Future Business Leaders of America (FBLA) Business Management Practice Test

Which management principle emphasizes the importance of having a clear hierarchy in a company?

1. Scientific management

2. Human relations management

3. Administrative management

4. Contingency management

The correct answer is: Administrative management

The emphasis on having a clear hierarchy in a company is primarily associated with administrative management. This principle focuses on establishing a structured organization that outlines different levels of authority and responsibility. It advocates for clear lines of communication and delineates roles within the organization, enabling efficient decision-making and workflow. Administrative management theorists, such as Henri Fayol, introduced concepts like the division of labor and unity of command, which are fundamental in defining how authority is distributed across a company. This structured approach helps to ensure that employees understand their specific duties and who they report to, which is crucial for maintaining order and efficiency in larger organizations. In contrast, other management approaches have different focuses. Scientific management, for instance, is centered around optimizing work processes for increased productivity rather than establishing hierarchy. Human relations management emphasizes interpersonal relationships and employee satisfaction, which does not primarily focus on organizational structure. Contingency management considers the variability of factors affecting organizational performance and adapts management styles accordingly, also without a primary focus on creating a clear hierarchy. Thus, administrative management stands out in promoting a structured organizational framework that highlights the importance of a clear hierarchy.