-By Prabhjot Kaur

EGYPTIAN PYRAMIDS:

 The Construction of a single Pyramid occupied more than

1,00,000 workers for 20 years.

 “The Great Pyramid of Cheops” covers thirteen acres and

contains 23,00,000 stone blocks.

 One block weigh about 2.5 tons and were cut to size many
miles away. Then the stones were transported and set in
place by slave labours.

 No Bulldozers, Cranes were used in building of Pyramids.

 The Great wall of china:

 The whole construction was completed in 956 years.

 The total length of the wall is 6,000 km.

 The Base of the wall is 20 feet wide and the top of the wall
is 11 feet wide.

 The height of the wall is 7 feet to 37 feet. And the whole of

the wall was made by hand
1. Who told each worker what to do?

2. Who ensured that there would be enough stones at the

site to keep workers busy?

3. Who ensured that enough no. of workers are busy in

construction at all the time?

4. Who looked after the finance arrangements, payment to

workers and suppliers?

5. Who ensured that the project will complete on time?

 The answer to each question is:

“THE MANAGER”

And the Process through which he completed his work is

known as:

“MANAGEMENT”
 Since Management is an Interdisciplinary process
it has drawn its characteristics and principles from a
number of disciplines such as Economics, Sociology,
Psychology, Statistics etc.
 The term Management is used in three alternative
ways.

 Management as a discipline.

 Management as a group of people.

 Management as a process.
 A simple possible definition of Management is:

“Management is What Managers do”

The Drawbacks of this definition are:

 It is difficult to identify the people in the organization
who can be called as managers because there is no
uniformity in the titles given to people.

 It is difficult to identify Managerial activities as managers

may perform different kind of activities
 To overcome this problem , the activities of the
organization can be divided into two groups:
Operational, and Managerial.

 Operational Activities: The activities which are of

operative nature and through which actual work is
accomplished such as handling of machines by workers.

 Managerial Activities: The activities done to get things

done like a supervisor instructing its workers, marketing
manager instructing its salesman to contact customers to
sell the product etc.
 Thus, we can define management as:

“A Process of getting things done by others”

 Production-Oriented

 Decision-Oriented

 People-Oriented

 Function-Oriented
According to FW Taylor:

“Management is the art of knowing what you

want to do and then seeing that, it is done in the
best and cheapest way”
According to Stanley Vance:

“Management is simply the process of

decision making and control over the action of
human beings for the expressed purpose of
attaining pre-determined goals”
According to Harold Koontz:

“Management is the art of getting things done

through and with people in formally organized
groups”
According to Henry Fayol:

“To Manage is to forecast and to plan, to organize,

to coordinate and to control”

Thus, on Function orientation basis we can define

management as:

“a process involving planning, organizing,

staffing, directing, and controlling human efforts
to achieve stated objectives in an Organization”
 Multidisciplinary.

 Dynamic nature of Principles.

 Relative, not Absolute principles.

 Management: Science as well as art.

 Management as a profession.

 Universality of Management.
 What is an Art?

 Art is related with the bringing of a desired result

through the application of skills.

 Art is thus concerned with the understanding of how

particular work can be accomplished. Thus, Art has to
do with applying of knowledge or expertise or science
in performance of duties.
Thus the main Elements of Art are:

1) Personal Skills;

2) Practical Know How;

3) Result Oriented;

4) Creativity; and

5) Constant Practice aimed at Perfection.

Management is an ART because:

1) Like other artists, a manager also applies his knowledge

and skills to coordinate the efforts of his people.
2) A Manager seeks to achieve concrete practical results e.g.
Profit, Growth, social service etc in a given situation.
3) Like artist, manager is also creative. A Manager has to use
his creativity to convert resources into output in different
new situations.
4) Management is a personalized process and each manager
adopts his own approach towards problems depending
upon his perception and the environment condition; and
5) Mastery in Management is gained after a sufficiently long
period of experience in managing.
 Essential Elements of Science are:

1. Science is a systematized body of knowledge to a

particular field of enquiry. It is systematized in the sense
that it establishes cause and effect relationship into
different variables.

2. It contains underlying principles and theories developed

through continuous observation, experimentation and
research.

3. The Principles have universal applicability and they can

be applied under different situation barring few
exceptions. The principles are verifiable and lead to
predictable results.

4. This can be taught and learnt in the classroom and

outside. E.g. Physics, Chemistry, Mathematics and
Economics.
Management is a Science, Because:

1. Management is now a systematized body of

knowledge. Principles and theories are now available
in every area of management.

