Modern Approaches

Introduction

• In the early 1920s, a shift away from classical

management theory took place as theorists began to
consider the human side of an organization and the social
needs of employees, called the Neoclassical Period.
• And now the Modern Period takes place from(1960 to
present). After, 1960 management thought has been
turning somewhat away from the extreme human
relations ideas particularly regarding the direct relation
between morale and productivity. Present management
thinking wishes equal emphasis on man and machine.
“System Approach”
is set of interrelated and inter dependent parts arranged in
a manner that produces a unified whole.

A system is a set of interrelated but separate parts working

towards a common purpose.
A system may be defined as a goal-oriented organism that
is composed of interrelated in such a way that the total
system is greater than the sum of its parts.
Key Concepts:
 Key Concepts:
Subsystem
-parts of system that depends on each other.
• Internal subsystem.
• External subsystem.
Open System
-open systems theory refers simply to the concept that organizations
are strongly influenced by their environment.
Closed System
-closed systems are not influenced by and not interact with their
environment.
 Key Concepts:
Synergy
-cooperation between subsystems.
System Flows
-this system defines different work flows for different process types or
tasks.
System Boundary
-separation between internal and external subsystems.
Feedback
-process in which the effect or output of an action is 'returned' (fed-
back) to modify the next action.
 Characteristics of System Approach:

Systems have structure, defined by parts and their composition;

Systems have behaviour, which involves inputs, processing and
outputs of material, energy or information;
Systems have interconnectivity : the various parts of a system
have functional as well as structural relationships between each
other.
System(s) have by itself function(s) or group of functions .
Model of System Approach to
Management
 Types of System Level for
Management:

(Decision Support
System) DSS
is a computer-based information
system that supports business
or organizational decision-
making activities.
(Management Information
System) MIS
provides information that
organizations require to manage
themselves efficiently and
effectively
DSS
(Transaction
Processing Style) TPS
Transaction processing is
MIS a style of computing that
divides work into
TPS individual, indivisible
operations, called
transactions
 Types of System Level for
Management:
(Transaction Processing Style) TPS
-Transaction processing is a style of computing that divides work into
individual, indivisible operations, called transactions. A transaction processing
system (TPS) or transaction server is a software system, or
software/hardware combination, that supports transaction processing.
(Management Information System) MIS
- provides information that organizations require to manage themselves
efficiently and effectively. Management information systems are typically
computer systems used for managing An organized approach to the study of
the information needs of an organization's management at every level in
making operational, tactical, and strategic decisions.
 Types of System Level for
Management:

(Decision Support System) DSS

-is a computer-based information system that supports business or
organizational decision-making activities. DSSs serve the management,
operations, and planning levels of an organization (usually mid higher
management) helps in making decision.
Advantages of System Approach:

Under system approach, manager have a good view of the

organization.
Closeness to reality
It gives importance to interdependent of the different
parts of an organization and its environment.
It forecast consequences and plans action.
Goal oriented.
Disadvantages of System Approach:

Does not offer specific tools and techniques for practicing

manager.
In smaller organization it is not relevant.
Activity of any part affect activity of other parts.
Unpractical: It cannot be easily and directly applied to
practical problem.
“Contingency Approach”

sometimes called as the situational approach.

wide range of external and internal factors to be
considered and the focus should be on the action that best
fits for the situation.
there is no one best way of organizing / leading and that an
organizational / leadership style that is effective in some
situations may not be successful in others.
(Fred Fiedler,1964)
Characteristics of Contingency Approach

1. Management is entirely situational. The application and effectiveness of

any technique is contingent on the situation.
2. Management should match its approach to the requirements of the
particular situation. To be effective, management policies and practices
must respond to environmental changes. The organisation structure, the
leadership style, the control system all should be designed to fit the
particular situation.
3. As management’s success depends on its ability to cope with its
environment, it should sharpen its diagnostic skills so as to anticipate and
comprehend environmental changes.
Characteristics of Contingency Approach

4. The managers should understand that there is no one best

way to manage.
5. Because of the specific organisation-environment
relationship, no action can be universal.
• It varies from situation to situation.
Internal Factors in Contingency
Approach:
Internal Factors:

• Technology
-can also be defined as the integrated planning, design, optimization,
operation and control of technological products, processes and
services, a better definition would be the management of the use
of technology for human advantage.
• Structure
-determines how the roles, power and responsibilities are assigned,
controlled, and coordinated, and how information flows between the
different levels of management.
Internal Factors:
• People
- is one of the resources to perform and support the result in the
success or failure of your business.
• Purpose
-a specific result that a person or system aims to achieve within a time
frame and with available resources.
• Size
-a determining factor of "process scope", most simply defined as the
degree and extent to which project management practices are formally
applied.
External Factors in Contingency
Approach:
 Application of Contingency
Approach:

• will enable the manager to examine the situation and to

determine the cause of decreased profits before a new
procedure or program is implemented.
• is designed to provide the manager with the capabilities to
examine numerous possible solutions to a problem
 Limitations of Contingency
Approach:

• Difficulty in determining all relevant contingency factors and

showing relationship between them may be complex.
• It is totally practical approach without support of theoretical
and conceptual frame work.
• Sometimes manager finds difficulties in analysing the
situation and discovering appropriate management
technique in absence of proper research and lack of proper
understanding of the situation.
 Advantages of Contingency
Approach:

• More complete information

• More alternatives are generated
• Acceptance of solutions are increased
• The legitimacy of the solution is increased.
 Disadvantages of Contingency
Approach:

• Minorities can dominate (more powerful)

• Pressures to conform are applied by more powerful
members
• Time consuming
• Responsibility for the solution is ambiguous.
 DIFFERENCE BETWEEN SYSTEM APPROACH
AND CONTINGENCY APPROACH

Systems Approach:
1. The emphasis is on interdependence and interaction among
sub-systems.
2. The focus is on the internal environment and sub-systems
of the organization.
3. It treats all organizations alike and the background of the
organization is not taken into account.
 DIFFERENCE BETWEEN SYSTEM
APPROACH AND CONTINGENCY
APPROACH

4. The organization interacts with the environment and adjusts

as per the changes.
5. It provides a theoretical model of understanding the
organization and its sub-systems.
6. It is silent on the validity of classical principles of
management
Contingency Approach:

1. It emphasizes the impact of environment on organizational

design and managerial style.
2. The focus is on external environment of the organization.
3. Each organization is taken as unique entity. Different
organizations have different nature and face different
situations.
Contingency Approach:

4. The impact of the environment on organization structure

and managerial style is the major concern of contingency
approach.
5. It suggests practical solutions to organizational problems.
6. It rejects the blind application of classical principles of
management.