Modern Day Management Theories

 

Modern day Management Theories

Management theories in the workplace

Finding a management theory that suits your workplace can totally change the working environment for the better. In this article, we’ll focus on the Modern Management Theory and how its mix of hard data and human emotions can become an efficient model for leadership. We’ll also cover other management theories and see how they compare to the Modern Management Theory. 

What are management theories?

Management theories are ideas about how people manage employees in an organization. In order to lead a business, people must understand what motivates and directs employees in a company. Management theories explain what motivates employees and how leaders can use these motivators to control and guide them. Management theories provide management strategies, frameworks, and guidelines that employers can implement in the office. Companies need different management for different work settings. For hundreds of years, theorists have researched the best forms of management for different companies. Now we can use the frameworks given in these management theories to create a framework for management in companies today.

 

Modern Management Theory

Modern Management Theory was created in direct response to the Classical Management Theory that states employees are only motivated by money. The Modern Management Theory recognizes that workers are complex and have many reasons for wanting to succeed in their job. The Modern Management Theory also believes that rapidly changing technology can both cause and solve many problems in the workplace. 

This theory combines mathematical analysis with an understanding of human emotions and motivation in order to create a working environment that is maximally productive. A manager using the Modern Management Theory will use statistics to measure employee performance and productivity and also try to understand what makes their employees satisfied at their jobs. 

Modern Management Theory is actually comprised of three other management theories — Quantitative Theory, Systems Theory, and Contingency Theory.

Quantitative Theory

This theory based on efficiency and mathematical equations came out of the necessity for managerial excellence in World War II. This is a simple number-based theory that relies on calculating the risks, benefits, and drawbacks of any action before it is taken. This approach applies statistics, computer simulations, information models, and other quantitative techniques to the management of a company. This theory is usually not used to manage a business on its own. Instead, the Quantitative Theory must be used with more humanistic theories, in order to run a company. 

 

Systems Theory

This theory treats companies like a living organism, with all parts necessary for the company to survive. Developed by Ludwig von Bertalanffy, this theory states that all parts of a company, from the CEO to the entry-level employee, must work in harmony for the company to survive. Companies using this theory think that departments and employees must work as a collective group and not an isolated unit. Synergy and interconnectedness between departments are key with this theory. 

While striving for harmony between departments is important in a company, most companies don't need to rely on synergy so much for their day-to-day functions. For example, the accounting department of a small company doesn't need to be totally in sync with the HR department. This management theory is more of a way you can view the company, not an exact management style.

Contingency Theory

The Contingency Management Theory holds that every situation requires a different leadership style, and therefore no one theory can work for an entire office. Created by Fred Fiedler in the 1960s, this theory states that it is up to the leaders of a company to assess a situation and use the best leadership strategy. Fiedler believed there are three main variables for determining what leadership strategy to employ — organization size, technology being used, and the overall style of leadership in the company. 

This theory puts a lot of responsibility on the leaders of a company. Fiedler believed that a leader's traits directly affected how they managed people. This theory is also a more useable theory for modern workplaces, as it understands that as technology and companies change, so must the leadership styles.

 

 

Benefits of the Modern Management Theory

Modern Management Theory is a great management theory for the modern world because it recognizes and respects the changes that come with technology. This theory understands that technology changes the workplace and leaders must be able to incorporate these changes efficiently. For example, a manager that uses the Modern Management Theory will look at a development such as working from home on two fronts. They will analyze the costs and benefits of having employees work from home, and they will also ask individuals how working from home benefits their own lifestyle. 

This two-pronged approach to management allows for the straight facts of hard data, and the more introspective and personal approach to leadership. This theory treats employees as complex individuals who are concerned with more than just their salary, while also allowing for some company decisions to be made by rational and statistical analysis. 

Other popular management theories

Some management theories have been around for over 100 years. Here are some of the most common management theories and why they may or may not work in the modern office.

Classical Management Theory

The Classical Management Theory system of belief states that employees are only motivated by physical and economic needs. It calls for a clear structure of management where the workforce is divided into owners, middle management, and supervisors. This theory views the workplace as an assembly line, with each worker completing a specialized task instead of multitasking. People who utilize this theory believe workers are motivated by financial rewards based on the competency of their work. When companies put this theory to practical use, they will often see an increase in productivity. It can help streamline a company and make employees focus on the bottom line. However, as the theory does not consider social needs, job satisfaction, and human relationships, it can also lead to a sizable amount of burnout among employees. This model exerts a great deal of control over human behaviors and treats employees as a machine. For many companies, Classical Management Theory fell out of favor in the past 60 years as more modern theories emphasized the humanity of the workforce.

