Items Description of Module

Subject Name Human Resource Management

Paper Name Development of Management Thoughts, Principles and Types

Module Title Approaches of Management

Module Id Module No. -4

Pre- Requisites Theories of Management

Objectives To understand the different schools of thoughts and approaches

Keywords Management, Mechanistic Approach, Humanistic Approach, Contingency

Approach
 QUADRANT-I

Module 4: Approaches of Management

4.1 Learning Objective
4.2 Introduction
4.3 Early Management Thoughts
4.4 Classical Approach
4.5 Modern Management Approach
4.6 Quantitative Approach
4.7 System Approach
4.8 Summary

4.1 Learning Objective

After completing this module, you will be able to:

Objective

1. To understand the concept of approaches of management

2. To know different management practices
3. To examine the effectiveness of the directorate approaches towards organizational
development

Introduction

Environmental change and uncertainty, work technology, and the size of a company are all
identified as environmental factors impacting the effectiveness of different organizational forms.
According to the contingency perspective, stable environments suggest mechanical structures
that emphasize centralization, formalization, standardization, and specialization to achieve
efficiency and consistency. Certainty and predictability permit the use of policies, rules, and
procedures to guide decision-making for routine tasks and problems. Unstable environments
suggest organic structures which emphasize decentralization to achieve flexibility and
adaptability. Uncertainty and unpredictability require general problem-solving methods for no
routine duties and challenges. Paul Lawrence and Jay Lorsch suggest that organizational units
operating in differing environments develop different internal unit characteristics and that the
greater the internal differences, the greater the need for coordination between units.

Joan Woodward found that financially successful manufacturing organizations with different
types of work technologies (such as unit or small batch; large-batch or mass-production; or
continuous-process) differed in the number of management levels, a span of management, and
the degree of worker specialization. She linked differences in the organization to firm
performance and suggested that certain organizational forms were appropriate for certain types
of work technologies.

The contingency approach (the situational approach): Managers, consultants, and researchers
tried to apply the concepts of the major schools to real-life situations, and the approach emerged.
The methods that were quite effective in one situation did not work in others. The explanations
were sought as to why an organizational development program works brilliantly in one situation
and fails miserably in another. Results differ because of a difference in cases is a logical answer
to such questions under this approach. Thus a technique that works in one case does not
necessarily work in others.

Accordingly, a manager has to identify the technique that will, in a particular situation, under
special circumstances, and at a given time works successfully and contributes to the achievement
of managerial goals.

If management desires to increase the productivity, a new work-simplification scheme may be

prescribed by a classical theorist, while a psychologically motivating climate and a technique of
job enrichment regarding both difference in scope and responsibility and greater autonomy to
make decisions may be prescribed by the behavioural scientist. However, the manager under the
contingency approach goes for the solution that suits the best in a given situation. Work
simplification is appropriate if the workers are unskilled and resources and training opportunities
are limited, and a job-enrichment program is more efficient for craftsmen motivated by pride in
their abilities.

The contingency approach worked as a milestone in the development of management thought as

it deals with each situation differently giving a unique solution specifically required for that set
of organizational relationships under the given circumstances.
Source: https://image.slidesharecdn.com/teorimanajemenmoderen-kelompok/modern-
management-theories

Features of Contingency Approach:

The main features of contingency approach are as follows –

The applications and its effects are contingent on the situation. As management is entirely
situational, the conditions and complexity of the situation determine which measure or technique
is applicable. Since management’s success depends on its ability to compete with the
environment, it should sharpen its skills to anticipate and comprehend with environmental
changes. It is the ‘If’ and ‘then’ approach to management. Management has to determine and
take action, e.g. if workers have strong physiological needs, then financial motivators should be
adopted. There is not an only single way to manage. They (managers) must not consider
management principles and techniques universal. Every situation is unique by itself and requires
a different perspective and different handling.

Practical Utility of Contingency Approach

The contingency approach has real usage in the management world. It is action-oriented in
nature. The main contributions of contingency approach are:

The reserve approach provides a clear picture of the realities of the managerial job. It is not
suggestive of pre-conceived principles. It is free from value judgments and exhorts managerial
choices to be made in the light of environmental factors.

