers to apply permissions if damages are obvious .

Control unit: An employee should obtain orders from only one greater.

Unit address: Organizational activities must have a central authority and a strategy of action.

Reduction of individual interest to general interest: The benefits of an employee or group of employees are subsidiary to the benefits and aims of the organization.

Staff Salary: Salaries - the worth of services provided by employees - should be fair and give fulfilment for both the worker and the company.

Centralization: The objective of subsidiarity is the best procedure of staff. The degree of centralization varies liable on the subtleties of each organization.

Scalar Chain: A chain of expert exists from the uppermost authority for the organization of the lower positions.

Order: the instruction of organization of materials and personnel is crucial. Suitable resources and the right people are desired for each function of the organization and action.

Equity: In organizations, equity is a mixture of kind-heartedness and fairness. Both equity and equal action should be measured when dealing with employees.

Stability of contract of personnel: To make best use of staff yield, a constant workforce is required.

Initiative: Think a proposal and ensuring its accomplishment is a very strong motivator. The passion, energy and creativity are preferred at all levels of the scale of the organization.

Esprit de corps: Co-operation is important for an organization. Work teams and general face-to-face verbal communication inspires teamwork

Bureaucratic management- In late 1800, Max Weber disliked that many European organizations are managed "personal" family basis and that employees were loyal to individual supervisors and the organization. He believed that organizations should be managed impersonal and formal organizational structure, where specific rules were followed, was important. In other words, he did not believe that authority should be based on the personality of a person. He thought that the authority must be something that was part of the job of a person and is passed from one person to the left as one person and another took over. This is not personal, objective of the organization is called bureaucracy.

Weber believed that bureaucracies have all the following characteristics:

A well-defined hierarchy. All positions within a bureaucracy are structured in a manner that allows the highest positions to monitor and control the lower positions. This clear chain of command facilitates control and order throughout the organization.

The division of labor and specialization. All responsibilities of an organization are specialized so that each employee has the experience necessary to perform a particular task.

The rules and regulations. Standard operating procedures governing all activities of the organization to provide security and facilitate coordination.

Impersonal relationships between managers and employees. Managers should maintain an impersonal relationship with employees to favoritism and personal bias does not influence decisions.

Competition. The competition ", you know," should be the basis for all decisions made in the recruitment, placement and promotion in order to build capacity and merit as the main characteristics of a bureaucratic organization.

Records. A bureaucracy needs to maintain complete records of all their activities.

Neo classical management theories

1. Management of an organization is considered as a chain of inter-related functions. The study of the scope and features of these functions, the sequence through which these are performed and their inter-relationship leads one to draw principles of management suitable for universal application

2. Learning principles of management is done through the past experiences of actual practicing managers

3. As business environment consists of uniform cycles exhibiting an underlying unity of realities, functions and principles of management derived through process of empirical reasoning are suitable for universal application

4. Emerging new managers through formal education and case study can develop skill and competency in management concepts and practices

5. The clasasical approach also recognised the importance of economic efficiency and formal organizational structure as guiding pillars of management effectigveness.

6. Business activity is based on economic benefit. Organizations should therefore control economic incentives.

Human relation school

Human relations is regularly used as a general term to refer to the ways in which managers cooperate with their employees. When "employee management" motivates more and better work, the organization has effective human relations; when morale and efficiency deteriorate, its human relations are said to be ineffective. The human relations movement ascended from early attempts to steadily discover the community and emotional factors that would generate effective human relations. The classical school did not give status to the human characteristics of workers. Therefore, it did not touch a high level of making productivity and support between management and workers. The disaster of the classical approach managed to human relations movement. The human relations movement grew out of a famous series of studies conducted at the Western Electric Company from 1924 to 1933. These eventually became known as the "Hawthorne Studies" because many of them were performed at Western Electric's Hawthorne plant near Chicago. The Hawthorne Studies began as an attempt to investigate the relationship between the level of lighting in the workplace and worker productivity.

Quantitative or management science approach

During World War II, came mathematicians, physicists and other scientists together to solve military problems. Quantitative School of Management is the result of research conducted during World War II. Quantitative approach to management involves the use of quantitative techniques, such as statistics, and computer simulation models and information, in order to improve the decision-making process.

