Although the practice of management dates back to ancient times, management theory itself as an academic discipline has only about 150 years of history. In that time, however, many theories and trends have emerged, all exploring how leaders and the organisations they lead can be more effective and efficient.
Some of the theories are considered outdated, others are still valid and applicable. Whatever the case, it is worthwhile to learn about the different approaches, as they can help you to navigate everyday practice and enable a more informed approach to management.
In this article we review how:
- which are the main trends in management theory;
- how the image of a "good leader" has changed;
- which are important leadership qualities in today's modern world
- and the direction in which management theory is evolving in today's modern, ever-changing world.
What is leadership theory?
Leadership theory is an academic discipline that studies the role of leadership in the successful functioning of an organisation and how a leader can be effective and successful.
The complexity of the leadership role is illustrated by the fact that different leadership theories focus on different focal points. The most common focal points are:
- The role of leadership
- Good leadership behaviour
- Relations and cooperation with other stakeholders in the organisation
- Leadership competences
- Choosing the right driving style for the situation
- The role of the manager for the organisation as a whole
Constant change in management theory
It is important to note that in today's fast-paced world, with ever-changing environmental and social conditions, new challenges are constantly emerging in the field of management theory. In response to these challenges, new theories are being developed. As a result, the lifespan of a new theory of management is nowadays only five years or less. So a young manager may encounter five or six new definitions in the course of his or her career.
Trends in management theory
Although there have been countless theories of management over the past 150 years, four main schools of thought can be distinguished. There are:
- classic,
- people-centred,
- strategic
- and modern approach.
In this section, we will discuss the above management theory trends and the main management theories and advances related to them.
Classical approaches
We owe the first scientific approach to management theory to Taylor, Fayol and Weber of the classical school.
Taylor: the basics of management
Taylor published in 1911 Principles of scientific management he laid the foundations for management. The focus of his research was on productivity optimisation, the key to which he saw in the division of the work process into steps and phases, and in a high degree of standardisation and standardisation.
According to Taylor, the main tasks of a leader are:
- the creation of an appropriate strategy,
- breaking down tasks into parts
- and choosing the best methods.
On the contrary, he believes that the workers' task is merely to carry out instructions, as he believes that the subordinates are incapable of independent thinking and responsibility.
Fayol: driving features
The most significant achievement of Fayol's work is that he defined the principles of leadership and identified the 4 most important leadership functions. These are:
- Planning;
- Provision;
- Coordination;
- Controls.
Weber: bureaucratic organisation is the only way forward
Weber's theory, which considered the bureaucratic form of organisation to be the most workable, fitted in well with the classical school's expediency-oriented approach. Weber argued that such organisations were characterised by predictability, expertise and precision, and that the promotion system was able to motivate employees.
What is the problem with the classical school?
Perhaps it is not difficult to formulate a critique of the classical school at first hearing. Taylor's main shortcoming was that he completely omitted the human factor and assumed that workers were incapable of independent thought and action. Critics of the bureaucratic organisation blamed the time-consuming nature of regulation, self-perpetuation and the pursuit of one's own goals.
Person-centred trends: theories of organisational psychology
Researchers in the people-centred movement have recognised the importance of the human factor in the process of leadership. The first theories along these lines were formulated as early as the 1910s, but as behavioural science continues to evolve, new theories of organisational psychology are being developed.
The school of human relations
The recognition of the importance of human relations has brought about significant changes in perspective, both at management level and at the level of subordinates:
- The image of leaders has changed: the leader's personality has come to the fore. Increasingly, a leader was seen as someone who could influence others not primarily through the power of his position, but through his own charismatic personality. The relationship between leaders and subordinates was also explored.
- Research within the working groups has focused on how human relationships affect productivity and the importance of social factors and established informal groups.Mayo: The human problems of industrial civilisation)
Besides Mayo, another important representative of the school was Münsterberg, who studied the relationship between psychology and industrial efficiency. His work led to the following major advances:
- The results of his research have been of great help in selecting the right people for the job.
- It has encouraged the conscious training of new staff.
- He recognised that choosing the right technical solutions helps motivate employees.
The concept of organisational culture
The concept of organisational culture is the result of people-centred trends, and is strongly influenced by the management style within the company. The role of corporate culture is very important because it is the social cohesive force that defines it:
- the identity and environmental awareness of the organisation's staff,
- identification with the objectives,
- results in stability and simplicity.
The organisational culture perspective was strengthened in the 1980s, a period in which particular emphasis was placed on processes to develop organisational culture.
What makes a good leader?
One of the key questions of the people-centred trends was what makes a good leader. It is worth observing how the picture of the qualities required for leadership has evolved with newer theories.
Leadership is an innate ability - "great man" theories
Early theories emphasised the innate ability of leaders and assumed that a certain personality type was suited to leadership. The idea was that if we could identify the personality traits that make the perfect leader and develop others along those lines, they too could become good leaders.
These theories were quickly disproved, as history has shown that the personalities of great leaders have varied widely, and it is also very doubtful how much personality can be changed.
The modern version of the innate ability approach is the theory of Jim Collins, who says that the following personality traits are necessary to become a good leader:
- professional excellence,
- humility,
- but also a strong decision-making ability,
- the ability to put personal interests on the back burner, putting the interests of the company first,
- formulate and apply standards, and follow them,
- self-reflection ability,
- leading by example.
Trait theories
The trait theories suggest that if certain leadership traits are present, you can be a good leader, although scientific studies have not yet proven this. However, these theories have led to the tests that organisations still use to select leaders today.
