Theory of Administration- UGC NET Commerce Notes & Study Material

The theory of administration management is a body of learning that deals with the principles and ways of organizing and driving work. It is involved with how to design and layout firms, give aid, and inspire and lead people. The theory of administration management had its roots in the early 20th century. It was when scholars such as Frederick Taylor and Henri Fayol began to study management principles. Taylor's work also focused on scientific control, which feared a sense of efficiency and result. Fayol's work focused on general control, fearing the extent of planning, organizing, coordinating, and controlling. The theory of administration management has grown, and there were now many other schools of study in the field. Yet, all of these schools of thought share a joint goal: to better the efficiency and use of firms.

The theory of Administration is vital for the UGC-NET Commerce Examination to be studied in detail.

In this article, the learners will be able to find out details of the following:

• What is Administrative Management Theory?
• Father of Administrative Management Theory
• Principles of Administrative Management Theory
• Administrative Management Theory Advantages
• Disadvantages of Administrative Management Theory
• Application of Administrative Management Theory
• Fayol’s Functions of a Manager

Administrative Management Theory is a collection of guidelines that can be applied to plan and organize organizations, assign resources, and drive and motivate individuals. It was formulated by French mining engineer and industrialist Henri Fayol early in the 20th century. Administrative Management Theory has been criticized for its simplicity, its failure to account for the human factor, and its top-down nature. It is still a useful tool for learning the concepts of management. It can be employed to enhance the productivity and efficiency of organizations, and it can also be employed to develop a good work environment.

Henri Fayol (1841-1925) was a French mining engineer, and industrialist thought to be the father of administrative management theory. He is best known for his 14 principles of management, which are still widely used today.

Fayol's work was based on his words about how the firms worked in the trial. He felt sure protean management principles could be used by any firm, regardless of size or industry.

Advantages of Administrative Management Theory 

Administrative Management Theory deals with organizing and managing businesses or organizations in a way that they can be run efficiently. It assists in planning, organizing, and controlling work to accomplish the objectives of the company or organization.

Clear Structure

This theory establishes a clear form in an organization. It positions the roles and duties of an individual, therefore, everyone will know what needs to be accomplished. A proper form prevents mistakes and confusion. In this way, the tasks are accomplished promptly, and one knows whom they report to as well as the tasks they do.

Better Decision Making

Administrative Management Theory assists leaders in better decision-making. It makes managers reflect on the larger picture and deliberate before making decisions. The theory is about information collection and employing it to address problems. This prevents poor decisions that can impact the entire organization.

Efficiency

The theory tries to make companies function more effectively. It emphasizes ensuring that resources, such as money and time, are utilized effectively. By planning tasks and having clear guidelines, all individuals can work quicker and more effectively. Efficiency enables companies to achieve their objectives without squandering resources.

Enhanced Communication

Communication plays a major role in every organization, and this theory facilitates enhancing it. It promotes direct and open communication among managers and employees. Where communication is well done, people know what's going on and are able to share ideas. This assists in faster problem-solving and working in concert as a team.

Goal Achievement

Administrative Management Theory assists organizations in keeping their goals in mind. It promotes planning and defining specific objectives. Organizing tasks and responsibilities makes it easier for everyone to work towards the same objective. It becomes simpler to achieve goals when everyone is working on the same wavelength and is aware of their role.

Although Administrative Management Theory has a lot of benefits, it also possesses some drawbacks. These drawbacks can increase the difficulty of organizations to be more flexible and adjust to changes.

Too Much Emphasis on Rules

This theory relies heavily on procedure and rules. At times, adhering to rules rigidly makes it seem like work is less creative. Individuals will feel as if they need to abide by the rules even when there are new ideas or improved ways of doing something. This will prevent individuals from being flexible or thinking outside the box.

Lack of Personal Freedom

In organizations using this theory, employees tend to have little choice in what they do. They might be told to do everything just as the manager instructs, which may be dull or confining. Individuals might not be motivated if they are not given the opportunity to express their own ideas. This can mean less enthusiasm and less interest in their job.

Slow to Adapt

Administrative Management Theory can cause organizations to be slow to adapt. Because the emphasis is on structure and rules, it can be difficult for the company to adapt quickly when something new occurs. This would mean the organization could lose out on new opportunities or be overtaken by quicker-moving competitors. It can be difficult for companies to adapt if they are mired in old habits.

Over-Dependence on Managers

This theory grants a great deal of authority to managers, which can become an issue. At times, employees may get the impression that their suggestions and efforts don't count as much. If decisions are solely up to managers, it can leave the organization lacking a team sense. This can cause employees to feel less appreciated or significant within the company.

Too Much Control

Administrative Management Theory can result in excessive control at the top. If managers are controlling everything, employees might not feel trusted. They might feel that their creativity and input don't matter. This can result in low morale and a lack of collaboration among the staff.

