Business Management Theories: Relevance, Application, and Comparison

This essay delves into the multifaceted world of business management theories, exploring their concepts, applications, and relevance in the context of organizational behavior and decision-making. It examines how management theories compare to those in finance and psychology, highlighting the nuances of human resource management and the dynamic nature of the business environment. The paper discusses the importance of understanding management principles, the role of employee motivation, and the impact of different management styles on organizational productivity. It also addresses the differences between finance and accounting theories and the theories of management, emphasizing the importance of flexibility and adaptation in applying management principles. Furthermore, the essay touches upon the scientific and psychological aspects of management, providing a comprehensive overview of the subject matter and its practical implications.

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Business Management
Essay
4/28/2018
Student Name

1 | P a g e Business Management
The theories of management are vast in nature and its branches are diversified in
various areas. The paper sheds some light on management being the concept or not. The other
terms are also highlighted in the analysis that the fields of finance, accounting or
experimental psychology are precise than management theories or not. The discussion is
related to the theories of management are same as the theories of finance and science. If the
theories are same then which are present in management and will they matter when applied in
real life situations or not (George, Haas & Pentland, 2014). The paper discusses about the
various concepts related to the management and its theories.
The main aim of the paper was to know about the concepts and theories of
management are relevant and wider than the theories of finance and accounting. Management
is nothing but an art of getting work done from others. Management study is new than the
study of the physics, finance and psychology (Nespor, 2014). Understanding the theories of
management is equally important as these theories are derived the behaviour and nature of
human. The key to business management is to increase the productivity of the organization.
Management is an art of doing work from others. Theories of management are considered to
be collecting the ideas to form a general rules, regulation to manage the business. The
managers and supervisors are in relation to the organization knowledge and its goals. The
implementation of this will require achievement of the objectives. The motivation of the
employees will also boost up and set a higher standard for the employee (Hill, Jones &
Schilling, 2014).
Management theories applied in the organization to help the working of the business.
Its productivity and service both will increase. Not every manager is using the single theory
of management or concept of management. These principles and concepts differ from
organization to organization (Meyers & van Woerkom, 2014). These management principles
are flexible in nature. These are applied according to the type and nature of the organization.

2 | P a g e Business Management
As in the organization, employees are working, and understanding the nature and behavior of
the employee is unpredictable. Human resources are difficult to understand so as the
environment. Normally organizations use a combination of the management theories in
practice (Haslam, Van Knippenberg, Platow & Ellemers, 2014).
The management theories are wide and descriptive in nature. These theories talk
about the scientific ways of doing a work, administration of management activities, the
bureaucratic theory of management and behavior of the individual in the organization.
Science theory of management discusses the quantitative matters for decision making. It
especially deals with the development of specific mathematical tools to aid in decision
making and problem-solving. This theory holds that managing the organization and human
resources are rational and logical process. Another theory of management of administration
talks about the people behavior and perception in the organization. Administration
management theory is more people oriented. This theory focuses on the work done by the
people in the organization in short period of time (Kolb, 2014).
Finance has a very specific role in the organization. Finance field is also large as
compared to the management. The study of finance includes the study of money and other
assets. Managing and profiling the risk in the project, control, and management of assets is
includes in the study of finance theory which will remain same in every type of organization
whether it is for profit motive or not for profit organization (Anheier, 2014). Finance has a
benefit that its theory will not have to change as changes taking place in the environment as
done in the management theories. Finance theories can work in a dynamic environment
without changing rules and policies. In simple terms, finance is basically allocation of funds
for a particular period of time in a particular project (Piazza & Castellucci, 2014).

3 | P a g e Business Management
In finance, the asset is treated as an economic theory and adds some value to the
economy. The finance asset theory deals with the valuation of assets, estimation of liabilities,
taxation, growth potential etc. Both finance and management are related to the concepts of
microeconomics and macroeconomics. But their theory of dependents in the environment will
be somehow similar and dissimilar (Tirole, 2010). Most factors in finance are not like the
same as in management. Finance is comparatively more precise and short as compared to the
management. In finance, all the principles and rules are applied exactly what they are in real
whereas in case of management all the principles are applied with the modification in them.
These modifications in principles of management are done by the manager to get the best
result out of that.
In management theories, employees play a major role in the governance of any
organization. Management theory of Henri Fayol focuses on doing the single type of activity
to get specialization in its working and get the advantage of the division of labor.
Management theory is too vast that they also focus on the decision making criteria followed
in the business. The company should opt for the centralization or decentralization. Decision-
making process in management also depends on the type of labor force. If the labor force is
skilled then the decentralization can be implemented in the organization. Decentralisation
here means all the powers are distributed in the hands of employees or lower level staff. If the
labor force is not skilled then the company has to go for the centralization in its business
operation. Centralisation here means that all the power in one hand only (Hayes, 2014).
In management theory, the human element is more difficult to understand, doubtful
and complex than are the physical elements learn in the physics and accounts. Previously,
perspectives of the management are emphasized on the logical, rational and systematic
approach did not produce any satisfactorily results. As a result, more qualitative approaches
will come into existence in the business. The management of business is more than a precise

