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UNIT I : Management, nature and scope of management, functions and process of

management, evolution of management theory from Taylor, Fayol, Drucker to present,
Growth of professional management in India, Ethics in management

MEANING

ORGANIZATION: Group of people working together in a systematic manner to achieve

a set of goals.
MANAGEMENT IN ORGANIZATION

MANAGEMENT: A set of activities (including planning and decision making,

organizing, leading, and controlling) directed at an organizations resources (human,
financial, physical, and informational) with the aim of achieving organizational goals in
an efficient and effective manner.
Efficient Using resources wisely and in a cost-effective way.
Effective Making the right decisions and successfully implementing them

Management is the process of designing and maintaining an environment in which

individuals, working together in groups, efficiently accomplish selected aims.

George R Terry, management is distinct process consisting of planning, organizing,

actuating & controlling performance to determine & accomplish the objectives by the use
of people & resources
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Management is that function of an enterprise which concern itself with the direction &
control of various activities to attain the business objectives.
NATURE OF MANAGEMENT

Management is universal: Basic principles of management can be applied in all

managerial situations regardless of size, nature and location of the organization.
Universality of managerial tasks and principles also implies that managerial skills can be
transferrable and managers can be trained and developed
Multidisciplinary: Because it includes knowledge, information from various disciplines
like economics, statistics, psychology, sociology, operations research etc is required.
Management integrates ideas and concepts taken from these disciplines and presents
newer concepts which can be put in to practice for managing organizations.
Management is dynamic: Management has framed certain principles which are flexible
in nature and change with the changes in the environment in which the organization
exists.
Is a system of authority: A manager is supposed to get things done, rather than doing
things himself by using authority. Authority means right to give orders and power to
obtain objective from subordinates. Its a rule making and rule entering body in an
organization
Management is an activity: Management is a process of organized activity which is
concerned with the efficient use of resources of production. Resources include materials,
money & people in the organization.
It is a purposeful activity: It is concerned with the achievement of an objectivity these
functions such as planning, organizing, staffing, directing & controlling
It is concerned with the efforts of a group: management is concerned with management
of people & not the direction of thugs. It inspires & motivates works to put forts their
efforts to the maximum extent.
Management is getting things done: Management is the art of getting things done their
& with people in formally organized groups.
It applies economic principles: Management is the art of applying the economic
principles that underlie the control of men & materials in the enterprise under
consideration.
Involves decision-making: Management in the decision making process & the decisions
are involved in all the functions of management.
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It Co-ordinates all activities & resource: It is concerned with the Co-ordination of all
activities & resources its various functions to attain the stated objectives.

SCOPE OF MANAGEMENT / FUNCTIONS

Planning Determines in advance what should be done. It is looking ahead and
preparing for the future. It is a process of deciding the business objectives and charting
out the methods of attaining those objectives.
Organizing To organize a business is to provide it with everything useful to its
functioning: personnel, raw materials, tools, capital. All this may be divided into two
main sections, the human organization and the material organization. Structure results
from identifying and grouping work, defining and delegating responsibility and authority,
and establishing relationships.
Staffing: selecting and training individuals for specific job functions and charging them
with associated responsibilities.
Directing Moving towards its defined objectives. Directing involves three sub-
functions-communication, leadership and motivation. Communication is the process of
passing information and understanding from one person to another. Leadership is the
process by which a manager guides and influences the work of his subordinates.
Motivation means arousing desire in the minds of workers to give their best to the
enterprise.
Controlling Manager must ensure that everything occurs in conformity with the plans
adopted, the instructions issued and the principles established. Involves three elements.
Establishing standards of performance. Measuring current performance and comparing it
against the established standards. Taking action to correct any performance that does not
meet those standards.
Coordinating: integration of activities of the separate parts of an organization to
accomplish organizational goals
Reporting: process of executives keeping superiors and subordinates informed about
what is going on
Budgeting: formal quantitative statement of resources allocated for planned activities
over stipulated periods of time
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ELEMENTS OF MANAGEMENT PROCESS

Planning: Planning is the primary function of management. It involves determination of a course

of action to achieve desired results/objectives. Planning is the starting point of management
process and all other functions of management are related to and dependent on planning function.
Planning is the key to success, stability and prosperity in business

Organising: Organising is next to planning. It means to bring the resources (men, materials,
machines, etc.) together and use them properly for achieving the objectives. Organisation is a
process as well as it is a structure. Organising means arranging ways and means for the execution
of a business plan. It provides suitable administrative structure and facilitates execution of
proposed plan.

