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12 Management Theories and How They’re Used

By Steve Smith

The information presented here is true and accurate as of the date of publication. DeVry’s programmatic offerings and their accreditations are subject to change. Please refer to the current academic catalog for details.

May 29, 2024

8 min read


Managers and supervisors in both large and small businesses are responsible for leading and motivating their teams. To get the best out of their workforce, they may pull from a particular management theory or a range of them in order to get the job done.


In this discussion, we will define what a management theory is, provide a detailed description of 12 different management theories and their defining elements, and look at the benefits of each theory when it’s applied in the modern workplace. 

What is Management Theory?

Management theories are collections of ideas that influence how an organization, business or team is guided and run. Leaders in business management are primarily responsible for laying out strategies to help their teams meet their goals. This often requires finding ways to motivate their team and pool resources for them. 

It’s up to managers to apply the management theory that best suits their organization’s culture. They can also select specific characteristics from different theories to arrive at a style that makes sense for them, their company culture, their employees and the work at hand.

Benefits of Management Theory

By studying established management theories managers may be able to find ways to increase productivity and improve their team members’ performance, simplify decision making and increase collaboration. 

Theories like the ones we’ll discuss in the next section may also help leaders maintain objectivity, and make informed, data-supported changes rather than relying exclusively on their own judgment or preferences. 

Types of Management Theories

Although some management theories were conceptualized long ago, their principles can still be applied effectively in today’s technologically advanced business landscape. 

Let’s take an in-depth look at 12 theories you should be aware of:

1. Scientific management theory

In the late 1800s, Frederick Taylor was one of the first to take a scientific approach to management theory in terms of how to maximize productivity. His principles suggested that the scientific method should be used to perform workplace tasks, rather than a system that relied upon team members’ judgement or personal discretion. 

Taylor theorized that by simplifying tasks, training team members thoroughly and encouraging cooperation between supervisors and employees, productivity could be increased.

2. Administrative management theory

This 19th-century theory was developed by mining engineer and senior executive Henri Fayol, who believed that managers should utilize a specific set of values to get the most out of their workforce.

Fayol outlined 14 principles for managers to use to organize and interact with their teams:

  • Division of work: Delegating responsibilities of a project to different team members allows them to focus on one specialized task, instead of dividing their attention across many. 

  • Authority and responsibility: A balance between authority, or the right to make management decisions, and the employee’s responsibility over their tasks should exist to obtain the best results. 

  • Unity of command: This principle asserts that employees receive direction from a single supervisor to avoid conflicting requests and to maintain hierarchy. 

  • Unity of direction: This principle ensures that employees working on the same project are working toward the same objectives. Departmental managers are responsible for coordinating and communicating clear directions to their teams.

  • Equity: The equity principle was meant to cultivate an environment where everyone is treated equally and with kindness. 

  • Order: This principle ensures that things run smoothly, by pairing the right person with the right job, improving the working atmosphere and boosting productivity.

  • Discipline: This principle encourages order within the organization, and outlines rules that the workforce should follow. It also encompasses managers showing disciplined behavior and leading by example.

  • Initiative: This principle allows for employees to develop and launch initiatives that inspire them, as long as they do not conflict with organizational rules or values.

  • Remuneration: This refers to fair remuneration, or payment, for employees, promoting productivity and loyalty. It can also encompass the value employers feel that they are getting from their workforce. 

  • Stability: The stability principle asserts that employees must feel they have job security to function efficiently, which will encourage them to stay at the company longer and be more productive. This includes being given time to adjust to their positions, not being moved between teams too frequently and being able to develop their work rhythms.

  • Scalar chain: This ensures that employees know who to contact to communicate up the management chain and establishes company hierarchy.

  • Subordination of interest: Harmony must exist throughout an organization. Managers should prioritize the interests of the organization as a whole over any one individual’s needs.

  • Esprit de corps: This phrase expresses a feeling of pride. Managers should look for ways to encourage teamwork, generate enthusiasm among their teammates and direct reports, and reward outstanding performance to make this feeling grow.

  • Centralization and decentralization: Centralization typically has a select few making decisions for the many, often at the highest levels of leadership. Decentralization is when decisions are made by an organization as a whole. According to Fayol’s philosophy, an effective organization delegates the ability to make decisions to different employees, thereby maintaining balancing centralization and decentralization. 

3. Bureaucratic management theory

In creating his bureaucratic management theory, German sociologist Max Weber thought that the ideal business structure was based on a hierarchy with a clear chain of command. He also believed this structure should feature:

  • A clear division of labor with specialized employees for each task.

  • A hierarchal structure where clear communication, delegation and responsibility are prioritized.

  • Worker selection based on education, their experience and their technical skill alone.

  • Consistent regulations and rules where everyone knows what is expected of them and their work.

  • Impersonal working relationships, so favoritism, nepotism or outside forces cannot influence decision making. 

  • Achievement-based advancement to recognize hard work and competence while disregarding personality traits or rewarding personal favors.

