Management Theories: A Comparison With Finance, Accounting, And Experimental Psychology

Management Theories

Discuss about the Management theories.

The theories of management are vast in nature and its branches are diversified in various areas. The paper sheds some light on management being the concept or not. The other terms are also highlighted in the analysis that the fields of finance, accounting or experimental psychology are precise than management theories or not. The discussion is related to the theories of management are same as the theories of finance and science. If the theories are same then which are present in management and will they matter when applied in real life situations or not (George, Haas & Pentland, 2014). The paper discusses about the various concepts related to the management and its theories.

The main aim of the paper was to know about the concepts and theories of management are relevant and wider than the theories of finance and accounting. Management is nothing but an art of getting work done from others. Management study is new than the study of the physics, finance and psychology (Nespor, 2014). Understanding the theories of management is equally important as these theories are derived the behaviour and nature of human. The key to business management is to increase the productivity of the organization. Management is an art of doing work from others. Theories of management are considered to be collecting the ideas to form a general rules, regulation to manage the business. The managers and supervisors are in relation to the organization knowledge and its goals. The implementation of this will require achievement of the objectives. The motivation of the employees will also boost up and set a higher standard for the employee (Hill, Jones & Schilling, 2014).

Management theories applied in the organization to help the working of the business. Its productivity and service both will increase. Not every manager is using the single theory of management or concept of management. These principles and concepts differ from organization to organization (Meyers & van Woerkom, 2014). These management principles are flexible in nature. These are applied according to the type and nature of the organization. As in the organization, employees are working, and understanding the nature and behavior of the employee is unpredictable. Human resources are difficult to understand so as the environment. Normally organizations use a combination of the management theories in practice (Haslam, Van Knippenberg, Platow & Ellemers, 2014).

The management theories are wide and descriptive in nature. These theories talk about the scientific ways of doing a work, administration of management activities, the bureaucratic theory of management and behavior of the individual in the organization. Science theory of management discusses the quantitative matters for decision making. It especially deals with the development of specific mathematical tools to aid in decision making and problem-solving. This theory holds that managing the organization and human resources are rational and logical process. Another theory of management of administration talks about the people behavior and perception in the organization. Administration management theory is more people oriented. This theory focuses on the work done by the people in the organization in short period of time (Kolb, 2014).

Finance

Finance has a very specific role in the organization. Finance field is also large as compared to the management. The study of finance includes the study of money and other assets. Managing and profiling the risk in the project, control, and management of assets is includes in the study of finance theory which will remain same in every type of organization whether it is for profit motive or not for profit organization (Anheier, 2014). Finance has a benefit that its theory will not have to change as changes taking place in the environment as done in the management theories. Finance theories can work in a dynamic environment without changing rules and policies. In simple terms, finance is basically allocation of funds for a particular period of time in a particular project (Piazza & Castellucci, 2014).

In finance, the asset is treated as an economic theory and adds some value to the economy. The finance asset theory deals with the valuation of assets, estimation of liabilities, taxation, growth potential etc. Both finance and management are related to the concepts of microeconomics and macroeconomics. But their theory of dependents in the environment will be somehow similar and dissimilar (Tirole, 2010). Most factors in finance are not like the same as in management. Finance is comparatively more precise and short as compared to the management. In finance, all the principles and rules are applied exactly what they are in real whereas in case of management all the principles are applied with the modification in them. These modifications in principles of management are done by the manager to get the best result out of that.

In management theories, employees play a major role in the governance of any organization. Management theory of Henri Fayol focuses on doing the single type of activity to get specialization in its working and get the advantage of the division of labor. Management theory is too vast that they also focus on the decision making criteria followed in the business. The company should opt for the centralization or decentralization. Decision-making process in management also depends on the type of labor force. If the labor force is skilled then the decentralization can be implemented in the organization. Decentralisation here means all the powers are distributed in the hands of employees or lower level staff. If the labor force is not skilled then the company has to go for the centralization in its business operation. Centralisation here means that all the power in one hand only (Hayes, 2014).

Accounting

In management theory, the human element is more difficult to understand, doubtful and complex than are the physical elements learn in the physics and accounts. Previously, perspectives of the management are emphasized on the logical, rational and systematic approach did not produce any satisfactorily results. As a result, more qualitative approaches will come into existence in the business. The management of business is more than a precise measurement. As management are an art, science, and profession. The nature of human in the organization will vary according to the situations and conditions prevailing in the company (Baum, 2016).

Accounting theories are set of assumptions and methodologies used in the study and applied in the financial reporting of principles. Accounting theory is also vast in its field. Accounting has many different concepts, principles, conventions, and regulations. Measurement, processing, and communication of financial information in accounting is done by the company to know the economic entities such as business and corporations profits and losses. Accounting is used for doing all the calculation part in the financial structure of an organization. Accounting is done by the organization to evaluate its business and profitability. The revenues, sales and other things in books of accounts are recorded on the basis of the accounting system. All the cost and expense of a business are calculated by the accounting theories only. This system has many roots and branches which makes it large (Baum, 2016).

