13 Amazing Benefits Of Administrative Management Theory

Written By Shahzaib Arshad

Why did we feel the need to develop an administrative management theory? In the past times, organizations were managed in an informal way. There was no accountability.

No one had to give reports to anyone except the owner of the organization. This created a master-slave relationship.

At this point, we felt the need for the division of labor in an organized way. This led to the creation of the administrative management theory.

Administrative Management Theory And How It Works:

Here we are going to discuss how this theory came to effect.

There are also some other facts we are discussing like principles and the importance of administrative management theory.

If you to know all the details then do check below:

1. The Early Story Of Administrative Management Theory:

During the late 19th century financiers invested in heavy industry projects. Now they felt the need to channelize their labor force.

How Administrative Management Theory Came To Effect
The Early Story Of Administrative Management Theory

How was it possible to divide the respective authorities into all the members? Administrative management theory came to give the answer.

It explains the division of labor. Every member of the administration has their roles which had their respective responsibilities.

All the workforce is organized in such a way to maintain check and balance.

2. How This Theory Has Been Working:

The principles of this theory are the golden rules of work division. They are a clear manifestation of how the working force should be organized.

With the changing business scenarios, we made additions to this theory.

In the past times, managers used to make decisions on their own without any discussion. This theory made them realize they were wrong.

It reduced the workload and increases efficiency. The final result was effective management with better work efficiency.

SEE ALSO: Classification Of Business – A Complete Guide

3. How It Benefited Companies And Industries?

The industrialists could feel the importance of it. The company owners realized that they alone cannot take all the workload.

Everyone is the master of his own field. Also, no one can be the master of all trades. This fact was evidence of the need to work in a team.

Importance Of Administrative Management Theory
How It Benefited Companies And Industries

The demands of the new market trends were also the need of time.

13 Benefits Of Administrative Management Theory:

Here we are going to discuss 13 benefits of administrative management theory.

If you are interested and want to know the benefits of administrative theory then do check below:

1. The Clear Chain Of Command:

The first principle guides you to develop the organization in a hierarchical way.

We should spread the workforce and there should be a clear distinction between authorities.

Everyone in the organization should have the powers necessary to fulfill his duties. Or we can say that there should be a division of power from top to bottom.

Hierarchical Workforce
Hierarchical Workforce

Instructions should flow down from high-level authorities to the ground-level workforce. There should be a check at each level to ensure plan validity.

It ensures the formation of a directive and successful plan. So, we get a natural system of check and balance.

2. Defined Departments And Divisions:

We should have diversified divisions in the organization.

Each division should have its respective duties. But the end goal of all those divisions should be the same.

The end goal may be the achievement of any company goal.

3. Administrative Management Theory – Everyone Follows One Goal:

Let’s have an insight into this point with a simple example. Take for instance a clothing brand and there will be a production unit.

We need to market their new varieties. There will be a marketing unit. The function of this unit is to market the new collection.

It designs various marketing campaigns and business strategies.

Finally, there will be a sales unit. The concern of this unit is to regulate sales. So, we see that all these have specialized functions.

But the end goal is the same. All these units need the market recognition and sales of their brand.

4. There’s A Defined Workforce:

All this division of labor is of no use unless you have leadership. The most important thing is to define the power authority.

Suppose a company has a board of directors. They are responsible for making policies for the organization.

They then pass on the instructions to the president of the company.

Division Of Labor In Administrative management theory
Division Of Labor

The president shares these policies with the top-level managers. They finally circulate the instructions within their respective departments.

In this way, a division of power decreases the workload and increases efficiency.

5. Administrative Management Theory Brings Regulation:

The need to maintain discipline may change from time to time. What does discipline mean in an organization?

It is to maintain the work boundaries of each person. No one should have the authority to interfere in the work of the other.

We should regulate the work hours. Team members should meet the deadlines in the prescribed time.

All these things play an important role to maintain discipline.

6. A Clearly Defined Authority:

There should be only one directive power. All people should have the same goal.

We should see no disparity in the work. The commands must be the same for all. We should give no special privilege to anyone.

It also serves to maintain discipline in the organization. Unanimity in directions helps to achieve success.

7. The Next Step Is Known:

There should be a plan to follow. All the managers should make plans for their division.

Milestones and deadlines must be clear and defined. There should be no randomness while doing work.

Plan To Follow In Administrative Management Theory
The Next Step Is Known

All the team members should follow the same plan.

8. No One Possesses Separate Interests:

No one should get any special interest. Personal interests should not collide with the company’s interests.

All should work for the same cause and not for any personal cause. All the members should receive the same fair treatment.

Any monetary or non-monetary reimbursement to anyone breaks the discipline.

So, the rules should be the same for everyone including the managers

9. Perfectly Equipped Work Cabins:

The proper sitting arrangement also plays role in increasing work efficiency. The working space should be clean and tidy.

All the necessary stationary should be available. Your environment influences you a lot.

You can even test it out yourself. Think of someday when you came back home and your room was a mess.

You had to complete an assignment but due to the messy environment, you couldn’t concentrate.

It is a common experience you all might have encountered. So, a proper working space is also necessary for meeting a success.

10. Balance And Strength Is The Key:

There should be stability in the organization. The managers should work to maintain their workforce.

The frequent employee turnover created instability. The managers should keep a balance between all employees.

He should be strict and considering it at the same time. Or we can say he should maintain discipline.

He should respect the needs of all the employees.

Stability In Organization
Balance And Strength Is The Key

At the same time, he should demand quality work within the given time.

The employees must feel at home while working. But they should be aware of meeting the deadlines.

11. Everyone’s Voice Matters:

The opinion of everyone should be respected. Everyone should have the chance to take part in the decision-making process.

While making plans the managers should consider the opinions of their workforce.

A plan is made with the will of all. When we agree to some condition, we work the meet the goal.

The employees will feel that the plan is according to their will.

In this way, all the team members will work with more dedication. It also reduces the chances of a conflict. Disagreements are rare to take place.

12. Administrative Management Theory – Teamwork Makes The Dreamwork:

Team solidarity is very important in teamwork. No division can succeed without team unity.

All the team members should work in agreement with each other.

The managers play an important role in this respect. We spread the work and all the team members complete the work in coordination with each other.

In this way, we can complete the work in a short period of time. Also, the quality of the work is commendable.

See Also: What Is A Cross-Functional Team 

13. A Good Way To Settle Disputes:

We should manage conflicts in an effective way. The difference of opinion gives you a multi-dimensional image.

You can look into the matter from every perspective. Rather than making it a problem make it a tool to succeed.

Best Way To Manage Conflicts
A Good Way To Settle Disputes

Try to find out the most suitable way out of it.


This theory was a revolutionary one. It can be a guiding star for all the managers.

All those people who are the authority in any organization can seek guidance from it.

It identifies how you should manage your team in an effective way. It is not important how much workforce you have.

What matters is how you manage it. By following all the above-mentioned principles, you can achieve success.

These principles will help you in maintaining a constructive environment.

Manage your team so that they may feel at home. Never compromise on the goal.

This article will help you out in forming effective administrative management.

Drop a comment about what you like the most.

Last Updated on 2 months by Assma Riaz

Shahzaib Arshad
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