2. These principles and theories has been developed

through continuous observations, experimentations
and research.

3. Managerial principles has a wide and repetitive range

of application.

4. These theories and principles can be taught in the

classroom and industry.
 Maximum utilization of resources.

 Fulfillment of social obligations.

 Stability.

 Human Development.

 Achievement of group goals.

 PROCESS OF
MANAGEMENT
Process means a series of
operations or actions necessary
to achieve certain results
 The Elements of the management process are known
as functions of management.

 Function is a group of similar activities. However,

what functions are undertaken by managers in
organizations, there is divergence of views.

 The list of management functions varies from author

to author with the number of functions varying from
three to eight.
Writers Management Functions

Henry Fayol Planning, Organizing, Commanding, Coordinating, Controlling

Luther Gulick POSDCORB- planning, organising, staffing, directing, coordinating,

reporting, budgeting

Lyndall Urwick Planning, Organizing, Commanding, Coordinating, Communicating,

Forecasting and Investigating

Ralph Davis Planning, Organizing, Controlling

E.F.L.Brech Planning, Organizing, Motivating, Coordinating, Controlling

Koontz and Planning, Organizing, Staffing, Leading (directing), Controlling

O’Donnell
Few of the activities of management can be combined
into one and thus the main activities of management
are:

 Planning;
 Organizing;
 Staffing;
 Directing; and
 Controlling.
 The most basic and primary function of management.

 It precedes other functions because a manager plans

before he acts.

 It involves determining the objectives and selecting a

course of action to achieve them.

 It implies looking ahead and deciding in advance what

is to be done, when and where is to be done, how and
by whom it is to be done
 Organizing is the process of dividing work into
convenient tasks or duties, grouping of such duties in
the form of positions, grouping of various positions
into departments and sections, assigning duties to
individual positions, and delegating authority to each
position so that the work is carried out as planned.

 Organizing function contributes to the efficiency of

the organization by ensuring that all necessary
activities will be performed and objectives will be
achieved.
Process of organizing consists of the following steps:
1. Determining and defining the activities required for the
achievement of planned goals;
2. Grouping the activities into logical and convenient
units;
3. Assigning the duties and activities to specific positions
and people;
4. Delegating authorities to these positions and people;
5. Defining and fixing responsibility for performance; and
6. Establishing horizontal and vertical authority-
responsibility relationship throughout the organization.
 Staffing is the process of filling all positions in the
organization with adequate and qualified personnel.

 Staffing consists of manpower planning, recruitment,

selection, training, compensation, integration and
maintenance of employees.
 Directing is the managerial function of guiding,
supervising, motivating and leading people towards
attainment of planned targets of performance.

 It includes following activities:

1. Issuing orders and instructions
2. Supervising people at work
3. Motivating, i.e. creating the willingness to work for
certain objectives
4. Communicating
5. Leadership or influencing the behaviour of
employees
 Controlling is the process of ensuring that the
organization is moving in the desired direction and
that the progress being made towards the achievement
of goals.
 The process of controlling includes:
1. Establishing standards for measuring work
performance.
2. Measurement of actual performance and comparing
it with the standards.
3. Finding variances between the two and the reasons
therefore, and
4. Taking corrective action for correcting deviations so
as to ensure attainment of objectives
Functions Sub-Functions

Planning Forecasting, Decision-Making, Strategy Formulation, Policy-

Making, Programming, Scheduling, Budgeting, Problem-
Solving, Innovation, Investigation and Research

Organizing Functionalization, Divisionalisation, Departmentalization,

Delegation, Decentralization, Activity Analysis, and Task
Allocation

Staffing Manpower planning, recruitment, selection, training,

placement, compensation, promotion, appraisal etc.

Directing Supervision, motivation, communication, leadership,

activating etc

Controlling Fixation of standards, recording, measurement, reporting,

corrective action.
 LEvels OF
MANAGEMENT
 The term ‘Level of Management’ refers to a line of
demarcation between various managerial positions in
an organization.

 The number of levels in management increases when

the size of the business and work force increases and
vice versa.

 The level of management determines a chain of

command, the amount of authority and status enjoyed
by any managerial position.
 Top Level Management

Board of Directors Chairman, CEO

Middle Level Management

Divisional Heads, Sectional
Departmental Heads
Heads

Lower Level management

Supervisory management, Intermediate Supervisors,
Senior Supervisors Front-Line Supervisors
 TOP LEVEL MANAGEMENT

 It consists of Board of Directors, Chief executive or

managing director. The top management is the
ultimate source of authority and it manages goals and
policy for an enterprise.