The theory developed in accounting is based on the quantitative methods. Many assumptions are made in the methods when applying in the business. As business is operating in the dynamic environment in which regular changes are taken place. Changes done in the tax rate will impact the accounting; changes in the prices by the supplier will impact the sales and demand for the business. Other than this there are many factors which influence the accounting to be fluctuating in nature irrespective of its theories given by the researchers. The theories given by the accounting researchers are wide in nature and concept (Wynne, 2016).

A management theory comprises of five functions. These five functions include the planning, organizing, staffing, directing and controlling the operations of the management. Managers use the resources while applying these principles to operations and get the best return out of it with efficient utilization of resources (Czarniawska, 2014). These functions are applied in all the organization and are helpful in the utilisation of resources of the business. The application of these principles is universal in nature. Management is applied to all the places hospital, school, and business: profit and not for profit organization.

Experimental Psychology

Psychology can be treated as science. And science can be treated as the science of management. Scientific principles of management are given the Taylor. Taylor has compared the science with the management and come out with the result that the management some features are also present in the science. Like in science there is the systematic body of knowledge like books and written materials are available both in science and management so this feature of science is present in the management. Another feature can be the repeated experiments. In psychology, the psychologist applies the same theory and principles to each and every patient but get the different results. In management theory also, the principles are applied to the individual and individual will react in their own way (Andrews & Bonta, 2014).

Scientific principles represent the basic truth about a particular field of inquiry same in the case of psychology. These principles are applied in all the possible situations irrespective of nature and type of organization. In Psychology also, there is set of rules and books are written. These rules and principles are learned by the specialist. These principles are applied to the individual innovativeness. For instance, a manager of Tesco Company has read and learns all the same principles which other managers have in their study but then also the Tesco manager is doing well in the environment. This is because of the innovativeness used by the manager in the implementation of management principles. Some managers apply these principles differently and other applies it as they have learned. So basically principles learned by all the managers are similar but the implementation done by the individual will differ (Garvey, 2014).

Same in the case of Psychology all have learned the same theories, but applying them to the environment in the human will vary by the individual (Beehr, 2014). The idea in the field of management will come up with the time and manager gains experience from the market. Higher the experience, higher will be the knowledge of a manager. Experience in the market will be gained only when the manager is taking the continuous decisions in the dynamic environment (Sekaran & Bougie, 2016).

From the above discussion, it can be concluded that the management theories are not precise as theories of finance and accounting. This is the reason that the management theories keep on changing or get invalidation when a new theory comes into existence. As the management theories are applied to the human beings and human beings dynamic in nature. Each and every individual has different perception in the organisation. Every employee has come from a different background and culture so management of people is the way through which people can be managed properly. Finance and accounting theories are not even similar to the theories of management. They have the fixed rules to apply in every organisation. They do not need any changes according to the changes taking place in the environment. On the other hand, the psychology has certain similarities with the management theories. But then also they are not as big as the theories of management.

References

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Anheier, H.K. (2014). Nonprofit organizations: Theory, management, policy. Oxon: Routledge.

Baum, F. (2016). The new public health (No. Ed. 4). Clarendon Press: Oxford University Press.

Beehr, T.A. (2014). Psychological stress in the workplace (psychology revivals). Oxon: Routledge.

Czarniawska, B. (2014). A theory of organizing. USA: Edward Elgar Publishing.

Garvey, W.D. (2014). Communication: the essence of science: facilitating information exchange among librarians, scientists, engineers and students. Oxford: Pergamon Press.

George, G., Haas, M.R. & Pentland, A. (2014). Big data and management. Academy of management Journal, 57(2), pp.321-326.

Haslam, S.A., Van Knippenberg, D., Platow, M.J. &Ellemers, N. (2014). Social identity at work: Developing theory for organizational practice. UK: Psychology Press.

Hayes, J. (2014). The theory and practice of change management. London: Palgrave Macmillan.

Hill, C.W., Jones, G.R. & Schilling, M.A. (2014). Strategic management: theory: an integrated approach. Boston: Cengage Learning.

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Nespor, J. (2014). Knowledge in motion: Space, time and curriculum in undergraduate physics and management. Oxon: Routledge.

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Sekaran, U. & Bougie, R. (2016). Research methods for business: A skill building approach. Hoboken, New Jersey: John Wiley & Sons.

Tirole, J. (2010). The theory of corporate finance. New Jersey: Princeton University Press

Wynne, B. (2016). Misunderstood misunderstanding: Social identities and public uptake of science. Public understanding of science, 9(2), 105–22.