modern approach of management (1)

8/4/2019 Modern Approach of Management (1)

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1.SYSTEM APPROACH

2.CONTINGENCY APPROACH

Modern Approach of

Management



1. System Approach

The system approach of management represents newthinking and the latest developments that occurred inthe field of organizations and management.

It was developed after 1950, placing emphasis oninterdependence and inter-relationship which existsamong various activities and components of organization.

The term ‘system’ may be defined as a set of

interrelated and interacting components assembled in aparticular sequence so as to produce some results.

These components may also be viewed as sub-systemsof a larger system.



System approach

The various sub-systems that are involved in thefunctioning of a larger one are closely related to eachother and to a system as a whole.

Similarly, these sub-systems interact with each other bygetting influenced and influencing others.

Every system has a sub-system and every sub-systemmay be considered as a system because it may havesub-systems.

Thus, in a system, there is a wheel within a wheelmaking and contributing to a larger system.

Beyond these set boundaries there exists an externalenvironment which is outside the control of the system.



Types of systems

Systems may be broadly classified into four categories – physical, mechanical, biological and social.

Physical systems are a part and parcel of nature or thesub-system of it.

These are totally governed and regulated by nature.e.g.. Solar system, seasons, rivers etc.

Mechanical systems refer to those devices that arebased on technology.

These systems have been innovated by human beingsfor their betterment but are totally closed systems innature.



A system may be either an open system or a closedsystem or a partially open and partially closed one.

On the other hand, biological and social systems arerelatively open systems.

They interact with external environment on a regularbasis and depend on it for the supply of necessaryinputs.

To study an organization as a system, various system

approaches have been developed. Among these, the ‘socio-technical theory’ of organizing

the managing work is considered more relevant.



Socio-technical theory

These two should be considered as a supportive sub-system of the organization.

This approach of designing work for employees in theorganization is based on the following principles:

1. jobs and work groups in the organization should becreated on the basis of task requirements. The tasksthat are small components of the job may be highlyrelated to each other. Such tasks should be put in one

group and should be performed by employees workingin related roles.



2. besides wages, safety and security demands, the jobmust also fulfill the psychological and socialrequirements of job holders. In order to make jobs moremeaningful, the right to exercise control over it should

be given to the job holders. The elements of mutualhelp, social support, decision making and planningshould be introduced into the jobs and work groups.

3. the most important principle of the socio-technical

theory is to consider the organization as an openadaptive system. According to this principle, theorganization operates in an environment that has adirect impact on its functioning.



An organization is an open adaptive system and has thefollowing features:

1. interaction

2. input-process-output model 3. integration of sub-systems

4.multiplicity of objectives

5. sub-systems.



1. interaction

An organization is an open system and interacts with itsenvironment on a regular basis.

Its functioning is greatly influenced by the changestaking place in the environment.

To some extent, the organizations in a collective formand autonomous organizations having huge resources attheir disposal may also have some impact on externalenvironment.



2. Input-process-output model

The organization is considered as an impute-process-output system.

It procures resources from society, which are known asinputs and these are processed and converted intooutput.

The output is in the form of goods and services that aregiven back to society.



3. Integration of sub-systems

The organization operates through many sub systems.

These sub systems may be technical, social and powersystems of production, distribution, finance, purchase,personnel etc.

These sub systems are integrated and coordinated so asto facilitate the smooth function of the organization.

It is done through the process of communication,balance and decisions.



4. Multiplicity of Objectives

The organization is a collective system.

It involves the interest of many groups such as owners,customers, employers, financiers, government andsociety.

To serve the interests of these groups, the organizationis bound to pursue two or more objectives at a time.

it ultimately leads to multiplicity of objectives.



5. Sub-systems

The organization is a sub-system of a larger system andhas many sub-systems in it.

The sub-systems of an organization are closely relatedwith each other.

They interact with each other and supplement thefunctioning of each other so as to contribute to theoverall functioning of the organization.