Scientific Management Theory

Fredrick Taylor came up with this theory at the end of the 19th century. He believed that using the scientific method will get the best results out of workers in the office. First, use the scientific method to determine the best way to perform a specific task. Next, you assign workers to tasks that match their abilities and train them to maximize their output. Then you must monitor the workers constantly to ensure they are using the most efficient methods. Finally, managers should spend their time training and planning for future work. Parts of the Scientific Management Theory are still in use today. Managers should offer help and advice when needed, and they should always look towards the future. However, now workers get more say about how they think their job should be done and are usually not hired to perform just one specific task. The Scientific Management Theory was best suited to large companies at the turn of the century, not small modern offices.

Bureaucratic Management Theory

The Bureaucratic Management Theory, created by Max Weber in the late 1800s, states that companies should be structured in a hierarchical system with clear rules, roles, and procedures. This theory stresses bureaucracy in six main areas — hierarchical structure, task specialization, formal selection, rules, advancement based on achievement, and an impersonal working environment. Under this theory, promotions are not about personal character or relationships, but strictly based on performance. This management theory has become less popular in the century due to its rigid structure. While in theory it makes sense for an office to have rules and standards which everyone must follow, in practice there will always be emotions and personal relationships in an office which will go against these bureaucratic guidelines.

Theory X and Theory Y

This theory, proposed by Douglas McGregor in 1960, believes that there are two main management styles and leaders must choose which style to employ based on the perceived motivation of their employees. Leaders should use Theory X when dealing with a workforce that is unmotivated and dislikes work. Managers who use Theory X must use an authoritarian work style to get anything done. Managers should use Theory Y when they believe their workforce is engaged, self-motivated, and enjoy their job. Managers who use Theory Y use a more participatory style of management. While this theory provides two different options for management, both options are quite extreme. Employees fall somewhere between Theory X and Theory Y, and managers must adjust their management style accordingly. This theory of management has become less popular over time as managers viewed their employees in less stark terms and tried to understand their employees.

 

 

 

 

Cultural intelligence 

Cultural intelligence or cultural quotient (CQ) is a term used in business, education, government and academic research. Cultural intelligence can be understood as the capability to relate and work effectively across cultures, bearing similarity to the term cultural agility. Originally, the term cultural intelligence and the abbreviation "CQ" was developed by the research done by Christopher Earley (2002) and Earley and Soon Ang (2003). During the same period, researchers David Thomas and Kerr Inkson worked on a complementary framework of CQ as well. A few years later, Ang Soon and Linn Van Dyne[1] worked on a scale development of the CQ construct as a researched-based way of measuring and predicting intercultural performance.

The term is relatively recent: early definitions and studies of the concepts were given by P. Christopher Earley[2] and Soon Ang in the book Cultural Intelligence: Individual Interactions Across Cultures(2003)[3] and more fully developed later by David Livermore in the book, Leading with Cultural Intelligence. The concept is related to that of cross-cultural competence.[4] but goes beyond that to actually look at intercultural capabilities as a form of intelligence that can be measured and developed. According to Earley, Ang, and Van Dyne, cultural intelligence can be defined as "a person's capability to adapt as s/he interacts with others from different cultural regions", and has behavioral, motivational, and metacognitive aspects.[5] Without cultural intelligence, both business and military actors seeking to engage foreigners are susceptible to mirror imaging.[6]

Cultural intelligence or CQ is measured on a scale, similar to that used to measure an individual's intelligence quotient. People with higher CQs are regarded as better able to successfully blend into any environment, using more effective business practices, than those with a lower CQ. CQ is assessed using the academically validated assessment created by Linn Van Dyne and Soon Ang. Both self-assessments and multi-rater assessments are available through the Cultural Intelligence Center in East Lansing, Michigan and the Center makes the CQ Scale available to other academic researchers at no charge. Research demonstrates that CQ is a consistent predictor of performance in multicultural settings. Cultural intelligence research has been cited and peer-reviewed in more than seventy academic journals.[7]The research and application of cultural intelligence is being driven by the Cultural Intelligence Center in the U.S. and Nanyang Business School in Singapore. Additional research and application of cultural intelligence has been conducted by Liliana Gil Valletta, who holds the trademark[8] for the term since 2013. Defined as the ability to be aware of, understand and apply cultural competence into everyday business decisions, Gil Valletta has expanded the definition of cultural intelligence into a capability that yields a commercial advantage by turning cultural trends into profits and P&L impact. Since 2010, the firm CIEN+ and data science platform Culturintel is the first using artificial intelligence and big data tools[9] to report measures of cultural intelligence and enable corporations to embed inclusion for business growth.

