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Open System and Contingency Management Theories, Discussion on Planning & Organizing
Chandrasen Kumar
M.Sc. (DU), MPA (LKYSPP, Singapore)
Todays overview
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This theory is different from the rest we have discussed earlier It says there is no one best way to run the organization or limited number of immutable principles uniformly applicable in all situations Emphasizes situational analysis:
Identification and Analysis of multiple variables affecting and determining organizational behaviour and effectiveness
A system is a set of interrelated units The whole is greater than the sum of all units example? Traditional theories viewed organizations as closed systems:
It regarded the enterprise as sufficiently independent to allow most of its problems to be analyzed with reference to its internal structure and without reference to its external environment
Entities existing in dynamic and interdependent relationship with environment receiving resources and transforming into outputs and transmitting them to environment, reactions are then fed-back to the system as input, and cycle is maintained
Organizations must acquire and develop Ve entropy because closed systems experience chaos, eg. Wearing out of parts, breakdown etc.
Open systems have differentiation and elaboration of roles through specialization and equifianlity Open systems amy achieve purposes/goals through diverse sets of inputs and different configuration of system componenets Environment emerges as crucial variable Managing requires constant monitoring of environment to overcome complacency and obsoletness
Thus OST:
Provides a framework analyzing and understanding an organization and required management system/practices Does not negate other theories we have studied Merely encourages to recognize all organizations are same but they are all different
Contingency Theory
This theory is also different from the rest we have discussed earlier and
Provides another framework analyzing and understanding an organization and required management system/practices Does not negate other theories we have studied Emphasizes the differences among organizations and seeks to identify variables contingencies affecting
Contingency Theory
Environment affects organizational behavior James Thomson identified stability and homogeneity are crucial contingencies for structure Organizations adapt to unstable heterogeneous environment through
Contingency Theory
Laurence and Lorsch Stability impacts differentiation, formalization and centralization Organizational technology Basic work flow, process and methods Fred Fiedler Leadership styles: Different situations with different leders would give different outputs
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Define your objectives. Determine where you stand vis--vis objectives. Develop premises regarding future conditions.
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vary in their capability to deal effectively with different time horizons. Higher management levels focus on longer time horizons.
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Production plans Financial plans Facilities plans Marketing plans Human resource plans
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Policy
Rules or procedures
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Budgets
Single-use plans that commit resources to activities, projects, or programs. Fixed, flexible, and zero-based budgets. One-time activities that have clear beginning and end points. Project management and project schedules.
Projects
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Making assumptions about what will happen in the future. Qualitative forecasting uses expert opinions. Quantitative forecasting uses mathematical and statistical analysis. All forecasts rely on human judgment. Planning involves deciding on how to deal with the implications of a forecast.
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Contingency
planning
Identifying alternative courses of action that can be implemented to meet the needs of changing circumstances. Contingency plans anticipate changing conditions. Contingency plans contain trigger points.
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Study Question 3: What are the useful planning tools and techniques?
Scenario planning
A long-term version of contingency planning. Identifying alternative future scenarios. Plans made for each future scenario.
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Use of external comparisons to better evaluate current performance and identify possible actions for the future.
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Participatory planning requires that the planning process include people who will be affected by the plans and/or will help implement them. Benefits of participation and involvement:
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