Modern Approach of Management

1.SYSTEM APPROACH 2.CONTINGENCY APPROACH

1. System Approach
The system approach of management represents new thinking and the latest developments that occurred in the field of organizations and management. It was developed after 1950, placing emphasis on interdependence and inter-relationship which exists among various activities and components of organization. The term system may be defined as a set of interrelated and interacting components assembled in a particular sequence so as to produce some results. These components may also be viewed as sub-systems of a larger system.

System approach

The various sub-systems that are involved in the functioning of a larger one are closely related to each other and to a system as a whole. Similarly, these sub-systems interact with each other by getting influenced and influencing others. Every system has a sub-system and every sub-system may be considered as a system because it may have sub-systems. Thus, in a system, there is a wheel within a wheel making and contributing to a larger system. Beyond these set boundaries there exists an external environment which is outside the control of the system.

Types of systems

Systems may be broadly classified into four categories physical, mechanical, biological and social. Physical systems are a part and parcel of nature or the sub-system of it. These are totally governed and regulated by nature. e.g.. Solar system, seasons, rivers etc. Mechanical systems refer to those devices that are based on technology. These systems have been innovated by human beings for their betterment but are totally closed systems in nature.

A system may be either an open system or a closed system or a partially open and partially closed one. On the other hand, biological and social systems are relatively open systems. They interact with external environment on a regular basis and depend on it for the supply of necessary inputs. To study an organization as a system, various system approaches have been developed. Among these, the socio-technical theory of organizing the managing work is considered more relevant.

Socio-technical theory

These two should be considered as a supportive subsystem of the organization. This approach of designing work for employees in the organization is based on the following principles: 1. jobs and work groups in the organization should be created on the basis of task requirements. The tasks that are small components of the job may be highly related to each other. Such tasks should be put in one group and should be performed by employees working in related roles.

2. besides wages, safety and security demands, the job must also fulfill the psychological and social requirements of job holders. In order to make jobs more meaningful, the right to exercise control over it should be given to the job holders. The elements of mutual help, social support, decision making and planning should be introduced into the jobs and work groups. 3. the most important principle of the socio-technical theory is to consider the organization as an open adaptive system. According to this principle, the organization operates in an environment that has a direct impact on its functioning.

An organization is an open adaptive system and has the following features: 1. interaction 2. input-process-output model 3. integration of sub-systems 4.multiplicity of objectives 5. sub-systems.

1. interaction

An organization is an open system and interacts with its environment on a regular basis. Its functioning is greatly influenced by the changes taking place in the environment. To some extent, the organizations in a collective form and autonomous organizations having huge resources at their disposal may also have some impact on external environment.

2. Input-process-output model

The organization is considered as an impute-processoutput system. It procures resources from society, which are known as inputs and these are processed and converted into output. The output is in the form of goods and services that are given back to society.

3. Integration of sub-systems

The organization operates through many sub systems. These sub systems may be technical, social and power systems of production, distribution, finance, purchase, personnel etc. These sub systems are integrated and coordinated so as to facilitate the smooth function of the organization. It is done through the process of communication, balance and decisions.

4. Multiplicity of Objectives

The organization is a collective system. It involves the interest of many groups such as owners, customers, employers, financiers, government and society. To serve the interests of these groups, the organization is bound to pursue two or more objectives at a time. it ultimately leads to multiplicity of objectives.

5. Sub-systems
The organization is a sub-system of a larger system and has many sub-systems in it. The sub-systems of an organization are closely related with each other. They interact with each other and supplement the functioning of each other so as to contribute to the overall functioning of the organization. These sub-systems derive strength and power from the organization and in turn make a contribution to the organization.

Evaluation of System Approachmerits

The system approach encourages meaningful analysis of an organization and its various sub-systems or components and facilitates their management. It provides a sound basis for understanding organizations and their problems. System theorists strongly believe that the actions and decisions of managers influence and in turn are influenced by many organizational and environmental variables.

Evaluation of system approach merits

Managers must take into account interdependencies, interactions and interrelationships among the various components of the system at the time of taking decisions. They should also base decisions on the ground realities of both internal and external environment. Thus, the system approach facilitates the application of both the process of analysis and synthesis and differentiation and integration by relating the subsystems of an organization from the lowest to the highest level of the organization.

System approach merits.

Another positive aspect of the system approach is that it integrates various management approaches in a meaningful way. Although the classical and behavioral approaches place an emphasis on different aspects, these two are greatly influenced by the system approach.

Evaluation of system approach demerits

Some management scientists criticize the system approach as purely theoretical, conceptual, vague and abstract. They argue that it has only an intellectual appeal and cannot be applied to practical situations. In the context of management of a modern organization it is considered simply a way of thinking rather than one providing solutions to problems. The system approach neither offers any tool or technique for analysis and synthesis nor does it recognize the differences that exist between the various systems.

2. Contingency Approach

The contingency approach of management and organization based on an analysis of situational variables was first proposed by Fred E. Fiedler. The contingency approach is related to system approach, and represents a comparatively new line of thinking among management scientists. This approach basically discounts the concept of universal application of managerial principles and recommends that the application of these principles is subject to appropriateness of the situation.

Contingency approach

It is a systematic attempt to determine the package of management techniques, approaches and practices that are appropriate to a specific given situation. Thus, according to the advocates of this approach, managers, instead of applying the principles and practices of management in an uniform manner to every situation, should study, analyze and diagnose the situation, understand situational requirements and then prepare a package of management principles and techniques to deal with it effectively.

Nature of contingency approach

The contingency approach discounts the theme of universal application of management principles. It further upholds the relevance and utility of situations as well as external factors for developing a suitable action program. Outwardly, it appears that the contingency approach is merely based on common sense because it has an intuitive appeal that there cannot be a single best way of doing things in every situation.

It is merely a matter of common sense that one particular solution cannot be universally applicable to all situations regardless of their individual characteristic and features. Thus, managers should have flexibility and freedom to devise a suitable course of action for a given situation. It is because in real life the success of any management technique is largely conditioned by the situation.

Contingency approach - merits

This is a significant addition to the existing body of management knowledge because it places more emphasis on the appropriateness of management tools and techniques for a specific situation. It offers practical direction to the system approach to choose a suitable form of departmentalization for grouping activities, style of leadership and supervision, to determine the degree of centralization and decentralization and more appropriate motivational processes as per the demand of the situation.

Contingency approach -merits

Some management scientists believe that the contingency approach is a compromise between the system approach and a purely situational perspective. It is based on open system thinking, is pragmatic and encourages multivariable analysis. Contingency approach has wide-ranging applicability in organization and management. This is because every manager is preoccupied with the responsibility to develop an alternative course of action suitable for a specific situation.

Contingency approach - demerits

This approach is criticized by many management scientists on the ground that it is totally a practical approach without being supported by the required theoretical and conceptual framework. Managers experience difficulty in analyzing situations and discovering appropriate management techniques in the absence of necessary research devices and generalizations to understand the behavior of a situation. However the contingency approach may be regarded as a promising step towards the development of management theory and practice.