In by controlled experiment. The Hawthorne studies attempted

In any field of management, the role of theory is to provide
a means of classifying significant and pertinent management knowledge. For
example, in the area of designing an effective organization structure, there
are several principles that are interrelated and that have a predictive value
for managers. The theory of management is grouped into the five functions of
management. In sum, there are basically three main reasons why we have to study
management theory. First, theories provide a stable focus for understanding
what we experience. A theory provides criteria for what is relevant. Second,
theories enable us to communicate efficiently and thus move into more and more
complex relationships with other people. Third, theories make it possible – indeed,
challenge us – to keep learning about our world. By definition, theories have
boundaries.

Current events in management focus upon improving the
employee productivity, attracting & retaining the best talents and
improving the employee engagement in the organization. It helps the human
resource to be the competitive advantage of the organization. These aspects of
today’s management have become strategic in nature and deeply rooted to the
management theories of the organization. The most relevant theories of
management in the modern business environment are the

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1.   Humanistic theory of management
by Elton Mayo
The theory focused more on human psychology and made efforts to improve it.
Initiatives such as the reward system, positive reinforcement, job enrichment,
training & development programs and employee motivation are the result of
the humanistic approach of the management. This category was created by Elton
Mayo. The origin of behaviorism begin with the human relations movement that
was a result of the Hawthorne Works Experiment carried out at the Western
Electric Company, in the United States of America that started in the early
1920s (1927-32). Elton Mayo and his associates’ creation of experiments
disproved Fredrick Taylor’s beliefs that science dictated that the highest
productivity was found in ‘the one best way’ and that way could be obtained
only by controlled experiment. The Hawthorne studies attempted to determine the
effects of lighting on worker productivity. When these experiments showed no
clear correlation when it comes to productivity, then they started to look for
other factors (Forbes, 2012). These factors that were considered when Mayo was
working with a group of women included rest breaks, no rest breaks, no free
meals, more hours in the work-day/work-week or fewer hours in the workday/work-week
(Forbes, 2012). With each of these changes, productivity increase. When the
women were put back to their original hours and conditions, they set a
productivity record. These experiments proved five factors that can increase productivity
which is: first, work satisfaction and hence performance is basically not
economic but depends more on working conditions and attitudes – communications,
positive management response and encouragement, working environment. Second, it
vetoed Taylorism and its emphasis on employee self-interest and the claimed
over-riding incentive of monetary rewards. Third, large-scale experiments
involving over thousands employees showed highly positive responses to, for
example, improvements in working environments (e.g., improved lighting, new
welfare/rest facilities), and expressions of thanks and encouragement as
opposed to persuasion from managers and supervisors. Fourth, the influence of
the peer group is very high thus, the importance of intimate groups within the
workplace. Finally, it denounced ‘rabble hypotheses’ that society is a horde of
unorganized individuals (acting) in a manner to secure his or her
self-preservation or self-interest. These results showed that the group
dynamics and social makeup of an organization were an extremely important force
either for or against higher productivity. This outcome caused the call for
greater participation for the workers, greater trust and openness in the
working environment, and a greater attention to teams and groups in the work-place.
Finally, while Taylor’s impacts were the establishment of the industrial
engineering, quality control and personnel departments, the human relations
movement’s greatest impact came in what the organization’s leadership and personnel
department were doing. These seemingly new concepts of “group dynamics”, “teamwork”,
and organizational “social systems”, all stem from Mayo’s work in the mid-1920s