Management Theories and Their Applicability in Modern Business Operations

This report discusses Henri Fayol's administrative management theory and Max Weber's bureaucratic theory of management. It explores their advantages and disadvantages and provides examples of organizations that apply these theories in their operations.

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HC1031: Management
Student
Institution

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Part A: Individual Reflective Learning
Description of the selected Incident
Last year, I joined an internship program with Woolworths, the largest food retailer in Australia.
In the internship, the marketing manager of the company selected me to manage a team of five
interns. This incident served as the right career path by giving me a chance to practice as an
upcoming manager. My task was to give a sales and marketing report to the overall marketing
manager of the company, and all the skills of a manager were to be put into great practice. The
key focus was to increase sales during the three months period of our internship. In this
reflection report, I will analyze this team manager incident and describe how I used the functions
of management in accomplishing the set goals.
Analysis of the Incident
According to (Koontz, 2013, p. 100), the first function of management is planning. In planning, I
spend time mapping out the important steps that my team should adopt in order to raise sales
volume. The main areas where I used the function of planning include free samples by the team
while in the field, placing more items on sales, increasing customer to sales representative
contact, contacting existing customers to know if they are still interested in buying again, and by
social media advertisements.
The second function of management that I practiced is organizing. In this function, I was keen on
resources distribution and the organization of my team as per the set plan. Here, I used the
division of labor approach by assigning each team member a unique and different role, and also
ensured that the sufficient and appropriate resources such as fare, food, and airtime were

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provided to the team for them to carry out the plan (Koontz, 2013, p. 101). I also delegated
authority and gave direction so that the sales reps can operate towards increasing sales with little
or no barriers.
The third function that I practiced is leading. In this function, I spend enough time connecting
and interacting with the team members on an interpersonal level. Here, I went beyond just task
management to team motivation, open communication, encouragement, and inspiring them
towards improved sales work morale and productivity (Koontz, 2013, p. 105). In group
strategizing, I involved all team members in an open discussion where I collected their ideas,
suggestions, and opinions on how we could improve sales.
Last is the function of controlling. Here, the measurement of the accomplished objectives against
the standards and resolution of any deviations occurring to ensure achievement of the desired
sales volume was my key concern (Koontz, 2013, p. 110). I established performance standards,
measured actual output, compared the actual and standard team performance, and ensured
correction were done before submitting the final report to the overall sales and marketing
manager of the company.
Critical Evaluation of the Incident
Overall, the approaches I used in leadership were appropriate. However, there are areas in
planning and leading that I need an improvement. If given an opportunity to manage another
team in future, I would change aspects of time management, resources allocation, report
preparation mechanism, and frequency of customer contacting by the team members.

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Part B: Group Element
Executive Summary
The current business environment is highly competitive, and this calls for an application of the
right management models by leaders to ensure they achieve the set goals of a company and also
in maintaining the competitive edge over rivals in the market. In this report, Henri Fayol’s
administrative management theory and Max Weber’s bureaucratic theory of management will be
discussed and their applicability in modern business operations by different companies.
Keywords: administrative management theory, bureaucratic theory of management, competitive
edge
General Introduction
The concept of management is built on theories that guide business managers in the planning,
organizing, leading, and controlling of business activities (Jain, 2014, p. 130). Management
theories assist managers in the effective relation to the goals of a business and the
implementation of effective means in attempts to accomplish the objectives.
Overview of Bureaucratic Management Theory
In this theory, Max Weber differentiated between power and authority. According to Max
Weber, power evokes obedience through the threat of force that makes people to obey and follow
regulations. Max Weber explained that there are three types of power namely charismatic,
traditional, and legal which exist in an organization. The characteristics of Max Weber’s theory
include division of labor, formal and impersonal relations, formal hierarchical structure, written
document, technical expertise, and management by rules (Jain, 2014, p. 130).

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Advantages of Bureaucratic Theory
i. It embraces uniformity: The rules and procedures to be followed are decided upon for
every duty they lead to and seek to uphold consistency in employee conduct (Weber,
2015, p. 88). All employees are required to adhere to the set rules, and this makes the
process of management easy.
ii. The roles, responsibilities, and duties of each job are defined clearly leaving no room for
overlap or confliction of work duties.
iii. The process of hiring, selection, and promotion follows a set of procedures based on
expertise and merit. This helps companies in assigning people the right tasks and in
optimal use of human resources.
iv. Division of labor helps employees in gaining expertise to their jobs and this improves
workers performance to considerate level.
Disadvantages of Bureaucratic Theory
i. According to (Weber, 2015, p. 90), the following are the disadvantages of Max Weber’s
bureaucratic theory:
ii. The workers are unable to develop a sense of belongingness and association to the
company.
iii. The use of this system makes an organization suffer too much paper work and red tape.
iv. Due to heavy reliance on the system, workers become too used to the system and could
be resistant to change and introduction of new operations or techniques
v. The increased reliance on regulations and need for total adherence inhibits employee
growth and initiative.

