All management theories are based around the same concept that are applicable up to different extends. Management theories are a set of generalized rules and practices that assist a manager in managing the organization (Elkins & Reviewed by Michelle Seidel, 2019). The theories of liquidity management are mainly dependent on two basis including assets and liabilities. There are three main types of theories that are applicable in banking sector of Methaq bank. These theories are commercial loan theory, antipated income theory and shift ability theory. The theory that is based on the liabilities are known as liability management theory (Ektinteractive. com, 2010). Theories provide explanation to the employees to be able to effectively relate themselves with the goals of the business, and the implementation of effective means for the achievement of those goals. It is the function of managers to handle processes, people, information and other duties as per the requirements. The role of manager is to motivate subordinate employees and the determination of the practices that are best suited for the operations of the workplace. The management theories assist manager to successfully handle those responsibilities. A manager has full responsibility of the performance of his team towards the attainment of the organizational goals.

What are Management Theories?

Managers are vital for the success of any business, whether it is motivating employees, making decisions, allocation of resources or in negotiation of deals. Since the revolution in industries, managers have been an integral factor in the success of any business. Since management became a standard part of the business practices, management theories have been developed and are in use. These theories have been in a continuous development process, while the older theories still are relevant with the needs of management as well. Since the time of development of the first theory of management, the workplace has been through dramatic changes. Now-a-days in modern management practices, not one management practice fits all. Therefore, an understanding of management theories and their application processes helps in implementation of appropriate management theories in the workplace.

The origination of management theories

At the time when mass production and industrial revolution started, that brought about new requirements for the management of people and processes. The requirement of managers to run the daily operations started increasing when the business owners expanded their business activities. Theories for management were only the requirement of militaries and a few organizations before the industrial revolution. Frederick Winslow Taylor proposed different theories and he started a historic scientific management movement on the basis of his advanced ideas for managers and workers. The management roles became a major theoretical subject in business studies due to expanding industries.

Classification of management theories of Methaq Bank

In modern business practices, management theories have become an integral part. Management theories can be classified into three types, a different era in the evolution of management theories is represented by these classifications.

1. Classical management theories

2. Behavioral management theories

3. Modern management theories

These theories are further divided into many sub-theories.

Classical management theory of Methaq Bank

This theory is based on the execution and maximization of productions. The basis of classical management theory is related to the workers and its belief that workers only have economic and physical needs. The theory does not consider social needs and job satisfaction. Instead of job satisfaction and social needs it consider labor, leadership, profit maximization and decision making process. It is actually the oldest management theory. This theory has its focus on the operations, and also on the establishment of standards to increase the output of production processes. Compensation or reward is regarded as the ultimate motivational factor for employees. As it was the oldest theory of management so there is not much research on factors other than money that might also be motivating. The motive of a manager who is practicing classical theory, might be to improve output and reward a good performance with wages and bonuses.

Three further theories are encompassed by classical management theory;

Scientific management theory

This theory is one of the earliest theories of management; it was coined out by Fredrick Taylor, towards the end of the 19^th century. Controlled experiments were conducted by him for the optimization of the productivity of his workers. This theory helped him in finding out the best determiner (determinant) of efficiency of the workers in the work place, and he then formed the belief that it is the scientific method not any judgment or discretion that is the best determiner of efficiency. The focus of this theory is the minimization of waste during the production process and reduction of the production setups. Standardization, specialization, assignment based on abilities and extensive training and supervision is promoted by scientific management. A business can be able to achieve efficiency and productivity only by these practices. In this theory an optimal way to complete a given task is attempted to find out and that is very often at the expense of humanity of employees. Only parts of it are used now-a-days like efficiency, training, and cooperation as these are the parts of some of the most successful businesses on the planet .This theory is not used as a whole.

Administrative management theory

This theory was given by Henry Fayol, he was a miner and also an engineer. The principles of administrative management were developed by him, as a top-down approach for the examination of a business. The way adopted to find out this approach was that he imagined himself as a manager and thought about situations and processes that a manager might have to go through in managing. He came to the point that mangers have to perform six responsibilities in the management process. Those responsibilities are; to,

1. Organize

2. Command

3. Control

4. Coordinate

5. Plan

6. Forecast

He then developed 14 principles of administrative management keeping in mind these responsibilities. These principles ranged from the maintenance of a clean facility to value an initiative and team work. These principles are the foundation of many businesses of today that are successful today.