Staffing: Staffing refers to manpower required for the execution of a business plan. Staffing, as
managerial function, involves recruitment, selection, appraisal, remuneration and development of
managerial personnel. The need of staffing arises in the initial period and also from time to time
for replacement and also along with the expansion and diversification of business activities.
Every business unit needs efficient, stable and cooperative staff for the management of business
activities

Directing (Leading): Directing as a managerial function, deals with guiding and instructing
people to do the work in the right manner. Directing/leading is the responsibility of managers at
all levels. They have to work as leaders of their subordinates. Clear plans and sound organisation
set the stage but it requires a manager to direct and lead his men for achieving the objectives.

Coordinating: Effective coordination and also integration of activities of different departments

are essential for orderly working of an Organisation. This suggests the importance of
coordinating as management function. A manager must coordinate the work for which he is
accountable. Co-ordination is rightly treated as the essence of management. It may be treated as
an independent function or as a part of organisms function. Coordination is essential at all levels
of management. It gives one clear-cut direction to the activities of individuals and departments

Controlling: Controlling is an important function of management. It is necessary in the case of

individuals and departments so as to avoid wrong actions and activities. Controlling involves
three broad aspects: (a) establishing standards of performance, (b) measuring work in progress
and interpreting results achieved, and (c) taking corrective actions, if required. Business plans do
not give positive results automatically. Managers have to exercise effective control in order to
bring success to a business plan.
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Motivating: Motivating is one managerial function in which a manager motivates his men to give
their best to the Organisation. It means to encourage people to take more interest and initiative in
the work assigned. Organisations prosper when the employees are motivated through special
efforts including provision of facilities and incentives

Communicating: Communication (written or oral) is necessary for the exchange of facts,

opinions, ideas and information between individuals and departments. In an organisation,
communication is useful for giving information, guidance and instructions. Managers should be
good communicators. They have to use major portion of their time on communication in order to
direct, motivate and co-ordinate activities of their subordinates.

MANAGERIAL ROLES

INTERPERSONAL ROLES
Figurehead Every manager has to perform some duties of a ceremonial nature, such
as attending the wedding of an employee, taking an important customer to lunch and
so on.
Leader As a leader, every manager must motivate and encourage his employees.
Liaison Every manager must cultivate contacts outside his vertical chain of
command to collect information useful for his organization.

INFORMATIONAL ROLES
Monitor The manager has to perpetually scan his environment for information,
interrogate his liaison contacts and his subordinates, and receive unsolicited
information, much of it as a result of the network of personal contacts he has
developed.
Disseminator The manager passes some of his privileged information directly to his
key subordinates who would otherwise have no access to it.
Spokesman - A manager is also required to spend a part of his time in representing
his organization before various outside groups which have some stake in the
organization. These stake holders can be government officials, labor unions, financial
institutions, suppliers, customers etc.
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DECISIONAL ROLES

Entrepreneur The manager proactively looks out for innovation to improve his
organization. Innovation means creating new ideas, which may either result in the
development of new products or services, or finding new uses for the old ones.
Disturbance Handler The manager has to work reactively like a fire fighter. He
must seek solutions of various unanticipated problems-a strike may loom large, a
major customer may go bankrupt and so on.
Resource Allocator The manager must divide work and delegate authority among
his subordinates.
Negotiator The president of a company may negotiate with the union leaders on a
new strike issue, the foreman may negotiate with the workers a grievance problem
and so on.
LEVELS OF MANAGEMENT

TOP LEVEL MANAGEMENT

Top Managers Make up the relatively small group of executives who manage the
overall organization. Titles found in this group include president, vice president and
chief executive officer (CEO). Top managers create the organizations goals, overall
strategy and operating policies.
Functions of Top Management
Determine objective of the organization. They relate to profit, business growth, survival,
prestige, competitive pricing, marketing method.
Frame the policy: To frame policies & check out plans to carry out the objectives &
policies, policies may relate to different aspects of the organization.
Organizational frame work: Top management determines the organization structure for
the purpose of executing the plans
Assemble the resource: Execute the plans; the resources of men, machines, materials &
money have to assemble.
Control the operations the organization: Top management also.

