Management As Organizations Become Larger


As organizations become larger in both scope and scale, the need for both management and leadership compounds. Many organization problems today, correlate heavily to a lack of true management. Aspects such as fraud, high employee turnover, product recalls, and strikes, all have origins with management. To better combat many of these negative influences, companies must hire, attract and retain talented management. In order to do so, many companies use the administrative management theory of management. This theory emphasizes the use of planned procedures, job specialization, and merit pay to help facilitate business objectives. I believe this theory to be the most useful in regards to managing an organization. For one, specialization of labor helps increase operational efficiencies with a business. In addition, planned procedures allow both employees and management to have and job expectations. Finally pay based on merit provides incentive for employee and management to perform their job correctly (Lewis, 2006).

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To begin, Adam Smith, and economic pioneer, once wrote a book describing the specialization of labor and its merit. Through use of the administrative theory of management, individuals are required to specialize in a particular task or objective. In regards to managing an organization, this theory is particularly useful as it creates efficient operations. Through repetition and the acquisition of knowledge, employees generally become more productive. Overtime, employees begin to specialize in the particular task being experts. Through this acquisition of knowledge, these individuals become more efficient as they are able to product more product than their inexperienced counterparts. This is particularly true for industries that rely heavily on high fixed costs. Industries such as manufacturing rely heavily on the concept of specialization of labor to reduced costs throughout the entire manufacturing plant (Paul, 2005).

In addition, specialized labor helps management to identify solutions to inefficient operations within the facility. Front line employees are particularly useful as they often have the most accurate knowledge regarding changing consumer sentiments or business operations. By specializing in a particular field, these individuals can better assess changes that need to be made to business operations. These individuals can they recommend solutions that management can review and implement. Through the use of is better able to achieve company goals through collaboration with employees irrespective of title or tenure.

Management often requires the need for clearly defined goals and expectations. The administrative theory helps facilitate the process of creating clearly defined expectations within a company. By knowing what is expected of them, employees are more apt to meet those expectations. Recent studies have shown that employees often complain about a lack of information regarding the company’s goals and objectives as a deterrent of job performance. By clearly defining what the business aims for the future are, employees feel more collaboration. Employees and management tend to sense teamwork rather than opposition. Ultimately, through proper communication, employees can understand objectives, and “buy in” to the overall business approach

Clearly defined goals also help management to avoid biases when assessing other employees. Merit increases are often predicated on figures both beyond the control of employees and within the span of control of employees. By clearly identifying the objectives of the business and how employees are doing to help facilitate them is critical to the proper functioning of management. Management through clear expectations can help provide guidance and direction to employees. Management can also change operations to achieve a specific goal. For example, if the company’s goal is to increase margins, management may respond by reducing unnecessary expenses within their line of business. By communicating this to employees, management will be in a to cut costs (Stroh, 2002).

Finally, the theory expresses the need for pay based on merit rather than other subjective means. This point is particularly critical in large, bureaucratic organizations. The ability to pay those who perform well encourages innovation and productivity. Pay based on performance is critical to enhancing overall job satisfaction as well. Employee moral tends to decrease, when individuals who cheat, are promoted, while those that work hard remain stagnant. To further organization goals, pay based on merit, allows those that are successful to be promoted to higher ranks (Manfred, 2003)

One management style in particular that reminds me of the improvements I need to make is that of the cultural theory. I sometimes neglect to think of the cultural impact my decisions or the decisions of others have on the entire group. Particularly with individuals from countries with , they may tend to not speak up in the group. In addition, if a member is particularly aggressive, individuals from a country with high power distance may simply defer. Still further, many individuals have different orientations in regards to short-term and . I need to do a better job of identifying these orientations in my leadership and management style. Particularly in America, decisions are often based on short-term orientation, which may be a detriment to long-term performance. As such, I need to weight the cost and benefits of both approaches to make the appropriate decision.


1) Manfred F.R. Kets de Vries The Dark Side of Leadership – Business Strategy Review 14(3), Autumn Page 26 (2003).

2) Stroh, L.K., Northcraft, G.B., & Neale, M.A. (2002). Organizational behavior: A management challenge. Mahwah, NJ: Lawrence Erlbaum.

3) Paul C. Dinsmore et al. (2005) The right projects done right! John Wiley and Sons, 2005. ISBN 0-7879-7113-8. p.35-42

4) Lewis R. Ireland (2006) Project Management. McGraw-Hill Professional, 2006. ISBN 0-07-147160-X p.110- 116

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