Administrative management is concerned with the design and management of an organisation. In this lesson, you'll learn what administrative management theory is as well as its key components.
Administrative management theory attempts to find a rational way to design an organization as a whole. The theory generally calls for a formalized administrative structure, a clear division of labor, and delegation of power and authority to administrators relevant to their areas of responsibilities.
Administrative Management Theorist:
- Henri Fayol (1841-1925): Fayol was born in France, where he worked for a coal-mining business. He developed 14 administrative principles for organizational structure and management.
- James D. Mooney (1884-1957): Mooney studied mechanical engineering and eventually became a key member of General Motors' top management team. In 1931, he wrote Onward Industry!The book is considered by many scholars to be a significant contribution to administrative management theory.
- Luther H. Gulick (1892-1993): Gulick is often considered the 'Dean of Public Administration.' He applied administrative management theory principles to government.
Key Component Of Organisation:
Administrative management theory involves many important concepts, but these concepts can usually be placed into the following broad categories:
- Formalized administrative structure- According to this theory, you should design an organization using a very formalized structure with clear lines of authority from the top down. This is a hierarchical structure.
For example, consider a large corporation. At the top is the board of directors who give directions to the CEO, who in turn gives directions the vice presidents of each corporate division. The vice presidents will then give directions to their middle managers, who in turn give directions to supervisors down to individual employees.
- Division of labor- A second key structural feature of an organization designed by administrative management theory is a clear division of labor between the organization's departments. Each department is responsible for a particular aspect of the organization's activities towards the achievement of organizational goals.