MIDDLE LEVEL MANAGEMENT

Are largest group of managers in most organizations. Common middle-management titles
include plant manager, operations manager and division head. Middle managers are
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responsible primarily for implementing the policies and plans developed by top managers
and for supervising and coordinating the activities of lower-level managers.
Functions of Middle Management
To execute the various functions of organization so that the top management gets enough
time to look after their responsibilities.
To cooperate among themselves, with the top management & the supervisors so that the
organization functions smoothly
To achieve coordination between the different parts of organization
To develop & train employers in the organization for better functioning & for filling up
vacancies that may arise in future.
To build company spirit where all are working to provide a product or service wanted by
consumer.

LOWER LEVEL MANAGEMENT

First-Line Managers Supervise and coordinate the activities of operating
employees. Common titles for first-line managers are supervisor, coordinator and
office manager.
Functions of supervisors
To issue order & instructions to the workers & to supervise & control their work.
To plan activities of the section.
To assign jobs to the workers
To direct & guide the workers about work procedure.
To arrange for the necessary tools, equipment, material etc.
To solve the problems of workers
To maintain discipline among the workers & to develop them the right approach to work.
To inform the management about the problems of workers which are not solved at this
level?
To maintain good human relations.
To build a high group morale among workers.
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DEVELOPMENT OF MANAGEMENT THOUGHT

During the last hundred years, management has become a more scientific discipline with
certain standardized principles and practices. The evolution of management thought
during this period can be studied in three parts:
1. Early classical approaches, represented by scientific management, administrative
management and bureaucracy.
2. Neo-classical approaches, represented by human relations movement and behavioral
approach.
3. Modern approaches, represented by quantitative approach, systems approach and
contingency approach

EARLY CLASSICAL APPROACHES

Scientific Management
Frederick Winslow Taylor is considered to be the Father of Scientific Management.
Taylor made several important contributions which are classified under scientific
management.
1. Time and Motion Study- Taylor started time and motion study, under which each
motion of a job was to be timed with the help of a stop watch and shorter and fewer
motions were to be developed. Thus the best way of doing job was found. This
replaced the old rule-of-thumb-knowledge of the workman.
2. Differential Payment Taylor linked incentives with production. Under this plan a
worker received low piece rate if he produced the standard number of pieces and high
rate if he surpassed the standard. Taylor thought that the attraction of high piece rate
would motivate workers to increase production.
3. Drastic Reorganization of Supervision Taylor suggested two new concepts: i)
separation of planning and doing and ii) functional foremanship. Taylor suggested
that the work should be planned by a foreman and not by the worker. Further, he said
that there should be as many foremen as there are special functions involved in doing
a job and each of these foremen should give orders to the worker on his specialty.
4. Scientific Recruitment and Training Taylor said that the management should
develop and train every worker to bring out his best faculties and to enable him to do
a higher, more interesting and more profitable class of work than he has done in the
past.
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5. Intimate Friendly Cooperation between the Management and Workers Rather

than quarrel over whatever profits there were, both management and workers should
both try to increase production. By doing so, profits would be increased to such an
extent that labor and management would no longer have to compete for them. In
short, Taylor believed that management and labor had a common interest in
increasing productivity.
CONTRIBUTION OF GANTT
Gantt saw the importance of the human element in productivity and propounded the
concept of motivation as we understand it today.
He introduced two new features in Taylors incentive scheme which was found to
have too little motivational impact.
First, every worker who finished a days assigned workload was to win a 50 percent
bonus for that day.
Second, the foreman too was to earn a bonus for each worker who reached the daily
standard, plus an extra bonus if all the workers reached it.
Gantt also developed the idea of rating an employees work publicly. Every workers
progress was recorded on individual bar charts, inked in black on days he or she
completed the standard, and red on days he or she fell below.
Gantt originated a charting system for production control. This system called the
Gantt chart is still in use today.