These sub-systems derive strength and power from theorganization and in turn make a contribution to theorganization.



Evaluation of System Approach-merits

The system approach encourages meaningful analysis of an organization and its various sub-systems orcomponents and facilitates their management.

It provides a sound basis for understandingorganizations and their problems.

System theorists strongly believe that the actions anddecisions of managers influence and in turn areinfluenced by many organizational and environmental

variables.



Evaluation of system approach -merits

Managers must take into account interdependencies,interactions and interrelationships among the variouscomponents of the system at the time of takingdecisions.

They should also base decisions on the ground realitiesof both internal and external environment.

Thus, the system approach facilitates the application of both the process of analysis and synthesis and

differentiation and integration by relating the sub-systems of an organization from the lowest to thehighest level of the organization.



System approach – merits.

Another positive aspect of the system approach is that itintegrates various management approaches in ameaningful way.

Although the classical and behavioral approaches placean emphasis on different aspects, these two are greatlyinfluenced by the system approach.



Evaluation of system approach -demerits

Some management scientists criticize the systemapproach as purely theoretical, conceptual, vague andabstract.

They argue that it has only an intellectual appeal andcannot be applied to practical situations.

In the context of management of a modern organizationit is considered simply a way of thinking rather than oneproviding solutions to problems.

The system approach neither offers any tool ortechnique for analysis and synthesis nor does itrecognize the differences that exist between the varioussystems.



2. Contingency Approach

The contingency approach of management andorganization based on an analysis of situational variableswas first proposed by Fred E. Fiedler.

The contingency approach is related to systemapproach, and represents a comparatively new line of thinking among management scientists.

This approach basically discounts the concept of universal application of managerial principles and

recommends that the application of these principles issubject to appropriateness of the situation.



Contingency approach

It is a systematic attempt to determine the package of management techniques, approaches and practices thatare appropriate to a specific given situation.

Thus, according to the advocates of this approach,managers, instead of applying the principles andpractices of management in an uniform manner to everysituation, should study, analyze and diagnose thesituation, understand situational requirements and then

prepare a package of management principles andtechniques to deal with it effectively.



Nature of contingency approach

The contingency approach discounts the theme of universal application of management principles.

It further upholds the relevance and utility of situationsas well as external factors for developing a suitableaction program.

Outwardly, it appears that the contingency approach ismerely based on common sense because it has anintuitive appeal that there cannot be a single best way

of doing things in every situation.



It is merely a matter of common sense that oneparticular solution cannot be universally applicable to allsituations regardless of their individual characteristic andfeatures.

Thus, managers should have flexibility and freedom todevise a suitable course of action for a given situation.

It is because in real life the success of any managementtechnique is largely conditioned by the situation.



Contingency approach - merits

This is a significant addition to the existing body of management knowledge because it places moreemphasis on the appropriateness of management toolsand techniques for a specific situation.

It offers practical direction to the system approach tochoose a suitable form of departmentalization forgrouping activities, style of leadership and supervision,to determine the degree of centralization and

decentralization and more appropriate motivationalprocesses as per the demand of the situation.



Contingency approach -merits

Some management scientists believe that thecontingency approach is a compromise between thesystem approach and a purely situational perspective.

It is based on open system thinking, is pragmatic andencourages multivariable analysis.

Contingency approach has wide-ranging applicability inorganization and management.

This is because every manager is preoccupied with theresponsibility to develop an alternative course of actionsuitable for a specific situation.



Contingency approach - demerits

This approach is criticized by many managementscientists on the ground that it is totally a practicalapproach without being supported by the requiredtheoretical and conceptual framework.

Managers experience difficulty in analyzing situationsand discovering appropriate management techniques inthe absence of necessary research devices andgeneralizations to understand the behavior of a

situation. However the contingency approach may beregarded as a promising step towards the developmentof management theory and practice.

modern approach of management (1)

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