Bureaucratic management theory

This theory was given by a sociologist Max Weber. He used his sociological approach in developing this theory. His ideas are mainly focused on structuring a business in a hierarchical manner, with the establishment of clear rules and roles. According to him an ideal business structure is based on the following things;

1. Clear division of labor

2. Separation of organizational and personal assets of an organization

3. Hierarchical chain of command

4. Accurate keeping of records

5. Promotions and hiring based on performance and qualifications, and not on personal relationships

6. Consistency in regulations

The bureaucratic management theory is based on the expertise of leadership in the organization. The basic principles are different and depends on the structure of bureaucracy. The division of labor is a complex work that can be divided into simple jobs. the hierarchy of authority is accepted chain of command and it is related to the direct individual effort towards the accomplishment of company. the framework of rules is designed to effort directed conditions and are coordinated by rules. The impersonality feature is hire and promote people based on merit instead of favoritism. The formal selection process uses technical competence and select basis of qualification, training, and education.

It is a general approach that, bureaucratic management style is good for new startups that have the need of standards, procedures and structures.

Behavioral management theory

Complex industries and organizations increasingly gave rise to more human interests in the place of work. Methods that are more people oriented were being included in the management theories. The behaviors of human and the satisfaction of interpersonal needs of employees became a central function of management. Through fostering a collaborative atmosphere and teamwork, a manager might practice behavioral management. Two theories collectively make up the behavioral management theory;

1. Human relations theory

2. Behavioral science theory

Human relations theory of Methaq Bank

The founder of this theory is Elton Mayo, he was a psychologist and was given the task of the improvement of productivity among the employees who were dissatisfied. He tried to improve the satisfaction of workers by making changes in the environmental conditions like, lighting, temperature and break time. the theories are applicable under different conditions and benefit the management while accessing all sources and extracting best outcomes. Surprisingly all of changes resulted in positive effects. He then changed some other variables like the length of the workday and quotas, and he perceived them to give a negative effect, but they too turned out positives. This led Mayo to the results that, it was the change that made workers to feel valuable and any changes were taken with a positive attitude by the employees. This led to the theory of human relations, which said that being a part of a group makes people feel worthy and that is when they show positive attitudes towards any change.

Behavioral Science Theory of Methaq Bank

This theory is basically a combination of elements like, psychology, sociology and anthropology and to provide a scientific base (Morgen Witzel, 2013). Employees feel motivated by several factors, they may be social needs, conflicts and self-actualization, this theory does an examination of those motivational factors. In this theory individuality is recognized and also the managers need to be sociable is recognized.

Modern management theory

This theory deals with modern organizations, in those organizations there is a constant change and that must be navigated. An element that can change businesses at a dramatically fast pace is technology. In modern management theories, the elements of human and traditional theories are incorporated. Statistics to measure performance and encouragement of cross-functional cooperation is practiced by a manager in modern management theories. It comprises three sub-theories;

Quantitative theory of Methaq Bank

This theory was developed during the world-war 2, it was developed to fulfill the need of managerial efficiency. Experts developed it, who were belonged to different scientific disciplines, for the solution of issues that revolve around people, systems and materials. Its primary purpose was to aid the decision making of military systems mainly, staffing, materials, logistics and systems.

System theory of Methaq Bank

System theory was developed in biology and it was not related with business management at first. As it was founded by a biologist named, Ludwig von Bertalanffy. He founded the theory of general systems, in his attempt to refute the reductionism and for the revival of unity of science. A system is composed of interacting elements that are affected by the environment, is the idea of the general systems theory. It is due to this interaction that a system can evolve and is able to self-regulate. When it was applied to businesses it became only systems theory rather than general systems theory. In real terms it basically a perspective rather than a fully formed practice. This theory encourages a person to realize that a business is actually a system that is regulated by some laws and behaviors that also affect every biological organization. This also gives rise to many other concepts such as;

i. Entropy- the tendency that a business can run down and then die

ii. Synergy- by working together, those parts are able to produce something else that is greater than what those parts could have produced on their own.

iii. Subsystem- it says that the whole business is based on systems and those subsystems are based on some more subsystems.

The reason is that it is actually a way of looking at the business rather than a solid management process. The systems management theories can be used together with other management theories.

Contingency Management Theory

The theory of contingency was developed by John Woodward, she was a sociologist. She examined that the performance of some companies is better than others. She found that in some organizations the use of technology was much better than other companies in the same field. This efficient use of technology was the reason of better performance, and better decisions in different situations. This theory also said that effective managers are those who are easily able to adapt to different situations and circumstances.