4 | P a g e Business Management
measurement. As management are an art, science, and profession. The nature of human in the
organization will vary according to the situations and conditions prevailing in the company
(Baum, 2016).
Accounting theories are set of assumptions and methodologies used in the study and
applied in the financial reporting of principles. Accounting theory is also vast in its field.
Accounting has many different concepts, principles, conventions, and regulations.
Measurement, processing, and communication of financial information in accounting is done
by the company to know the economic entities such as business and corporations profits and
losses. Accounting is used for doing all the calculation part in the financial structure of an
organization. Accounting is done by the organization to evaluate its business and
profitability. The revenues, sales and other things in books of accounts are recorded on the
basis of the accounting system. All the cost and expense of a business are calculated by the
accounting theories only. This system has many roots and branches which makes it large
(Baum, 2016).
The theory developed in accounting is based on the quantitative methods. Many
assumptions are made in the methods when applying in the business. As business is operating
in the dynamic environment in which regular changes are taken place. Changes done in the
tax rate will impact the accounting; changes in the prices by the supplier will impact the sales
and demand for the business. Other than this there are many factors which influence the
accounting to be fluctuating in nature irrespective of its theories given by the researchers. The
theories given by the accounting researchers are wide in nature and concept (Wynne, 2016).
A management theory comprises of five functions. These five functions include the
planning, organizing, staffing, directing and controlling the operations of the management.
Managers use the resources while applying these principles to operations and get the best

5 | P a g e Business Management
return out of it with efficient utilization of resources (Czarniawska, 2014). These functions
are applied in all the organization and are helpful in the utilisation of resources of the
business. The application of these principles is universal in nature. Management is applied to
all the places hospital, school, and business: profit and not for profit organization.
Psychology can be treated as science. And science can be treated as the science of
management. Scientific principles of management are given the Taylor. Taylor has compared
the science with the management and come out with the result that the management some
features are also present in the science. Like in science there is the systematic body of
knowledge like books and written materials are available both in science and management so
this feature of science is present in the management. Another feature can be the repeated
experiments. In psychology, the psychologist applies the same theory and principles to each
and every patient but get the different results. In management theory also, the principles are
applied to the individual and individual will react in their own way (Andrews & Bonta,
2014).
Scientific principles represent the basic truth about a particular field of inquiry same
in the case of psychology. These principles are applied in all the possible situations
irrespective of nature and type of organization. In Psychology also, there is set of rules and
books are written. These rules and principles are learned by the specialist. These principles
are applied to the individual innovativeness. For instance, a manager of Tesco Company has
read and learns all the same principles which other managers have in their study but then also
the Tesco manager is doing well in the environment. This is because of the innovativeness
used by the manager in the implementation of management principles. Some managers apply
these principles differently and other applies it as they have learned. So basically principles
learned by all the managers are similar but the implementation done by the individual will
differ (Garvey, 2014).

6 | P a g e Business Management
Same in the case of Psychology all have learned the same theories, but applying them
to the environment in the human will vary by the individual (Beehr, 2014). The idea in the
field of management will come up with the time and manager gains experience from the
market. Higher the experience, higher will be the knowledge of a manager. Experience in the
market will be gained only when the manager is taking the continuous decisions in the
dynamic environment (Sekaran & Bougie, 2016).
From the above discussion, it can be concluded that the management theories are not
precise as theories of finance and accounting. This is the reason that the management theories
keep on changing or get invalidation when a new theory comes into existence. As the
management theories are applied to the human beings and human beings dynamic in nature.
Each and every individual has different perception in the organisation. Every employee has
come from a different background and culture so management of people is the way through
which people can be managed properly. Finance and accounting theories are not even similar
to the theories of management. They have the fixed rules to apply in every organisation. They
do not need any changes according to the changes taking place in the environment. On the
other hand, the psychology has certain similarities with the management theories. But then
also they are not as big as the theories of management.

7 | P a g e Business Management
References
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Anheier, H.K. (2014). Nonprofit organizations: Theory, management, policy. Oxon:
Routledge.
Baum, F. (2016). The new public health (No. Ed. 4). Clarendon Press: Oxford University
Press.
Beehr, T.A. (2014). Psychological stress in the workplace (psychology revivals). Oxon:
Routledge.
Czarniawska, B. (2014). A theory of organizing. USA: Edward Elgar Publishing.
Garvey, W.D. (2014). Communication: the essence of science: facilitating information
exchange among librarians, scientists, engineers and students. Oxford: Pergamon
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George, G., Haas, M.R. & Pentland, A. (2014). Big data and management. Academy of
management Journal, 57(2), pp.321-326.
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Hayes, J. (2014). The theory and practice of change management. London: Palgrave
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Hill, C.W., Jones, G.R. & Schilling, M.A. (2014). Strategic management: theory: an
integrated approach. Boston: Cengage Learning.

8 | P a g e Business Management
Kolb, D.A. (2014). Experiential learning: Experience as the source of learning and
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Meyers, M.C. & van Woerkom, M. (2014). The influence of underlying philosophies on
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Piazza, A. & Castellucci, F. (2014). Status in organization and management theory. Journal
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Tirole, J. (2010). The theory of corporate finance. New Jersey: Princeton University Press
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