The contingency approach does not suggest that findings of earlier approaches are useless. It
recognizes that managerial functions and principles are useful but should be used with discretion
and care to suit the specific situation. It is close to real world. It guides the managers that
effectiveness of any technique is contingent on the given situation. It realizes that significant
differences exist between each situation. Moreover, the best solution is the one that is responsive
to the peculiarities of the particular situation. Contingency theory is beneficial to organizations
because of the potential for learning from specific situations and using these lessons to influence
future management of the same or similar situations. The ability to adapt to external pressures
and changes is also an advantage. Contingency theory may also produce more well-rounded
leaders who can develop their skills in multiple areas.

Humanistic Approach

Humanistic management theories were developed in the 20th century in reaction to earlier
theories of scientific management that emphasized productivity and profit above all other
concerns. According to the Humanistic Management Center, an approach to management must
include three key dimensions to be considered humanistic. The first is respect for the basic
dignity and humanity of employees, customers and anyone else affected by the company's
actions. The second is that all business decisions must include thoughtful, ethical analysis. The
third is that business decisions should be made in dialogue with all those who will be affected by
them.

The Humanistic Management Center advocates a paradigm shift away from economistic views
on market activities towards a humanistic approach. To move from criticism of the status quo
towards a fruitful discourse on alternatives we have developed a three-stepped approach offering
guidance and an anchor for reflection on managerial decisions as well as decision-making
processes. We understand humanistic management by three interrelated dimensions. These are
firstly that we as humans deserve and rightfully expect our dignity to be respected under all
circumstance. Secondly, that ethical consideration must form part and parcel of business
decisions and thirdly that actively embracing corporate responsibilities is contingent upon
initiating and maintaining an ongoing dialogue with stakeholders.

Firstly, that genuine respect for the dignity of every person is the foundation for interpersonal
interaction, including any interactions taking place in business contexts. Part of what makes us
human is our shared vulnerability. Investigating humanistic management is therefore based on
the fundamental acceptance that the condition humane entails our common need for protection of
our human dignity. Respecting every person, in all its depth and complexity, as individually
unique and collectively worthy of complete freedom from exploitation is a shared endeavour of
societies and all their institutions. We must therefore never view people as mere means of
production within economic processes but embrace every person as ends in themselves.

Secondly, that ethical reflection must form an integrated part of business decisions. If one
follows through on certain respect for the dignity of all persons, one must accept that decisions
that impact others must be examined regarding their consequences for all those affected.
Humanistic management consequently criticizes one-dimensional managerial objectives such as
profit maximization. Economic rationality becomes incompatible with protecting human dignity
whenever it leaves no room for the balancing of interests of stakeholders based on the quality of
the arguments articulated. When factual power overrides argumentative power - as any paradigm
that proclaims the maximization of particular interests demands - those interests that cannot
enforce their consideration are excluded and suppressed. However, equally respecting all
stakeholders is a necessary precondition of the unconditional respect for the dignity of all
persons affected by a company's activities. In short, without the integration of ethical
considerations into managerial decision making, claims of assuming corporate responsibility are
little more but a hollow catch phrase.

Thirdly, that seeking normative legitimacy for corporate activities is crucial for assuming
corporate responsibilities. This third dimension, which is to be understood as the dialogical
extension of ethical reflection on corporate conduct, allows for the aligning of good intentions
with activities that have the potential to produce good outcomes. The integration of ethical
reflection into business decisions alone can be seen as a monological process in which the
decision-maker might, in all sincerity, fail to see the concerns of others, leading to what we may
call honest mistakes. Therefore, the third guiding principle - seeking normative legitimacy - is
necessary to ensure that the outcomes of (monological) ethical reflection are tested by entering
into a dialogue with those who may challenge any aspect of a business's conduct. The only
managerial decision about whether a certain action is ethically sound is thereby transferred to the
"moral site" of stakeholder dialogue, where the manager shares the responsibility with the
interested parties to embark on a course of action that is acceptable to all parties.
Source: http://upload.wikimedia.org/wikipedia/en/e/ee/Phenomenal_field.jpg
Consequences of Humanistic Approach

Humanistic Management Network advocates a paradigm shift away from economistic views on
market activities towards a humanistic approach. To move from criticism of the status quo
towards a fruitful discourse on alternatives we have developed a three-stepped approach offering
guidance and an anchor for reflection on managerial decisions as well as decision-making
processes. We understand humanistic management by three interrelated dimensions.

