All social enterprises require some form of formal management for them to be run successfully, such as businesses, schools and hospitals. Several academics have published books and articles regarding their view on management; this has led to a number of different management theories as each academic has their own opinion on how a social enterprise should be managed. This essay will talk about two management academics’ theories, namely Max Weber and Douglas McGregor, and how reliable their theories are in today’s management context.
Max Weber
At the age of 56 years (1864-1920), an academic and sociologist, Max weber is most commonly known for his “idea of bureaucracy” (Cole, 2004, p.25), which is also known as management theory. Several definitions exist under the term ‘bureaucracy’, however Max weber’s theory focuses on the “organisational form with certain dominant characteristics, such as a hierarchy of authority and a system of rules” (Cole, 2004, p.25). Weber’s theory focuses on six key characteristics, namely division of labour, hierarchy, written documentation, trained experts, full working capacity and general rules (Gale and Hummel, 2003, p.412). In today’s world, Weber’s theory of bureaucracy is used by practically every company of any size (Cole, 2004) and also adapted in the political, religious and military aspects of society (Gamble, 1989). This is because some method of leadership and organisation needs to be practiced by a business or social enterprise for it to be run successfully. Each company may adapt this theory in their own unique method such as the coca cola company, which has a very tall hierarchy in place and subordinates are divided up by regions. However a tall hierarchy may lead to time wastage since developing a new product or marketing campaign would need to be approved by the corporate division. Weber’s theory also suggests that the selection of officials should be on qualification and not personal relations. Leading companies use this method to appoint their board of directors, such as Tesco PLC who have an annual election (Notice of Tesco PLC Annual General Meeting, 2014). On the other hand, till today, family owned businesses may be reluctant to involve a third party, hence they may choose to employ a family member who is unqualified for the job. This shows that while most large companies today do follow Weber’s theory on trained experts - due to the internal benefits for the business – not all companies follow his theory. To some extent, a hierarchal order, division of labour and specialisation could increase the efficiency of a business. Despite this, (Crozier, 1964) states that some characteristics of Weber’s theory such as hierarchy and centralisation of decision-making may lead to the inability of a business to correct itself from previous mistakes. This indicates that not all businesses would use this theory due to the loophole. Many new organisation theories have been developing after the bureaucratic organisation theory; this portrays the bureaucratic theory as no longer of great importance for today’s businesses. The newly developed theories focus on intensive market orientation, customer satisfaction and shareholder value oriented corporate governance strategies (Gabriel, 2005). Hence, this shows that although Weber’s bureaucratic theory plays a significant role in management organisation, it does not take into account all the aspects of today’s management context and failing to adapt to environment changes; therefore the theory would need to be adjusted for it to be effective in today’s management context.
Douglas McGregor
Douglas McGregor is most commonly known for developing his theories X and Y, which were published in his book ‘The Human Enterprise’. Theory X states that employees are regarded as lazy, incapable of self-direction and independent work behaviour, and little to offer in organisational problem solving while Theory Y states that employees are not inherently