 

the importance of cultural intelligence within a global organization.

08 June 2020

With increased connectivity across all companies and individuals, and with global collaboration becoming increasingly instrumental for business success, cultural intelligence - or cultural quotient - (CQ) has taken on a new significance.

This is a positive change for all companies, as it means greater access to more resources, knowledge and talent, offering a dynamic working approach that isn't relegated to a single location. However, this also means that knowledge gaps in terms of different cultures and customs are now being exposed a lot more regularly.

This can lead to divides that affect staff morale, work environment, working relationships and other aspects of business, all of which impact the quality of work being produced. This is why it is important to foster CQ within a global organization.

What is cultural intelligence?

Cultural intelligence is more than just cultural awareness and sensitivity, which are also vital within a corporation; it is the ability to relate to culturally diverse situations, as well as work effectively in them. Individuals with high levels of CQ are better able to accomplish goals in a respectful and effective way no matter what the cultural context.

No matter how culturally diverse a workplace environment is, people can still forget that not all experiences, perceptions and perspectives are the same, which can lead to issues with the work being done and relationships, as well as causing friction in the workplace.

CQ allows individuals to gain a better understanding of cultures enabling them to work in a positive and compassionate way with people from various cultures. In essence, therefore, CQ is developing a more advanced knowledge of traditions, nationalities, corporate cultures and disciplines that could have an impact on a business.

The process of gaining CQ means increasing insight into the ways that different cultures function within business so as to develop language and behaviors in a professional setting that allow for better problem-solving.

Benefits of cultural intelligence

Being able to deal with differences in working methods and behavior that come about through a mix of cultures operating together within one organization can bring a number of benefits to your business.

One of the most important of these is the fact that it adds a competitive edge to a business, as CQ improves communication, cooperation, teamwork and performance. In fact, according to David Livermore, the president of the Cultural Intelligence Center in Michigan, US, 90 per cent of leading executives from 68 countries have said that cross-cultural skills are one of the most vital capabilities in order to remain competitive. This highlights the importance of CQ not just for business, but for individuals within it.

Mr Livermore goes on to explain that teams with low CQ underperform compared to those with high levels when it comes to innovation, engagement, profitability and other key factors. This suggests that CQ is vital for worker efficiency, the quality of service and creating beneficial interpersonal connections between employees, as well as between the business and clients.

One of the reasons CQ improves these aspects of business is the fact that it allows for access to a broader range of tools and resources than a company with low CQ would have. This ensures faster problem solving, as well as understanding of various cultural experiences, which could help to better shape a product or service.

Enhancing cultural intelligence

Working to enhance CQ within a company, both broadly and individually, will help to ensure the business makes the most of all benefits on offer. The development of CQ takes time but it is a process that is well worth the investment, not only because it increases compassion between colleagues, but because it can boost corporate reputation.

According to a survey carried out by the Chartered Institute of Personnel and Development (CIPD) and the Society of Human Resource Management (SHRM), one of the highest ranked methods of enhancing CQ within organizations is customized programs. Rather than unchanging and boilerplate presentation, the findings recommend an approach that meets the needs and knowledge gaps of individual companies by starting the process with an assessment.

Understanding how CQ could improve the day-to-day activities of a business or department will enable a tailored training approach that closely ties with workers' regular experience. This will help with closer learning, which allows employees to adopt behaviors and attitudes that lead to improved CQ.

However, those in leadership roles can benefit from attending external events that allow them to develop their CQ in an environment that enables them to interact with different people from various cultures. This can inform in-house training programs and provide them with a basis for individual coaching.

While e-learning is fast becoming a go-to option for businesses, the CIPD and SHRM's study revealed that levels of completion among staff when it came to CQ training were low, suggesting that a more interactive approach is the best option. This ensures higher levels of engagement, completion and examples that are relevant to individual office locations.

 

 

Reference 

https://www.glassdoor.com/blog/guide/modern-management-theory/

 

https://www.randstad.com/workforce-insights/talent-management/importance-cultural-intelligence-within-a-global-organization/