ADMINISTRATIVE MANAGEMENT

Henri Fayol is considered the Father of Administrative Management Theory with focus
on the development of broad administrative principles applicable to general and higher
managerial levels.
Fayol also presented 14 principles of management as general guides to the management
process and management practice. These are as under:
Division of Work Various functions of management like planning, organising,
directing and controlling cannot be performed efficiently by a single proprietor or by
a group of directors. They must be entrusted to specialists in related fields.
Authority and Responsibility As the management consists of getting the work done
through others, it implies that the manager should have the right to give orders and
power to exact obedience. A manager may exercise formal authority and also personal
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power. Formal authority is derived from his official position while personal power is
the result of intelligence, experience, moral worth, ability to lead, past service etc.
Responsibility is closely related to authority and it arises wherever authority is
exercised. An individual who is willing to exercise authority, must also be prepared to
bear responsibility to perform the work in the manner desired.
Unity of Command This principle requires that each employee should receive
instructions about a particular work from one superior only. Fayol believed that if an
employee was to report to more than one superior, he would be confused due to
conflict in instructions and also it would be difficult to pinpoint responsibility to him.
Discipline By discipline we mean, the obedience to authority, observance of the
rules of service and norms of performance, respect for agreements, sincere efforts for
completing the given job, respect for superiors etc.
Unity of Direction It means that there should be complete identity between
individual and organizational goals on the one hand and between departmental goals
inter se on the other.
Subordination of Individual Interest to General Interest In a business concern,
an individual is always interested in maximizing his own satisfaction through more
money, recognition, status etc. This is very often against the general interest which
lies in maximizing production. Hence the need to subordinate the individual interest
to general interest.
Remuneration The remuneration paid to the personnel of the firm should be fair. It
should be based on general business conditions, cost of living, productivity of the
concerned employees and the capacity of the firm to pay.
Centralization If subordinates are not given much role and importance in the
management and organization of the firm and superiors keep the power in their hands
only, it is centralization. The management must decide the degree of centralization or
decentralization of authority on the basis of the nature of the circumstances, size of
the undertaking, these type of activities and the nature of organizational structure.
Order : According to this principle of the 14 principles of management, employees in
an organization must have the right resources at their disposal so that they can
function properly in an organization. In addition to social order (responsibility of the
managers) the work environment must be safe, clean and tidy.
Centralization If subordinates are not given much role and importance in the
management and organization of the firm and superiors keep the power in their hands
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only, it is centralization. The management must decide the degree of centralization or

decentralization of authority on the basis of the nature of the circumstances, size of
the undertaking, these type of activities and the nature of organizational structure.
Stability of Tenure of Personnel In order to motivate workers to do more and
better work, it is necessary that they should be assured security of job by the
management. If they have fear of insecurity of job, their morale will be low and they
cannot give more and better work.
Initiative Initiative means freedom to think out and execute a plan. Employees
should be encouraged to make all kinds of suggestions to conceive and carry out their
plans, even when some mistakes result.
Esprit de Corps This means team spirit. Since union is strength, the management
should create team spirit among the employees.
Equity : The management principle of equity often occurs in the core values of an
organization. According to Henri Fayol, employees must be treated kindly and
equally. Employees must be in the right place in the organization to do things right.
Managers should supervise and monitor this process and they should treat employees
fairly and impartially.
Scalar Chain : Hierarchy presents itself in any given organization. This varies from
senior management (executive board) to the lowest levels in the organization. Henri
Fayol s hierarchy management principle states that there should be a clear line in
the area of authority (from top to bottom and all managers at all levels). This can be
seen as a type of management structure. Each employee can contact a manager or a
superior in an emergency situation without challenging the hierarchy.

BUREAUCRACY

Max Weber is known as the Father of Bureaucracy. He made a study of different

types of business and government organizations and distinguished 3 basic types of
administration in them:
Leader oriented is one in which there is no delegation of management functions. All
employees serve as loyal subjects of a leader.
In tradition-oriented administration managerial positions are handed down from
generation to generation.
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In bureaucratic administration, delegation of management responsibilities is based

on the persons demonstrated ability to hold the position.

IMPORTANT FEATURES OF BUREAUCRATIC ADMINISTRATION

There is insistence on following Standard Rules Weber believed that the authority
in an organization should not be governed by the personal differences of the employer
but it should be governed by standard rules. He said that this would provide equality
in the treatment of subordinates and continuity and predictability of action.
There is a systematic division of work This increases production by improving
efficiency and saving time in changing over from one job to another.
Principle of Hierarchy is followed Each lower officer is under the control and
supervision of a higher one.
It is necessary for the Individual to have knowledge of and Training in the
Application of Rules because these form the basis on which legitimacy is granted
to his authority.
Administrative Acts, Decisions and Rules are recorded in Writing This makes
the organization independent of people besides making peoples understanding more
accurate.
There is Rational Personnel Administration People are selected on the basis of
their credentials and merit and are paid according to their position in the hierarchy.
Promotions are made systematically.