These are:

 Firstly, that we as humans deserve and rightfully expect our dignity to be respected under
all circumstances.
 Secondly, that ethical consideration must form part and parcel of business decisions, and
 Thirdly, that actively embracing corporate responsibility is contingent upon initiating and
maintaining an ongoing dialogue with all stakeholders.

The Humanistic Management Network defends human dignity in the face of its vulnerability.
The dignity of the person lies in her or his capacity to define, autonomously, the purpose of her
or his existence. Since human autonomy realizes itself through social cooperation, economic
relations and business activities can either foster or obstruct human life and well-being. Against
the widespread objectification of human subjects into human resources, against the common
instrumentalization of people into human capital and a mere means for profit, we uphold
humanity as the ultimate end and fundamental principle of all economic activity.
Mechanistic approaches

DEFINITION: According to Black’s Law Dictionary mechanistic organization is “the

organization is hierarchical and bureaucratic. It is characterized by its (1) highly centralized
authority, (2) formalized procedures and practices, and (3) specialized functions. The
mechanistic organization is relatively easier and simpler to organize, but rapid change is very
challenging. Contrast to the organic organization.”

Although a new company’s small size may not require a strict organization of work and workers,
growth demands order. Organizing tasks and employees produces a business structure.
“Mechanistic” describes the strictest and most formal of these structures. Mechanistic companies
have fine divisions of labour, resulting in highly specialized jobs; they rely on management for
control, creating a bureaucracy; and they have many rules and a strict chain of command. The
company can be likened to a machine, its many parts synchronized to produce a standard,
predictable output. In the early twentieth century, the Industrial Age was well under way, and
mass production had taken hold. Business thinkers were studying work and workplaces, coming
up with ideas on how to best promote the highest possible efficiency and productivity. They
viewed workplaces like machines. The mechanistic organization evolved from this, featuring job
specialization, a bureaucratic management hierarchy, centralized power resting at the top of the
organization and many rules. These characteristics do indeed produce efficiency and
productivity. The mechanical organizational structure also lets a company benefit through
economies of scale, especially as applied to mass production.

Description
Because of their hierarchy, mechanical structures are vertically oriented. The most mechanistic
are the functional organizational structure, with its tall, triangular shape. Many workers from the
structure’s foundation, grouped into departments by similar activities such as production. Above
them sits their managers. When each employee narrowly specializes in some limited part of a
larger whole, one manager can easily supervise many employees and has a wide “span of
control.” The span of control gets smaller moving up the organization, where managers manage
other managers. The central power of the company crowns it all.

Advantage
In a mechanistic organization, activities are divided into different groups by common nature.
Works are distributed among the subordinates by their skills and efficiency.

Proper discipline
In this organization structure, top level management has centralized power. There is a system of
chain of command from the top level to secondary levels. Subordinates are responsible for their
immediate superiors. Therefore, all the subordinates perform activities according to best of their
ability.
Minimize supervision cost
In a mechanistic organization, works are divided among the employees by their specialization. It
means the right job is assigned to the right person. It helps to minimize supervision cost as all the
subordinates perform activities according to best their capabilities.

Quick decision and implementation

In this organization, only top level management involves in the decision-making process. It does
not consult with subordinates in decision-making process. Therefore, quick decision and its
implementation become possible. Moreover, in this competitive market environment, quick
decision and its implementation are essential for business success.

Network position
There is the provision of a network of position in the management hierarchy. Top level
management provides instruction and guidance to middle-level managers, middle-level managers
to lower level managers and again lower level managers to operating level employees. This
network is taken into consideration while communicating information. It helps for the timely
flow of information.

Fixation of responsibility
In this organizational structure, each has given specific responsibility by ability. He can neither
transfer job to others nor avoid it. Thus, the concerned employee needs to accomplish given job
himself. It develops the feeling of self-responsibility among the employees.

