PACE ACADEMY

G11 ABM – Organization and Management

Handouts 1.1 (Part 2)
Lesson 1: Theories and Conceptual Framework of Management

OBJECTIVES:
a. Explore different approaches to management
b. Differentiate between administration and management
c. Understand the roles of a manager

DIFFERENT APPROACHES TO MANAGEMENT

There are many approaches in management thought where each approach tries to explain the nature
and content of management separately with different beliefs and views.

A. Systems Approach

Systems approach was developed sometime after 1950’s and initially developed by Weiner and later other
people made many significant contributions as well. System “is a set of inter-connected and inter-related
elements which are arranged in order and operate together to achieve certain goals.”

The parts of a system are:

Input Process Output

Types of Systems: There are four types of systems.

Closed System
This system works without any external requirement and
interference and works on the principles of unity of
command span of control and equal authority and
responsibility

Open System
This system is dependent upon the outside environment for
feedback and resources and for the disposal of finished
products

General System
This approach to management has a relation with formal
organization

Specialized System
This system includes the areas of organization structure, job
design and computerized information

1
 Advantages of Systems Approach
It helps in studying the functions of complex
organizations.
It highlights interdependence between
various elements in an organization.
It provides clue to the complex behavior of
the people.
It analyses problems in relation to other
problems.
Disadvantages of Systems Approach
It cannot be easily applied to large and
complex organization.
It is not suitable for smaller organization.
No tools and techniques are provided to
the managers to implement it.

B. Contingency or Situational Approach

This approach was developed on the basic theme that there is no single best solution to the
problems arisen in all situations. It was developed by J.W.Lorsch and P.R.Lawrence in the 1970’s
which states that “behavior of one sub-unit is dependent on its environment and relationship to
other units or sub-units that have some control over the sequences desired by the sub-unit”.

• There is no best way of doing things

• Management action is situational and is susceptible to
outside the system or sub-system
Features of • Management policies and practices are subject to
Contingency Approach changes as per the changes in the outside world
• No action is universal that varies with situation
• Human relations skill is necessary for managers to
accommodate and stabilize change

• It improves the diagnostic skills

• It discloses the role and the performance of managers in
an organization
Advantages of • A manager is expected to know all the alternative
Contingency Approach course of action before taking any action
• The managerial principles and functions to be followed
as per the discretion of the situation

2
 Differences Between System Approach and Contingency Approach

Systems Approach Contingency Approach

• It treats all organizations as same and has no
unique nature
• The contributors of systems approach are
social psychologists
• Systems approach is the pioneer to the
contingency approach
• Systems approach may specify situations
under which a particular type of organization
can function well
• It provides a global theoretical model for
understanding organizations
• Systems approach is vague and unspecific
• The main concepts are input, output process,
open system, system boundary, synergy,
dynamic equilibrium, entropy and equifinality
• Systems approach emphasizes interactions
and inter relationships among systems and
subsystems
• It appears to be neutral and non-committal
on the universality of classical principles
• Systems approach suggests definite solutions
of problems to a specified organization
• It focuses the internal environment of an
organization
• It treats each organization as unique
• The contributors of contingency approach
are sociologists
• Contingency system has been built over
systems approach
• Management action is situational and no
situation is predicted accurately
• It provides operational tools and techniques
for analyzing and solving problems
• Contingency approach is pragmatic,
specific, and action oriented
• There are no specific concepts
• Contingency approach emphasizes
interrelationships and interdependencies
and their influence on organizational design
and managerial style
• It rejects the universality of principles; there is
no one best way of managing
• Contingency approach suggests probable
and flexible approach to problems
• It focuses the external environment of an
organization

References:
•Principles of Management by Verma, Takale
•Organization and Management by Edilynda Enriquez