Administrative Theories | Managemant Theory

This theory is concerned with Management principles and functions. It focus on managing the total organization. Henry fayol is the main proponent of this theory.  This theory states " Management can be studied in terms of process " . Management consists of  :-

1. BUSINESS ACTIVITIES :- 

This theory classified all business activities into six categories.
  • Financial :- Activities related to search of fund
  • Accounting :- Recording Final transaction
  • Security :- Related to property and people
  • Technical :- Related to production of good
  • Managerial :- planning , organizing  , commanding, controlling
  • Commercial :- Related to buying and selling

2. PRINCIPLES OF MANAGEMENT :-

This theory developed 14 principle of Managemant 

1. Division of work :- specialization of work results in efficiency.

2. Authority and responsibility :- Authority flow Responsibilities. It is needed to carry Responsibilities without Misunderstanding

3. Discipline :- obedience and respect for agreement

4. Unity of command :- one employee one boss . 

5. Unity of direction:- one plan and one head for group activities

6. Remuneration :- Fair and equal wages to employees

7. Centralization :- Centralized power structure . Power should be distributed according to Responsibility

8. Equity :- fairness and justice should be followed by managers

9. Stability of tenure :- job security should be provided

10. Initiative :- Managers should Always initiate workers to work hard and get reward

11. Espirit De corpse :-  unity is strength.

12. Order :- Right material and employees are necessary for each organizational function

13. Sub - ordination of individual interest :- interest of organization should be above interest of individual

14. Scalar chain :- Order , Structure should be flown from top to bottom in a chain and Responsibility from bottom to top

3. MANAGEMENT FUNCTION :- 

This theory state Managemant perform functions.:- 

1. Planning

2. Organizing

3. Monitoring

4. Commanding

5. Co - ordination

4. MANAGERIAL SKILL :-

This theory state Managemant is a skill that can be learned :-

1. Technical

2. Educational

3. Conceptual

4. Education

5. Experience

6. Human

CONTRIBUTIONS AND ADVANTAGES OF MANAGEMENT THEORY :-

1. This theory regarded Managemant as profession.

2. This theory identified skill needed for Management

3. This theory lay universal Principe of Management

4. This theories identified Managemant function for first time 

DISADVANTAGES OF MANAGEMENT THEORY :-

1. Less applicable in complex and dynamic organization.

2. Principles of management are not applicable in all situations.

3. This theory is based on personal experience

4. To divide business activities into six group is not enough.

5. The theory has not given emphasis on human behaviour.

6. Human behaviour cannot be controlled by rules.






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