The Principles of Administrative Management Theory are significant concepts that enable organizations to function efficiently and effectively. The principles are used by managers to make decisions and coordinate work in the optimal manner.

Division of Work

This rule states that work should be broken down into smaller jobs. Each individual has certain responsibilities, so they can become proficient at what they do. If everyone concentrates on a smaller job, the job is completed quicker and better. This makes the entire organization more effective.

Authority and Responsibility

This rule describes that managers must have the power to issue orders, but they also need to be responsible for their actions. When a manager tells someone to do something, they are responsible but should ensure the job is done well. Authority enables managers to manage the work, and responsibility ensures the work is done well. Both are necessary to succeed.

Discipline

Discipline involves obeying the rules and instructions to maintain a smooth running organization. Employees need to respect their superiors and obey the regulations to prevent disorder or errors. When all are obeying rules, the environment becomes more coordinated. Proper discipline ensures orderliness and harmony within the organization.

Unity of Command

This principle states that there should be a single manager that every worker should report to. Having a single person to direct reduces confusion over who is to issue commands. If a worker receives commands from multiple managers, it may create issues or lead to confusion. Unity of direction ensures everyone is aware of what to do.

Unity of Direction

Unity of Direction means that all members of the organization are working in the same direction. It must be ensured that all groups and individuals are directed towards the same objectives. When everyone is working in the same direction, the organization becomes more effective. This rule ensures that all members of the organization are aware of their role in the end result.

Subordination of Individual Interest to General Interest

This rule states that the organization's good must come first before any personal interests. All should be working for the collective good of the group and not for personal gain. If individuals work on the goals of the organization, they can all achieve together. This facilitates team building and coordination among employees.

Remuneration (Fair Pay)

Fair compensation is significant since employees ought to be compensated for the effort they put in. This is a principle that asserts that workers should be fairly paid or compensated for their labor. Fair remuneration for workers makes them feel appreciated and encouraged to work to the best of their ability. A fair wage keeps employees content and committed to the organization.

Centralization

Centralization implies that the decision-making authority lies with a limited number of leaders. This would enable organizations to make decisions speedily and remain organized. Nevertheless, it implies that the subordinate workers might have less influence in significant decisions. Centralization makes it simpler for managers to regulate the business, but it may not always enable new ideas from employees.

Scalar Chain

The Scalar Chain is the concept that there needs to be a definite chain of command from the top manager down to the lowest employee. This makes it easy for everyone to know who to approach for questions or assistance. It also ensures that communication goes smoothly from top to bottom. A good scalar chain ensures that everyone is harmoniously working and knows where they fit in the organization.

Order

Order is the fact that everyone and everything should be in the right place at the right time. This principle guarantees that resources, whether materials or workers, are used in the best way possible. If everything is organized and in its right position, the work is more efficient. Order reduces confusion and wastage.

The use of Administrative Management Theory makes organizations more structured and effective. Among its main uses is the division of work, where jobs are divided into smaller tasks to enable employees to specialize and get their work done faster and better. Another key area is authority and responsibility, where managers can issue orders but also have the responsibility for what they produce, making sure decisions are made cautiously and responsibly. The unity of command principle makes each employee report to one manager alone, which helps avoid confusion and keeps work sorted. Furthermore, discipline is used to keep the organization in order and ensure that staff adhere to the rules and be respectful of their positions. Last but not least, unity of direction ensures that everybody in the company is working for the same thing, with efforts coordinated towards reaching the goals of the company. Through these rules, organizations become more efficient, have improved communication, and are able to make better decisions, hence more success.

Fayol's Functions of a Manager are the major things that managers do to ensure that a business is operating effectively. These functions are significant because they assist managers in planning, organizing, leading, and controlling the organization's work.

Planning

Planning is choosing what to do and how to do it. Managers consider the objectives of the business and determine how to best accomplish them. This keeps the organization on track and ready for the future. A good plan informs the team what they should prioritize.

Organizing

Organizing is the process of putting together resources, like people and materials, in a manner that makes the work best accomplished. The managers determine who does what and how the tasks are allocated. Organizing informs all the members of their job and what is expected of them. This enhances the efficiency of the work and prevents confusion.

Leading

Leading is about directing and inspiring the employees to deliver their best. Managers encourage and motivate their workforce, making each member focused on the goals. Good leaders enable people to collaborate and help maintain a healthy workplace. Leading guarantees the team to be motivated and work towards organizational success.

Controlling

Controlling is ensuring that the work is proceeding according to plan and correcting issues when they arise. Managers monitor the progress of the work and ensure everything is in line. If something is not working, they can adjust to make it better. 

The administration management theory has left a lasting influence on the structural and operational practices of organizations. Principles laid down by these theories more than a hundred years ago continue to be in use today and assist organizations in becoming more efficient and effective. Using principles such as division of labor, authority and responsibility, and the scalar chain, organizations can establish a demarcated structure and a sense of order that facilitates the attainment of objectives.

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