Effective management
It is a bureaucratic form of organization structure. In this organization, there are specific rules,
regulations, policies and working system. The top-level management has sole authority in
decision-making process. There is a system of chain of command from the top level to secondary
levels. Therefore, the manager can effectively manage the organization.

Disadvantages
As the mechanical structure gained widespread and prolonged use, researchers and
organizational designers found that the very mechanization that allows for productivity, economy
and efficiency also causes problems. The structure’s inherent bureaucracy hampers efforts to
respond to outside market forces quickly. Innovation has to wait on red tape. Rigid control and
job specialization mean employees are not free to be creative problem-solvers. As mere cogs,
staff morale may be low. Finally, grouping employees by function contribute to departmental
isolation. Interdepartmental cooperation and communication suffer in mechanical structures.

Work overload on manager

In a mechanistic organization, there is the provision of centralized authority and decision-making
authority is vested in the top level manager. Besides, the manager needs to involve in day to day
supervision and guidance. Hence it maximizes work overload on manager due to which he can
not involve in creative and innovative works.

Autocratic leadership
The mechanistic organization emphasizes to autocratic leadership. The system of delegation of
authority to subordinates by given responsibility does not prevail. Subordinates need to
accomplish given job. They have no right to provide suggestions and information to the manager.
It does not support for expansion and diversification of business.

Static and rigid

It is a static, rigid and tightly controlled structure. It emphasizes on standardized activities. There
is no provision of change in the working system and procedures by changing the environment of
the society. In such cases, it is harder to adapt the organizational activities in the dynamic
environment.

More formalization
There is the provision of rules, regulations and policies for official activities. All subordinates
need to work in accordance with specified rules and policies of the organization. They cannot use
their skill and efficiency while doing work. The fulfilment of more formalization makes
difficulty for a quick decision and smooth functioning of the organization.

Impractical decision
There is no provision of participation of subordinates in decision-making process. They have no
right to provide suggestions and information to managers at the time of taking a decision. Only
top-level manager is involved in decision-making process. Since limited persons are involved in
decision-making, there is the possibility of the impractical decision.

One way communication

It emphasizes in autocratic leadership. The information is communicated vertically only from the
top level to secondary levels. Here only the manager provides information of instruction and
guidance to subordinates. Such one-way system of communication does not support for the
smooth functioning of the organization.

Hard for coordination

In this structure, specific work is assigned to individuals by their skills. They perform the given
task properly. However, there is no mechanism for maintaining coordination over their
performance. Hence top level management needs to spend more time.

CHARACTERISTICS: Employees are often found working in groups and share input on tasks.
There are usually teams that handle one task. Communication is open between employees,
managers and executives though they are typically just known as ‘the owner’. There is a greater
scale of verbal communication between parties. There is also more face-to-face time within the
hierarchy of power.

STRUCTURE: Companies in an organic organization structure typically have a more open

communication and contribution to tasks at hand. The structure of the business is more adaptable
and flexible to changes. The environment is unpredictable, but because of the freedom afforded
the employees and management, it is better maintained. Good examples of this type of structure
would be Google and the coveted positions that lie within the Facebook Corporation. Organic
organizations have quickly realized that a happy workplace makes for a happy employee.

Mechanistic Structures Include:

 Belief upper management is better capable of making decisions

 Management instructions must be followed
 Communication and control must proceed through hierarchical routes
 More emphasis toward completing a task opposed to achieving company goals
 Employees are more jobs specialized and placed into certain departments
 Low differentiation of tasks

Summary

The Environmental factors of an organization like uncertainty, technology, work technology, and the
size of a company impact the effectiveness of different organizational forms. Different
approaches advocate different views. In contingency approach stable environments suggest
mechanistic structures that emphasize centralization, formalization, standardization, and
specialization to achieve efficiency and consistency. The Humanistic Management Center
advocates a paradigm shift away from economistic views on market activities towards a
humanistic approach. In mechanistic organization, activities are divided into different groups on
the basis of common nature. Works are divided among the subordinates on the basis of their
skills and efficiency.