4. Human relations theory

Developed by Australian psychologist and researcher George Elton Mayo, this management theory was the result of experiments for how to improve workplace conditions and productivity. Mayo’s work advanced the theory that employees may be more motivated by receiving personal attention and having a sense of belonging than they are by favorable working conditions or compensation alone. 

5. Systems management theory

The systems management theory asserts that for a large organizational system to function at an optimal level, its multiple components must all work together in harmony. That means the employees, departments, work groups and business units all play a crucial role in the system’s success. To ensure success, collaboration between managers and business units should be prioritized.

6. Contingency management theory

Developed in the 1960s, the Fiedler’s contingency theory is based on the belief that managers need to be flexible, as different situations demand different leadership traits. Rather than applying a single theory to every situation in every organization, variables like the organization’s size, technology used and leadership at all business levels should be considered. 

Managers subscribing to this theory must be flexible and ready to identify the management style that suits a particular situation as new conditions in the market, business and team emerge, and to apply that style quickly and effectively.

7. The X and Y theories

In his book, The Human Side of Enterprise, social psychologist Douglas McGregor introduced the X and Y theories. His conclusion was that managers are guided by their perception of their team members’ motivations, and therefore use two different theories.

Managers who conclude employees are apathetic or not happy in their work use Theory X, which is a more authoritarian approach. Managers who see employees as responsible, self-motivated and committed use Theory Y, which leads to a more collaborative work environment.

McGregor’s conclusion was that large organizations may rely on Theory X as a means of keeping everyone focused on meeting their organization’s goals, while smaller businesses tend to use Theory Y, which he preferred, and may be a better fit for their inclusive and creative culture.

8. Classical management theory

Focusing exclusively on the economics of workforce management, classical management theory tends to view employees as parts of a machine. The rationale behind this theory is that the physical needs of workers can be met with compensation, so social needs or job satisfaction are not prioritized.

In short, classical management theory states that employees will work harder and produce more if they are incentivized by higher wages or bonuses. Instead, profit maximalization, an emphasis on productivity, streamlined operations and a clear leadership hierarchy are its central tenets. 

While certainly not an ideal management theory by the standards of today’s business environment, a few aspects like a clear managerial structure, division of labor and clear definition of employee roles can be beneficial.

9. Modern management theory

In sharp contrast to the classical, the modern management theory is built on the idea that employees don’t work for money alone, but are motivated by happiness, satisfaction and work that supports their lifestyles. 

Managers using this style use technology to make decisions about their employees and to analyze their needs, which can help them put measures in place that support their needs and further develop their abilities. 

10. Quantitative management theory

Quantitative management theory was developed post World War II, resulting from a need to make strategic and tactical decisions backed by data.

This approach to management prioritizes disciplined thinking, and centers around finding an optimal solution to a problem and focused decision making. Mathematical models may be used to collect data to assist in those decisions, coupled with scientific reasoning strategies.

11. Holistic management theory

Sometimes called the integral theory or the organizations as learning systems theory, the holistic management theory is based on the idea that businesses are stronger when all parts are integrated and working together. 

In this theory, management’s responsibility is to provide transparency, provide clear goals and align their workforce toward a common purpose. Under this theory, learning and change are the order of the day, with an emphasis on teamwork, information sharing and empowerment of the individual.

12. Knowledge worker theory

Developed by Peter Drucker, the knowledge worker management theory became popular in the latter half of the 20th century as organizations began incorporating his ideas of balancing business needs with community.

In his theory, the employee is seen as an asset, with skills that must be managed and developed. Management is responsible for training employees or providing learning pathways through outside resources to close skill gaps. 

Take the First Steps Toward a Management Career at DeVry

If you’re thinking about advancing your education or preparing to pursue management-level opportunities in the career you already love, DeVry and our Keller Graduate School of Management’s online and hybrid1 master’s degree programs can help you work toward your goals.

We offer a range of graduate and undergraduate business degree programs with specializations in Health, Public Administration, Human Resources and much more. 

Develop your leadership and management capabilities in our core MBA program, or choose 1 of our 10 MBA specializations in areas like Global Supply Chain Management, Marketing, Accounting or Project Management to develop additional industry-specific skills and align your education to your interests and career goals. 

At DeVry, if you’ve earned an undergraduate degree in business or technology, you may be eligible to waive up to 3 courses (or 9 credit hours). We call this our Master’s Advantage. With prior learning credits, you can take fewer courses and put your master’s degree to work for you even sooner.

Earn your DeVry MBA in as few as 12 months on an accelerated schedule, or 2 years and 2 months on a normal one.2

1Program, course, and extended classroom availability vary by location. In site-based programs, students will be required to take a substantial amount of coursework online to complete their program.

2Normal time assumes completion of 7 semesters, enrollment in an average of 6 credit hours per semester and continuous, year-round enrollment with no breaks. Accelerated time to complete requires at least 9 credit hours of Prior Learning Credit. Assumes completion of 3 semesters, enrollment in an average of 10 credit hours per semester and continuous, full-time year-round enrollment with no breaks per 12-month period. Does not apply to MBA with Specialization. Time to complete and details vary by specialization. See the Keller Academic Catalog for complete program details.

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