Modern Theory of Management

What Is The Modern Theory of Management?

The Classical Management Theory asserts that only money motivates employees. That, however, is an inadequate proposition, and the Modern Theory of Management came up in response to it. According to the concept of modern management, employees are motivated by several different factors.

It’s important to understand what is the modern theory of management in a larger sense. The modern theory of organization uses mathematical analysis combined with an objective understanding of the range of human emotions and motivation. A manager then can use mathematics and statistics to gauge an employee’s motivation and measure their performance. Essentially, it is about understanding what makes an employee tick.

There are three parts in the modern theory of management: Quantitative, Systems and Contingency.

Benefits Of Modern Theory of Management

Here are the benefits of the modern theory of management:

Increases Productivity

The different theories of modern management educate leaders on maximizing the value of their human resources. In other words, rather than spending money on new equipment or a new marketing strategy, businesses should focus on training their employees.

Strengthens Decision-Making Abilities

When evaluating an organization or a department, managers can use modern management theories as a guide. Managers who know what to look for are better able to spot issues and begin formulating solutions. They can also use mathematical techniques to help them come to final decisions and support their solutions.

Increases Employee Engagement

The concept of modern management looks at motivational elements other than money. Through this, managers can identify and implement processes that take into account the needs and wants of their employees. As a result, employees’ morale and engagement will rise and they’ll be more likely to stay on with the organization.

Gives Managers An Objective View of Things

Mathematics plays a vital role in modern management theory. Objective data that’s appropriately analyzed never lies. On the other hand, using personal feelings to make decisions can backfire. Moreover, managers can test a variety of options to see which one best serves the organization. As a result, managers will be much more equipped to implement efficient and effective solutions after studying the modern theory of management.

Increases Adaptability

Modern management theory understands that organizations today frequently operate in dynamic environments. According to this theory, managers should be prepared to use various methods and approaches to deal effectively with their organizations’ internal and external influences. New technology and statistical modeling can be used to improve processes and develop solutions, for example.

These benefits have made this approach a popular practice for many organizations and their managers. Usually, a manager would apply one of the three prominent types within their organization.

Types Of Modern Theory of Management

There are three types of modern theories of management:

Quantitative Theory

Amid World War 2, military leaders from the United States and the United kingdom assembled a team of managers, government administrators and scientists to help them determine how to make the most efficient use of available resources. Experts used Taylor and Gantt’s mathematical and statistical approaches from various fields to solve these logistical issues. Thus, the quantitative theory of management was developed.

In this modern theory of organization, managerial decision-making is aided by the use of statistical methods. However, this concept of modern management isn’t sufficient to run an organization. A humanistic approach and an understanding of human motivation are also needed to make the best use of the workforce.

Systems Theory

The Systems Theory of Management opens up a new world for managers and gives them a new management approach. This modern theory of organization proposes that a business comprises different parts that have to work in synergy to perform efficiently. Thus, it emphasizes synergy and interrelation between the various limbs of an organization.

According to this concept of modern management, having a good workforce is critical to an organization’s success. All the departments and sub-units of an organization are crucial to its long-term viability and growth. Managers in the real world are expected to analyze their organization’s patterns and events to figure out the best management strategy. As a result, they can work together on a variety of projects.

Contingency Theory

The contingency theory of management says that no single management strategy works for every organization. Instead, many internal and external factors have an impact on the management strategy that’s ultimately chosen. This modern theory of organization believes that there are three things at play when figuring out a management strategy: the size of an organization, the technology it uses and the leadership style.

Fred Fiedler developed this concept of modern management. According to Fiedler, leadership qualities are directly linked to how well a leader manages their team. Every situation has its own set of leadership traits, according to Fiedler’s theory. Furthermore, it implies that a leader must be agile enough to change with the times. It can be summarized as follows:

There is no one-size-fits-all approach to running a business

A leader must be able to quickly determine which management style is best suited to a given situation

The least-preferred coworker scale (LPC) is the foundation of Fiedler’s contingency theory. LPC is used to evaluate a manager’s orientation

Now that we’ve covered the basics of these theories, let’s learn how to apply them in your professional life.

Become A Better Manager

Now that you know the answer to ‘what is the modern theory of management?’, you’ll be able to apply these learnings and create the perfect management strategy for your organization.

Modern managers need to upgrade their knowledge and skills to manage optimally continuously. A growth mindset is a must to climb the ladder of success. The modern theory of management can help managers stay agile. Likewise, Harappa’s Manage Projects Expertly pathway will help you identify the aspects of management that you need to improve on, apply life’s learnings to workplace situations and become as agile and efficient as you wish to be. Sign up today.