Essential Management Theories With Suitable Example?

At its creation, Systems Theory (The Systems Approach) had nothing to with business management and everything to do with biology.

That’s because Ludwig von Bertalanffy (1901-1972) – a biologist at the time-founded general systems theory (GST) in an attempt to refute reductionism and revive the unity of science.

The premise of general systems theory is that a system is composed of interacting elements that are affected by their environment.

Because of this interaction, the system as a whole can evolve (develop new properties) and self-regulate (correct itself).

When applied to business, experts shorten “general systems theory” to just Systems Theory. In actual fact, Systems Theory is more a perspective than a fully formed practice.

Systems Theory encourages you to realize that your business is a system and is governed by the same laws and behaviour’s that affect every other biological organization.

This introduces such concepts as Entropy -The tendency for a system to run down and die (A thing to be avoided in business)

Synergy- Working together, the parts can produce something greater than those same parts could produce on their own Subsystem the whole (Your business) is built on subsystems, which themselves are built on yet more subsystems.

Because it is a way of looking at your business rather than a concrete management process, you can use Systems Theory in concert with the other management theories on this list.

Principles of Administrative Management?

Miner and engineer Henri Fayola (1841-1925) developed his principles of administrative management as a top-down approach to examining a business.

He put himself in his manager’s shoes and imagined what situations they might encounter when dealing with their team.

From this, he concluded that his managers and indeed management in general it, has six responsibilities when it came to managing employees.

  • Organize
  • Command
  • Control
  • Coordinate
  • Plan
  • Forecast


With those responsibilities in mind, Fayola developed 14 principles of administration that influence how managers should lead their teams.

These principles, which range from the importance of maintaining a clean facility to the value of initiative and teamwork, are the foundation for many of today’s most successful businesses.

Quantitative Management?

Quantitative Management Theory is an offshoot of Modern Management Theory developed during World War II in response to managerial efficiency.

Quantitative Management Theory brought together experts from scientific disciplines to address staffing, materials, logistics, and systems issues for the U.S. military.

The clear-cut, numbers-oriented approach to management (which applies to business as well) helped decision makers calculate the risks, benefits, and drawbacks of specifications.

This shift toward pure logic, science, and math is tempered by the belief that these mathematical results should be used to support, not replace, experienced managerial judgment.

Organizations as Learning Systems?

Organizations as Learning Systems Management Theory is fairly new when compared too many of the other theories on this list.

Organizations as Learning Systems Management Theory-sometimes called Integral or Holistic Management Theory are still in use today.

Developed as a postmodern response to many of the older management theories that it starts with the idea that the business is a system that is built on a succession of subsystems.

In order for the business to run smoothly and efficiently, each subsystem must also work smoothly and efficiently within itself, but also with the other subsystems around it.

In this theory, managers are responsible for coordinating the cooperation necessary to ensure the larger “organism” continues to function successfully.

Learning and change are major components of this theory, and learning is encouraged and made available to everyone not just middle and upper-management.

The emphasis in this theory is on teamwork, participation, information sharing, and individual empowerment.

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