Answer 2

The case study belongs to a bank named Methaq. The General Manager of this bank is governing a team of 100 employees that are divided into different departments, namely retail, corporate banking, and takaful. Now the General Manager observed some mismanagement among these departments. He found out that some of the departments were efficiently following the procedural guidelines, rules and regulations as per the book, then there were other departments that were not following the rules and regulations as much diligently and the employees of those departments were not very much interested in following the rules, and then there was another thing going on, it was; that many employees were willing to be shifted to the other departments, due to the leniency of the other departments. This major variation in the styles of management was proving to be the bone of contention, among the departments and was creating discords among the people. To sort out this issue the General Manger of Meethaq bank laid a meeting with the heads of departments but this also went in vain as no solution came out and not unification among departments could be made.

Analysis of Methaq Bank

After proper analyzing of the above case scenario I have found out the following things;

i. There are currently two different management theories that are being implemented in the Meethaq bank, the departments that are following the rules and regulations properly are following the bureaucratic style of management which is a sub-theory of classical management theory. According to this theory rules and regulations are given the top priority and those employees who give high performance are rewarded. Bureaucratic management style is seen as overwhelming in some organizations of today, as there are many rules and formalities to be followed. Bureaucratic management lead to lack of flexibility and cause inefficiency. It could also lead to bureaucratic delays. It can be very disastrous for the economy of the country.

ii. The second style of management that is being followed is a more lenient one. It seems that the managers of those departments are following the management style that is given by human relations management theory. This human relations management theory is a sub-theory of behavioral management theory. The behavioral management theory is often called the human relation movement because it provides better understanding of improved productivity, motivation, expectation, group dynamics, and conflict management that result in improved productivity up to many levels (Collins, 2011). It considers the whole organization as a social entity. Morale is considered integral in boosting the performance of employees. So this style of management promotes the notion that employees give more importance to human relations than monetary rewards. Employees feel more valuable when they are given attention, and they work more in such kind of environment. All the mentioned theories are applicable at different levels. The advantages and disadvantages of theory helps the management is selection of the theory (Terry, 2012).

Answer 3

So we have seen the two types of management theories that are being followed in the Meethaq Bank. Now we have to find out that which theory is working best for the organization itself. It is also important to note that, for the organization to work as a single unit there has to be unity in the management policies that are followed. Because, only then the systems and processes of the organization, will work uniformly and in the same pattern for the entire organization. Another factor to be considered is that, regardless of the system that is followed in the organization there has been no complaint regarding the efficiency and work ethic of the employees. It means that employees are working fine and are working according to the requirements, the only problem that is there is due to the difference in the styles of management. The departmental and organizational goals are to improve the system and enable the workers to work for the growth and development of the system.

It has also been seen that, many of the employees want to shift to the departments that are lenient in following the rules and regulations. This means that a majority of employees have the desire to work in a more open environment with lesser rules and formalities to follow.

Recommendation

So we can say that the management style suggested by the theory of Human Relations is appreciated more in the organization (Meethaq Bank) so if that is followed it will eventually be beneficial for the organization. That style of management, gives more importance to human relations and understand the need of an employee to be socially connected to others. If the employees of Methaq Bank are more comfortable with a lenient policy of management than there do not seem any evident problem in implementing it in the entire organization (Ektinteractive. com, 2010; Drucker, 2007). The General Manager has not reported any difference in the efficiency or work ethic of the employees of any department owing to the difference in the policies of management. The only issue that can occur is that in human relations style of management the rules of the organization will be sacrificed. The counter argument to this can be that, the rules and regulations are made for the organized and timely working of the organization. Now if the employees feel more comfortable with lesser rules to follow, and also there is no difference in the work ethic, they still work as per the requirements. So, Meethaq Bank is recommended to implement a more lenient policy (Elkins & Reviewed by Michelle Seidel, 2019; Morgen Witzel, 2013).

References of Methaq Bank

Collins, J. (2011). Good to Great: Why Some Companies Make the Leap...And Others Don't.

Drucker, P. F. (2007). Management: Tasks, Responsibilities, Practices. Transaction Publishers.

Elkins, H., & Reviewed by Michelle Seidel. (2019, March 27). Management Theories & Concepts at the Workplace. Retrieved from https://smallbusiness.chron.com/: https://smallbusiness.chron.com/management-theories-concepts-workplace-17693.html

Morgen Witzel, M. W. (2013). The Oxford Handbook of Management Theorists. Oxford University Press.

Taylor, F. W. (n.d.). The Principles of Scientific Management.

Terry, G. R. (2012). Principles of Management: Irwin Series in Industrial Engineering and Management.