Contemporary Management Theories

Cite this article as:"Contemporary Management Theories," in The Business Professor, updated April 1, 2020, last accessed August 6, 2020, https://thebusinessprofessor.com/lesson/contemporary-management-theories/.

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What are the Contemporary Management Theories?

Contemporary or Modern Management Theory began with the work of Peter Drucker. He proposed the concept of Management by Objective. His work was a departure from the classical and behavioral (human relations) approaches of the past.

Subsequent work by various scholars in the field of management theory lead to three categories of management theory:

  • Quantitative Theory – The Quantitative Approach involves the use of statistical models, paradigms, and computer analysis to address management decisions. It arose out of the need for managerial efficiency during World War II to integrate systems of people, equipment, and systems.
  • Systems Theory – The Systems Approach posits that, instead of viewing the organization as a series of silos, an organization is a system made up of interdependent parts functioning as a whole for some purpose. Each department is part of an overall system that is open to effect from numerous variables. Here there are five components: inputs, a transformation process, outputs, feedback, and the environment.
  • Contingency Theory – This approach posits that organizational performance “is dependent on its environment and relationship to other units or sub-units that have some control over the sequences desired by that subunit.” Managers affect organizational performance by how the organization interacts with the environment.

Each of these categories is a unique genre of management theory. There are various other modern theories discussed in this material.

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