Professional Documents
Culture Documents
Administrative MNGT
Administrative MNGT
Theories
Introduction
We have chosen to discuss Administrative Management Theory
because it plays a vital role in the development of every
business and organization.
As per the book , Administrative Management is the study of how
to create an organizational structure and control system that
leads to high efficiency and effectiveness based on Max
Webbers Theory of Bureaucracy and Fayols Principles of
Management
Principle 1:
In a bureaucracy, a managers formal authority derives from the position he or she holds in the
organization.
Authority - the power to hold people accountable for their actions and to make decisions in reference to
In todays business models, this type of theory is not very common. Nowadays, we see more of an
informal authority approach in which there is personal expertise, technical knowledge, moral worth, and
the ability to lead and to generate commitment from subordinates, without the use of this absolute power
from one individual.
Principle 2:
In a bureaucracy, people should occupy positions because of their performance, not because of their
social standing.
Some organizations and industries are still affected by social networks in which personal contacts and
relations, not job-related skills, influence hiring and promotional decisions. (Textbook / Contemporary
Management - 6th Edition)
The old ways, of not what you know, but who you know, are still around in todays society, but it can only
get you so far. In todays business world, what you know and educational knowledge, play a very important
part in moving up the corporate latter and being able to maintain a managerial position requires the
utilization of staying current on up to date techniques and information.
Principle 3:
The extent of each positions formal authority and task responsibilities, and its relationship to other
When the task and authority associated with various positions in the organization are clearly
specified, managers and workers know what is expected of them and what to expect from each other.
(Textbook / Contemporary Management - 6th Edition)
Most organizations should and are clearly defining task and position responsibilities. Job
descriptions should include all facets of an employee held position. Clarification of ones job
expectations is essential for all five business functions in order to manage and maintain a high level,
and measurable level of success for all organizations.
Authority can be exercised effectively in an organization when positions are arranged hierarchically,
Managers must create an organizational hierarchy of authority that makes it clear who reports to
whom and to whom managers and workers should go if conflicts or problems arise. (Textbook /
Contemporary Management - 6th Edition)
Todays business models utilize the initiative factor in which employees are given the ability to act on
their own, without direction from a superior. This empowerment of employees relieves the stress of
constant supervision and allows supervisors and managers to concentrate more on other
administrative duties. The balance between a vertical and horizontal organizational structure is more
widely used in todays business models.
Principle 5:
Managers must create a well defined system of rules, standard operating procedures, and norms so that
Standard Operating Procedures (SOPs) are specific sets of written instructions about how to perform a
Most companies have SOPs and require employees to learn and follow them. We have seen how in
addition to following rules and regulations, many organizations have allowed for creativity and innovation
to supersede the common way of conducting business where it was once said, rules are rules and they
could never be broken. Guidelines are needed and common sense is always important, but have an open
line of communication to new ideas and thoughts is essential in todays business society.
Managers have the right to give orders and demand obedience (formal).
Managers gain authority derived from expertise, technical knowledge,
moral worth, and ability to lead and generate commitments from
subordinates (informal).
How Does this Apply Today?
Formal authority can be used or perceived as totalitarian shutting down the
much needed two way communication; however, much can be gained
by supervisors whose subordinates naturally follow those who they
perceive as a leader (characterized by informal authority).
Clearly defined and limited chain of command from the top to the
bottom levels.
Allows for cross departmental interaction of middle managers to
speed decision making.
How Does this Apply Today?
In a competitive market place, limiting the line of authority maintains
overhead to its minimum and allows for quicker reaction to
directives in a marketplace requiring speed.
Order
Example:
Many retailers have empowered their cashiers to perform price overrides without the need for a supervisor to approve the change.
More and more companies are empowering their call center agents to
perform one-time fee reversals without the approval of a supervisor.
Example:
Example:
Example:
Example:
A compliance officer notices that communication between the
compliance department and the business unit is lacking cohesiveness.
The employee, knowing that their boss is willing to listen to their
opinions, can suggest that a liaison, someone with experience in both
areas of the business, be hired to facilitate communication and
ultimately satisfy the needs of both departments.
Conclusion
References
Jones, G.R., George, J.M (2009). The Evolution of Management Thought.
Contemorary Management (pp 38-71). New York, NY: McGrawHill/Irwin.