 It devotes more time on planning and coordinating

functions.
Role of top management in an organization:

 Top management lays down the objectives and broad

policies of the enterprise.
 It issues necessary instructions for preparation of
department budgets, procedures, schedules etc.
 It prepares strategic plans and policies for the enterprise.
 It appoints executive for middle level, i.e. departmental
managers.
 It controls and coordinates the activities of all the
departments.
 It is also responsible for maintaining a contact with the
outside world.
 Middle Level Management
 The branch managers and departmental managers
constitute middle level.

 They are responsible to the top management for the

functioning of their departments.

 They devote more time to organizational and directional

functions.

 In small organization, there is only one layer of middle

level of management but in big enterprises, there may be
senior and middle level management.
 Role of Middle Level Management
 They execute the plans of the organization in accordance
with the policies and directives of the top management.
 They make plans for the sub-units of the organization.
 They participate in employment and training of lower level
management.
 They interpret and explain policies from top level
management to lower level.
 They are responsible for coordinating the activities within
the division or department.
 It also sends important reports and other important data to
top level management.
 They evaluate performance of junior managers.
 Lower level management

 Lower level is also known as supervisory/operative

level of management. It consists of supervisors,
foreman, section officers, superintendent etc.

 They are concerned with direction and controlling

function of management.
 Role of Lower Level Management
 Assigning of jobs and tasks to various workers.

 They guide and instruct workers for day to day activities.

 They are responsible for the quality as well as quantity of

production.

 They are also entrusted with the responsibility of maintaining

good relation in the organization.

 They communicate workers problems, suggestions and

recommendatory appeals etc to the higher level.

 They supervise and guide the sub-ordinates.

 They are responsible for providing training to the workers.

 A Manager’s job is varied and complex. Managers need
certain skills to perform the duties and activities associated
with being a manager.

 Research by Robert L. Katz found that managers needed

three essential skills:
1) Technical Skills
2) Human Skills
3) Conceptual Skills
 Technical skills include knowledge of and proficiency in a
certain specialized field, such as engineering, computers,
financial and managerial accounting, or manufacturing.

 These skills are more important at lower levels of

management since these managers are dealing directly
with employees doing the organization’s work.

 The examples of technical skills are: To use excel and

know how to implement macros is an advanced technical
skill. To drive a 300 ton truck is also an advanced technical
skill.
 Human skills involve the ability to work well with other
people both individually and in a group. Because managers
deal directly with people, this skill is crucial.

 Human skills are equally important at all levels of

management.

 A human skill is one that enables you to develop the ability

to work with people.
 Conceptual skills are the skills managers must have to
think and conceptualize about abstract and complex
situations. Using these skills managers must be able to see
the organization as a whole, understand the relationship
among various subunits, and visualize how the
organization fits into its broader environment.

 These skills are most important at top level management.

Three Skill Approach, KATZ (1955) Technical Human Conceptual

Top Level Management Low High High

Middle Level Management Mid High Mid

Lower Level Management High High Low

 The concept of managerial role was first introduced into
the analysis of managerial work by Henry Mintzberg in
1973 based on an observational study of chief executives in
a variety of medium to large organizations.

 Mintzberg has identified ten roles of a manager which are

grouped into three categories. The roles are inseparable
and should, therefore, be viewed as an integrated whole.
The three interpersonal roles of figurehead, liaison, and
leader, are primarily concerned with interpersonal
relationship that ensure information is provided for
decision activities.

 Figurehead: Representing the organization in formal

matters, servicing as a symbol of the organization.

 Liaison: Interacting with peers and people outside the

organization; developing external links.

 Leader: Activities concerned with subordinates;

motivating, staffing, communicating and directing.
The manager must seek/receive information from many
sources to make decisions, and other people in the
organization depend on information received from or
transmitted through the manager. Thus, the three
informational roles are primarily concerned with building
and using an intelligence system.

 Monitor: Receiving and collecting information; utilizing

the channels through which information comes
 Disseminator: Transmitting information within the
organization
 Spokesman: Transmitting information to people outside
the organization.
The unique access to information places the manger at the
center of organizational decision making. There are four
decisional roles:

 Enterpreneur: Including change, initiating projects to the

organization.
 Disturbance Handler: Taking charge when the organization
is threatened.
 Resource Allocator: Deciding where the organization will
expend its efforts and what resources will be expanded.
 Negotiator: Involving the organization with other
organizations.
MANAGEMENT Vs.
Administration
 According to this viewpoint, administration is a top-level
function while management is a lower level function.

