There are four major management theories that have been applied in various administrations; private and public. These are the Classical or the scientific theory, Human relation theory, Neo-Classical theory and the Modern system theory. Each one of these theories of administration is good but has inherent flaws as well. The Classicaltheory hinges on a hierarchical management where the worker only executes orders issued him or her to carry-out his or her duties. It believes that if there is something wrong in the organization, it could be resolved by carrying out a thorough scientific research to identify the problem and proposing solutions for their resolution. Some of the elements in this theory of management are unit cohesion,unity of command, loyalty of placing theorganization's interest abovethat ofthe individualinterest and the need for an organization to have one plan and one objective. It talks of departmentalization and centralizations with decision making flowing from top to bottom.This theory is flawed in that it treats people as mechanical objects with not wits or feeling and does not take into account the psychological and social factors of the employees into account.
The human relationtheory on the other handseeks to humanize workers and not as a piece tool. It espouses the inclusion of workers in the decision-making process because in as much as the individual cares about the financial incentives from work, human sentiments could be the driver that will boost productivity. According to thistheory, a good human relationship between the worker and management will harness the inner potential of the worker to increase productivity. In effect, decision-making fromis bottom-up. TheNeo-Classical or the Contingency theory ofmanagementseeks to bridge theClassical andHuman relationtheories of management. On one hand it espouses control and coercion, and reliance of extrinsic rewards, while on another it embraces participatory management, self-governance, reliance of intrinsic rewards and bottom-up decision-making. This is ambidexterity, being both centralized and decentralized.
The Modern system theoryviews organizations as organisms that live and survive among others. The theory is based on the fact that since organizations live among each other, they will have to withstand pressures from both within and outside the organizations. This is the adaptive management theory where the situation dictates the management style to apply. Since organizations are not objects in vacuum and rather involve human beings, the individuals that make up the organization ought to understand the organizational structure, the goals and objectives, effective dissemination of information to all staff, proper chain of authority so that there is no ambiguity on where staff take orders from. The effectiveness of these will ensure the achievements of the organizational objectives and goals.
The public sector practices the modern system theory, with defined chain of command and defined goals for the organizations. Decision making are not always from bottom-up because policies are made by Congress and the public agencies only implement them. However, decisions affecting moral are shared responsibility of the all employees and can be an example of bottom-up decision making. There is financial remuneration for the employee and superior performance is rewarded in cash or non-cash incentive according to the organization's policy.
Since the organization is made of individuals, motivation of these individuals may not be the same because what motivates one person may be a show-stopper for another person. This is where the manager exploits the situation and deal with it according to the prevailing environment. Public sector organizations or agencies are not for profit but they seek ways to become effective in delivering their services to the public and also look for ways to be efficient. The Veteran Administration (VA) hospitals for instance care for veterans at no cost. As non-profitorganization, they maintain their effectiveness by applying lean six sigma techniques also engage the services of industrial engineers to streamline and perfect their operations at the hospitals. They are concerned about how long the patient waits in their spaces and seek ways to reduce the wait times. They also seek to be efficient by entertaining competition with the local pharmacies, charging a small amount for pharmaceutical products dispensed to those with incomes above a certain threshold. This enables them to replenish their pharmaceutical stocks and to keep their patients happy. As the Contingency theory is linked to output and input, it is very important that managers stay flexible and look for avenues to increase their output and becoming more efficient.