NEO-CLASSICAL APPROACHES
They do not reject the classical concepts but only try to refine and improve them.
The Human Relations Movement
The real inspiration for the movement, however, came from the Hawthorne experiments
which were done by Prof. Elton Mayo and his colleagues at the Western Electric
Companys Plant in Cicero, Illinois. Four parts of the experiment:
Illumination Experiments In this phase, the popular belief that productivity is
positively correlated with illumination was tested. Researchers set up 2 groups of
workers in different buildings. One group called the control group worked under
constant level of illumination and the other group called the test group worked under
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changing levels of illumination. The post-test productivity of the two groups was then
compared and it was found that illumination affected production only marginally.
Relay Assembly Test Room It tried to find out the impact of length of the working
day, rest pauses, their frequency and duration and other physical conditions. A group
of six women workers, who were friendly to each other, was selected for this
experiment. These women workers were told about the experiment and were made to
work in a very informal atmosphere with a supervisor-researcher in a separate room.
The researchers found that the production of the group had no relation with working
conditions. It went on increasing and stabilized at a high level even when all the
improvements were taken away and the poor pre-test conditions were reintroduced.
Following factors were responsible for it:
Feeling of importance among the girls as a result of their participation in the research.
Warm informality in the small group and tension free social relations.
High group cohesion among the girls.\
Interviewing Programme In this phase, they wanted to know as to what were the
basic factors responsible for human behavior at work. For this purpose they
interviewed more than 20000 workers. At first direct questions were asked relating to
the type of supervision, working conditions, living conditions and so on. But since the
replies were guarded, the technique was changed to non-directive type of
interviewing, in which workers were free to talk about their favorite topics related to
their work environment. This study revealed that the workers social relations inside
the organization had an influence on their attitudes and behaviors.
Bank Wiring Observation Room This phase involved an in-depth observation of
14 men making terminal banks of telephone wiring assemblies, to determine the effect
of informal group norms and formal economic incentives on productivity. It was
found that the group evolved its own production norms for each individual worker,
which were much lower than those set by the management. Workers would produce
that much and no more, thereby defeating the incentive system. This artificial
restriction of production saved workers from a possible cut in their piece rates or an
upward revision of their standards by the management and protected weaker and
slower workers from being thrown out of the job.
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BEHAVIORAL APPROACH
Douglas McGregor, Abraham Maslow, Chester Barnard are some of the foremost
behavioral scientists who made significant contributions to the development of the
behavioral approach to management.
Highly critical of the classical organization structures which are built around the
traditional concepts of unity of command, hierarchical authority and line and staff
relationships. These organizations there are a lot of domination of the work place by
managers which causes subordinates to become passive and dependent on them.
Prefer more flexible organization structures and jobs built around the capabilities and
aptitudes of average employees.
Attach great weightage to participative and group decision making because it is felt
that business problems are so complex that it is neither fair nor feasible to make
individuals responsible for solving them.
Encourage the process of self-direction and control instead of imposed control.
Favour participation in the establishment, measurement and evaluation of standards of
performance, prompt information feedback to those whose performance is off the
mark and the need for positive and reformative measures instead of punitive
measures.
Model suggests that different people react differently to the same situation or react the
same way to different situations.
MASLOWS HIERARCHY THEORY

Maslow has suggested that the underlying needs for all human motivation
can be organized in a hierarchical manner on five general levels. They are:
1. Physiological needs
2. Safety needs
3. Social needs
4. Esteem needs and
5. Self-actualization.

Physiological needs: At the lowest order level are physiological needs

which include the need for food, water, sex, clothing and shelter. For a
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human being who lacks everything the major motivation would be such
physiological needs.
Safety needs: When the physiological needs are satisfied, the safety
needs become the most important in the hierarchy. These are the needs
for protection against danger or loss of existing physiological needs.
Social needs: The third level in the hierarchy comprises the social needs,
that is the giving and receiving of love, friendship, affection,
belongingness, association and acceptance. If the first two levels are
fairly well satisfied, then a person becomes keenly aware of the absence
of friends or of a sweetheart, and will be motivated toward affectionate
relations with people in general.
Esteem needs: At the fourth level in the hierarchy are the esteem needs,
which are generally classified on to two subsets. The first subset includes
the needs for achievement, strength and freedom. In essence this is the
need for independence. The second sub set includes the needs for status,
recognition, and prestige. In essence this is the need for self- esteem of
self-worth.
Self actualization: The fifth and highest level in hierarchy is the self-
actualization need. This is the need to realize ones potentialities for
continued self-development and the desire to become more and more of
what one is.
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Herzbergs Two-Factor Theory

