Academics and business owners periodically come up with theories for increasing worker output while keeping the same number of workers through modern management theories. According to political science professor Dr. Yasin Olum, modern management is the era of management that began in the 1880s and 1890s with Frederick Taylor, who argued for the abandonment of old management practices for empirically backed best practices. To maximize productivity, managers must understand the latest best practices.
Modern management theories help businesses maximize production by using human resources to their maximum potential. Businesses do whatever possible to develop workers towards their maximum efficiency and potential.
Fredrick Taylor's theory of scientific management held that businesses could maximize the productivity of unskilled workers by first observing work processes and then developing best practices. Taylor's theory builds on Adam Smith's theory of the division of labor, which ensures that each worker becomes increasingly more skilled at a particular task, allowing each worker to become as productive as possible.
Max Weber theorized that hierarchical systems encourage informed decision making. In the 1990s, the theory of hierarchy delayering emerged. A report for the Institute for Employment Studies argues that flattening the hierarchy would shorten communication paths, stimulate local innovation, speed up decision making and create an environment where managers were more closely involved in production. Flattening out hierarchy means removing overhead and reducing bureaucracy.
Management theories of the 1930s focused on interpersonal relationships in the workplace, called the human relations approach. Businesses gave the staff more influence over decisions within the workplace. The human relations theory focused more on the psychological and sociological aspects of management, using Abraham Maslow's theories of motivation and Chris Argyris' ideas on how organizational structure interferes with satisfaction.
Taylor's scientific management theories leave executives accountable to scientific processes, instead of simply relying on their judgment. When management strategies are implemented, others in the company can test the effectiveness of these strategies and determine if they are truly effective. This discourages management from making decisions purely on whim and instead encourages management to make scientifically proven changes that increase worker productivity.
Globalization theories take into account changes occurring throughout the world and how these changes influence business. The globalization theories hold that the business world is becoming increasingly more interconnected and many enterprises are engaging in business with other international companies, investing, hiring overseas workers and handling overseas distribution chains. Globalization is partially driven by the development of informational technologies such as the Internet.