The currently accepted view is that the following six traits are closely related to leadership ability:
- precise knowledge of the task,
- intelligence,
- internal driving force,
- a desire to lead,
- honesty,
- self-confidence.
Fiedler's contingency theory and behavioural theories
An important shift from personality- and character-centred models was Fiedler's contingency theory. The contingency model, also known as the contingency model, is based on the idea that the effectiveness of leadership is highly dependent on the situation and the leadership style used in a given situation. So there is no "best" way to lead, but the behaviour of the leader must be adapted to the situation.
Accordingly, behavioural theories represented a new direction in the development of leadership theories, as they argued that successful leadership is based on well-defined and learnable behaviours.
Where is the truth?
In practice, both trait theories and the leadership development approach are actually used. This involves first identifying leadership potential through testing and then developing a capable leader.
The participative leadership model
The creators of participatory or inclusive models have recognised that people's motivation and willingness to cooperate are enhanced if they can participate in the decision-making process that affects them.
According to Lewin, Lippitt and White, we can distinguish 3 leadership styles:
1. Autocratic or authoritarian leadership style
-
- The manager does not take into account the opinions of his/her staff, he/she decides.
- It withholds information, making team members dependent on it.
- It arbitrarily assigns members to tasks and arbitrarily evaluates.
- Result: high performance, but a poor working atmosphere. When control is lost, there is a significant drop in performance.
2. Democratic leadership style:
-
- Involve employees in company processes, from defining objectives to completing tasks.
- The team has choices and decisions to make.
- Result: slightly lower work performance, but more creative solutions, more engagement, better morale.
3. Laissez-faire or permissive driving style:
-
- Excessive behaviour.
- The manager only provides the information and resources needed to complete the task, not the organisation or reinforcement.
- This mode of driving is rarely recommended for special situations, because experience shows that it is associated with relatively poor quality and low volume performance.
Research has shown that the right leadership style depends on the team and the situation, for example, in fast decision making situations an autocratic leadership style may be most effective, while in creative activities a permissive style works best.
The theory of situational driving style
This model no longer takes into account only the manager and the subordinate, but also the subordinate's skills, the level of motivation, and even the availability of resources and the structure of the work.
According to Henry and Blanchard's theory, the style of leaders should be adapted to the maturity of the subordinates and the team:
- Dictating leadership style: for those who are unable and/or unwilling to do the job.
- Explanatory management style: for motivated but under-qualified staff.
- Involving management style: for skilled but under-motivated staff.
- Delegating leadership: for skilled and motivated subordinates.
Strategic leadership approach - managerial leadership
The central idea of strategic management is that managers are responsible for defining the strategy that will ensure the success of the organisation.
The tasks of strategic management:
- setting organisational goals,
- developing the strategy to achieve the objectives,
- creating the necessary financial, material, technical, human and information conditions,
- setting up the information system for the audit.
To do this, a successful manager must be open-minded, market-oriented and able to think in a systems approach with the right KPIs. A people-oriented approach and continuous process improvement are also very important.
Two key conditions for management theories to work:
- clearly stated, clearly defined expectations
- and performance-based rewards.
Limitations of management-type leadership
Although management-type leadership is still a widely used leadership model, there is evidence from a large body of research that some of its assumptions are not well founded and need to be expanded.
Some examples:
- According to management-type thinking, people are motivated mainly by material factors and simple rewards.
- Human behaviour, he says, is essentially predictable.
- It ignores emotional and social motivations.
Modern management theory
The new millennium has also brought significant changes for organisations. While the old model of management was based on specialisation, hierarchical structures and a corresponding vertical division of labour, the new millennium has seen the emergence of the so-called knowledge-based organisation.
Knowledge-based organisations are already
- a weakening organisational structure,
- the horizontal division of labour
- and a much higher level of information flow based on corporate databases.
In addition to the above, new tools for coordination are needed, with an increasing role for vision, mission and new values.
Vision-based leadership
Vision-based management theory focuses on creating a vision that inspires the people in the organisation.
These are the most important qualities of leaders:
- inspirers,
- always available, accessible
- and their behaviour and attitudes are exemplary.
It is very important to involve as wide a range of the organisation's membership as possible in the visioning process, i.e. to take into account the interests of employees. The joint celebration of small successes and the use of activities to encourage progress, and the creation of an environment conducive to this, are crucial.
Coaching approach
Coaching is one of the most prominent management approaches today, which aims to develop the skills of employees. Skills development helps organisational actors to find solutions to the problems they face.
As today's ever-changing business environment requires independent judgement and immediate reaction, preparedness and motivation have become central issues. A manager's main task is to support his or her subordinates to make the most of themselves and the situations they face.
Authentic driving
The authentic leadership of Bill George Authentic leadership It is based on his book, which argues that leadership should have a positive impact on employee behaviour, increase trust in leadership and build commitment.
Innovative, liberating leadership
The focus is no longer on maximising profit and improving production, but on creating a favourable situation for all stakeholders in the organisation. It also takes into account the interests of the environment, customers, employees and local communities.
The qualities of an innovative, liberating leader:
- It does not want to control, but to give you the opportunity to develop.
- Identifies creative, developmental opportunities.
- Promotes the development of a self-management culture.
- It shows the way and helps to remove obstacles.
At the heart of modern management theories is the need to ensure collective progress as opposed to individualistic aspirations. Although the trend is immature, it is already apparent that this perspective will shape the coming decades.
If you want a career in leadership, it is worth taking a deeper look at traditional and modern trends. If you have any questions about more effective leadership, strategic planning or other areas of project management, please contact us. Contact us for a free consultation!
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