According to Herzberg, the absences of certain job factors tend to make workers
dissatisfied. However, the presence of these same factors in them does not
produce high levels of motivation. They merely help avoid dissatisfaction and
the problems it creates, such as absenteeism, turnover and grievances. Herzberg
called these factors maintenance or hygiene factors since they are necessary to
maintain a reasonable level of satisfaction. Ten maintenance factors, namely:
Fair company policies and administration.
A supervisor who knows the work.
A good relationship with ones supervisor.
A good relationship with ones peers.
A good relationship with ones subordinates.
A fair salary.
Job security
Personal life
Good working conditions
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Status
To build high levels of motivation, a different set of factors is necessary.
However, if these factors are not present, they do not in themselves lead to
strong dissatisfaction. Herzberg called these the motivators or satisfiers. These
are six in number:
Opportunity to accomplish something significant
Recognition for significant accomplishments.
Chance for advancement.
Opportunity to grow and develop on the job.
Chance for increased responsibility.
The job itself.
In the absence of maintenance factors, workers may feel dissatisfied. There may
be more absences, more quits and more grievances in union organizations. But
the presence of these factors does not motivate them. Similarly, in the presence
of motivators, workers may feel motivated but their absence does not make
them dissatisfied.
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THEORY X AND THEORY Y

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two

aspects of human behaviour at work, or in other words, two different views of
individuals (employees): one of which is negative, called as Theory X and the
other is positive, so called as Theory Y. According to McGregor, the perception
of managers on the nature of individuals is based on various assumptions.

Assumptions of Theory X

An average employee intrinsically does not like work and tries to escape
it whenever possible.
Since the employee does not want to work, he must be persuaded,
compelled, or warned with punishment so as to achieve organizational
goals. A close supervision is required on part of managers. The managers
adopt a more dictatorial style.
Many employees rank job security on top, and they have little or no
aspiration/ ambition.
Employees generally dislike responsibilities.
Employees resist change.
An average employee needs formal direction.

Assumptions of Theory Y

Employees can perceive their job as relaxing and normal. They exercise
their physical and mental efforts in an inherent manner in their jobs.
Employees may not require only threat, external control and coercion to
work, but they can use self-direction and self-control if they are dedicated
and sincere to achieve the organizational objectives.
If the job is rewarding and satisfying, then it will result in employees
loyalty and commitment to organization.
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An average employee can learn to admit and recognize the responsibility.

In fact, he can even learn to obtain responsibility.
The employees have skills and capabilities. Their logical capabilities
should be fully utilized. In other words, the creativity, resourcefulness
and innovative potentiality of the employees can be utilized to solve
organizational problems.

MODERN APPROACHES
Quantitative Approach This approach is also called the management science
approach. People made use of this technique in solving problems of industry also. A
mixed team of specialists from relevant disciplines is called in to analyze the problem and
to propose a course of action to the management. The team constructs a mathematical
model to simulate the problem. The model shows, in symbolic terms, all the relevant
factors that bear on the problem and how they are interrelated. By changing the values of
the variables in the model, and analyzing the different equations of the model generally
with a computer, the team can determine what the effect of each change would be.
Eventually the OR team presents the management with a rational base for making a
decision.
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Systems Approach A system is an interrelated set of elements functioning as a whole. By

viewing an organization as a system, we can identify four basic elements: inputs,
transformation processes, outputs and feedback.

Inputs from the Transformation Outputs into the

environment: process: environment:
material inputs, technology, products/ services,
Human inputs, operating systems, profits/losses,
Financial inputs, administrative employee
and Information systems and behaviors and
inputs control systems information
outputs.

Feedback

Following are the key concepts of this approach:

A system is a set of interdependent parts which together form a unitary whole
that performs some function.
Central to the systems approach is the concept of holism which means that no
part of the system can be accurately analyzed and understood apart from the whole
system. Conversely, the whole system cannot be accurately perceived without
understanding all its parts.
A system can be either open or closed- An open system is one which interacts with
its environment. A closed system is one which is independent of the environment.
Every system has a boundary Boundaries can be more clearly observed and
therefore more precisely defined in the case of physical and biological systems than in
the case of social systems.
Contingency Approach According to this approach, management principles and
concepts of various schools have no general and universal applicability under all
conditions. In other words, there is no one best way of doing things under all
conditions. Methods and techniques which are highly effective in one situation may
not work in other situations. Results differ because situations differ. Accordingly, the
contingency approach suggests that the task of managers is to try to identify which
technique will, in a particular situation best contribute to the attainment of
management goals.