The essential characteristics of this approach are as follows:

(i) Management is essentially decision-making and an organization is a decision-making unit.

(ii) Organizational efficiency depends upon the quality of mana­gerial decisions.

(iii) A problem is expressed in the form of a quantitative or mathe­matical model containing mathematical symbols and relationships.

(iv)The different variables in management can be quantified and, expressed in the form of an equation.

System theory

The system approach to management views the organizations as a unified,

purposeful system composed of integral parts.

This approach gives managers A way of looking at the organization as a hole

and as a part of the larger external environment.

Systems theory tells us that the activity of any segment of an organization

affects ,in varying degree the activity of every other segment.

Production managers in a manufacturing plant,for example ,prefer long

uninterrupted production runs of standardized products in order to maintain

maximum efficiency and low costs.


Functions of Management or Management Functions

Management consists of the functions given below. It is based on Henri Fayol's thinking on

the functions of management.

1. Planning

2. Organizing

3. Leading



The first of the administrative functions is development. In this step the manager will create a complete action plan aimed at some administrative goal.For example, let's say Melissa the marketing manager has a goal of increasing sales during the month of February. Melissa needs to first spend time mapping out the necessary steps she and her team of sales representatives must take so that they can increase sales numbers. These steps might include things like increasing advertisements in a particular region, placing some items on sale, increasing the amount of required customer-to-sales rep contact, or contacting prior customers to see if they are interested in purchasing additional products. The steps are then organized into a logical pattern so that Melissa and her team can follow them.

Planning is an ongoing step and can be highly specialized based on organizational goals, division goals, departmental goals, and team goals. It is up to the manager to recognize which goals need to be planned within his or her individual area.

Planning is decision making process.

It is making decisions on future course of actions.

Planning involves taking decisions on vision, mission, values, objectives, strategies and policies of an organization.

Planning is done for immediate, short term, medium term and long term periods.

It is a guideline for execution/implementation.

It is a measure to check the effectiveness and efficiency of an organization.


The second of the managerial functions is organizing. This step requires Melissa to determine how she will distribute resources and organize her employees according to the plan. Melissa will need to identify different roles and ensure that she assigns the right amount of employees to carry out her plan. She will also need to delegate authority, assign work, and provide direction so that her team of sales representatives can work towards higher sales numbers without having barriers in their way.

Organizing involves determination and grouping of the activities.

Designing organization structures and departmentation based on this grouping.

Defining the roles and responsibilities of the departments and of the job positions within these departments.

Defining relationships between departments and job positions.

Defining authorities for departments and job positions.


Controlling is the final function of management. Once a plan has been carried out the manager evaluates the results against the goals. If a goal is not being met, the manager must also take any necessary corrective actions to continue to work towards that goal.

For example, if Melissa noticed that her team was behind in their sales half way through February, she will need to put in place necessary provisions to ensure the second half of February is twice as productive as the first half so that by the end the month, the original sales goal will be met or exceeded. Because the control process also includes setting performance standards for employees and continuously evaluating their job performances, Melissa will speak with each of her sales reps individually to review their performances.

It includes verifying the actual execution against the plans to ensure that execution is being done in accordance with the plans.

It measures actual performance against the plans.

It sets standards or norms of performance.

It measures the effective and efficiency of execution against these standards and the plans.

It periodically reviews, evaluates and monitors the performance.

If the gaps are found between execution levels and the plans, controlling function involves suitable corrective actions to expedite the execution to match up with the plans or in certain circumstances deciding to make modifications in the plans.


The third function of management is leading. In this step, Melissa spends time connecting with her employees on an interpersonal level. This goes beyond simply managing tasks; rather, it involves communicating, motivating, inspiring, and encouraging employees towards a higher level of productivity. Not all managers are leaders. An employee will follow the directions of a manager because they have to, but an employee will voluntarily follow the directions of a leader because they believe in who he or she is as a person, what he or she stands for, and for the manner in which they are inspired by the leader

The Fifth Function

Some have added a fifth function for managers known as staffing. Staffing is the task of evaluating, recruiting, selecting, training, and placing appropriate individuals into defined job roles. A manager must spend time evaluating his or her workforce needs, discovering where employees need to be added, trained, or removed, and then making those changes so that the organization can continue business as usual.