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Overview of Administrative Management Theory
Administrative management theory was developed by Henri Fayol and attempts to come up with
a rational way to design an enterprise as a whole. Henri Fayol laid down 14 managerial
principles namely equity, initiative, division of work, discipline, spirit de corps, scalar chain,
unity of direction, authority and responsibility, remuneration, need for general interest,
centralization, and stability of tenure (Fayol, 2016, p. 44). This theory has both advantages and
disadvantages, and these include:
Advantages of Administrative Management Theory
i. Facilitates organizational structure- The key concept of Henri Fayol’s managerial theory
was “organizational structure”. He emphasized on a hierarchical structure where top
managerial levels act as forceful managers.
ii. Promotes the team spirit: Today, many businesses consider this principle prevalent as
managers are entitled to act for the general interest of the company and shun any self-
interest (Ferdous, 2016, p. 66).
iii. Motivation of workers through fair compensation: Equity is one of Fayol’s principles of
management. In this managerial approach, wages and salaries are determined on the basis
of gender equity, and all employees have an equal and fair chance for promotional
activities.
Disadvantages of Administrative Management Theory

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i. It is based on human application: The administrative theory of management is based on
human application. Humans are prone to making blunders, and if mistakes are made, this
may undermine the team strength.
ii. Its application relies on experience: The application of administrative theory concepts in
practice requires experienced people.
iii. It is based on unproven assumptions: The theory assumptions have not been scientifically
tested and this limits its efficiency (Sampson, 2018, p. 5). The basic assumption is that
employees get motivated by salary in not yet justified as there are many motivators in the
workplace.
Relevant Example of an Organization
Bureaucratic Management Theory
Delta Airlines is a relevant example of organizations that use bureaucratic management models.
Delta Airlines is among the successful companies in the domestic and international travel
industry, and it currently offers flights and tickets to over 300 destinations in over 60 countries.
The American Airline has been applying Max Weber’s bureaucratic management concepts in its
business operations. Delta Airline has very formal operating rules and follows a centralized
structure of power (Jain, 2014, p. 105).
The company has machine bureaucracies that are aligned to its routine tasks as well as what it
creates and produces to the airline customer in the globe. Since its inception, Delta Airlines has
been growing at an accelerated rate due to its continued investment to new technologies and
initiative. In the recruitment plan, Delta Airlines adopts a formal selection process, something
which has been promoting competence, experience, training, and technical knowhow (Weber,

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2015, p. 60). Last is that the machine bureaucracy rules are uniformly applied from the top
leadership to the subordinate staff.
Administrative Management Theory
Woolworths is a good example of a company that applies Henri Fayol’s administrative theory of
management. In its retail operations, Woolworths has embraced the specialization and division of
labor principle of management as employees are assigned duties in their areas of specialization.
The management of Woolworths is divided into departments such as finance, human resources,
information technology, sales and marketing, customer care, and internal audit. In these
departments, authority and responsibility is clearly defined to ensure unity of command and unity
of direction (Sampson, 2018, p. 10).
Also in Woolworths, there is effective delegation of duties where order is highly uphold and the
work environment across all countries is made safe. One of the core values of Woolworths is
equity, and thus all employees are treated fairly and equally by the company (Wren, et al., 2012,
p. 906). In addition, decision making is highly centralized, as it follows the hierarchical
leadership structure from senior management, to middle level management, all the way to
subordinate staffs.
Summary and Conclusion
In conclusion, there are four functions of management as formulated by Henri Fayol, and these
include planning, organizing, leading and controlling. In this competitive business environment,
managers must have the right managerial skills to discharge these duties with utmost diligence.
In the report, Henri Fayol’s administrative theory and Max Weber’s bureaucratic theory of

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management have been discussed in detail. Today, different companies apply the concepts and
ideas formulated by these theorists in attempts to achieve the set objectives. Therefore,
companies must align their objectives in close reference to these theories and make an informed
decision of the most appropriate theory to apply in their respective organizations.

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References
Fayol, H., 2016. General and industrial management. 2nd ed. Chicago: Ravenio Books.
Ferdous, J., 2016. Organization theories: from classical perspective. International Journal of
Business, Economics and Law, 9(2), pp. 1-6.
Jain, A., 2014. Using the lens of Max Weber's theory of bureaucracy. 37th Annual Hawaii
International Conference on System Sciences2004. Proceedings of the. IEEE, 6(4), pp. 127-136.
Koontz, H. C. O., 2013. Principles of management: An analysis of managerial functions. 4th ed.
New York: McGraw-Hill.
Sampson, Q., 2018. The Advantages of Fayol's Principles of Management. Chron, pp. 1-10.
Weber, M., 2015. Bureaucracy. In Working in America, 2(1), pp. 29-34.
Wren, D., Bedeian, A. & Breeze, J., 2012. The foundations of Henri Fayol’s administrative
theory. Management Decision, 40(9), pp. 906-918.