 Administration is a determinative (thinking) function

concerned with laying down basic objectives and broad
policies of an organization. On the other hand,
management is an executive (doing) function involving the
direction of human effort towards the realization of such
objectives.

 The main supporters of this view are: Oliver Sheldon,

Florence, Lansburg, Theo Haimann, G.E. Milward.
 European School of Thought holds that management is a
comprehensive term and administration is a part of it.

 According to E.F.L. Brech, “Management is the generic

term for the total process of executive control involving
responsibility for effective planning and guidance of the
operations of an enterprise. Administration is that part of
management which is concerned with the installation and
carrying out of the procedure by which the programme is
laid down and communicated and the progress of activities
is regulated and checked against plans.”
 Henry Fayol, William Newman, Chester Barnard, George
R. Terry, Louis A. Allen, Harnold Koontz, Cyril O’Donnell
and many other writers make no distinction between
administration and management.

 According to this group of people, the distinction between

administration and management is superfluous and
meaningless. In practice, the two terms are used
interchangeably because both involve the same principles
and functions.
 Points of Administration Management
Distinction
Nature It is a determinative or thinking It is an executive or doing function
function
Scope Concerned with determination of Concerned with the implementation of
major objectives and policies policies
Level It is mainly a top-level function It is largely a middle and lower level
function
Influence Administrative decisions are Managerial decisions are influenced
influenced mainly by public opinion mainly by objectives and policies of
and other forces the organization
Direction of Not directly concerned with direction Actively concerned with direction of
Human Efforts of human efforts human efforts in execution of plans

Main Functions Planning and Control are the main Directing and organizing are the main
function involved in it functions involved in it
Skills Required Conceptual and Human Skills Technical and Human Skills

Usage Largely used in government and Mainly used in business organization

public sector
Illustrations Minister, Commander, Commissioner, Managing Director, General Manager,
Registrar etc Sales Manager etc.
 Coordination is the
essence of management
 Co-ordination is the unification, integration,
synchronization of the efforts of group members so as to
provide unity of action in the pursuit of common goals.

 Coordination is the process, whereby an executive

develops an orderly pattern of group effort among his
subordinates and secure unity of action, in the pursuit of a
common purpose.

 Coordination is a continuous and dynamic process which

emphasises unity of efforts to achieve the desired results.
 According to Mooney and Reelay: “Co-ordination is
orderly arrangement of group efforts to provide unity of
action in pursuit of common goals.”

 According to Charles Worth, “Co-ordination is the

integration of several parts into an orderly whole to
achieve the purpose of understanding.”
 Heart of Management

 Deliberate action

 Group Effort

 Continuous Activity

 System Concept

 Part of all Management Functions

 Increase in size and complexity of Operations.

 Specialization

 Clash of Interests

 Difference in Attitude and Working Style

 Interdependence of Units

 Synergy Effect
 Principle of Direct Contact

 Early Stage
Follett’s Four Principles
 Reciprocal Relationship of Coordination

 Principle of Continuity

 Principle of Self-Coordination
1) On the basis of scope or coverage:
Internal and External Coordination

2) On the basis of flow:

Vertical and Horizontal Coordination

And Coordination may also be:

Procedural and Substantive Coordination
Cooperation:
Cooperation implies the willingness of people
to help each other.

Coordination:
Coordination is a more inclusive concept. It
requires more than willingness of the participants to help
each other.

Coordination is impossible without Cooperation.

Main points of difference between Coordination and
Cooperation are:
1. Coordination enjoy the status of essence of management
while Cooperation does not enjoy the status of essence of
management.
2. Coordination arise out of limitations in organizational
structure while Cooperation does not arise out of any
limitations of organizational structure.
3. Coordination requires deliberate and intentional efforts of
a manager while Cooperation is voluntary.
4. Coordination is broader in scope than Cooperation.
 Points of Coordination Cooperation
Distinction

Nature A deliberate effort by the Voluntary attitudes of members of an

management organization

Purpose To provide unity of action in the To support one another for achieving
pursuit of a common purpose the objectives

Necessity It is essential where a group of It is voluntary and arise out of the

people work together for a common desire of the people to work together
purpose

Inter- Coordination without cooperation is Cooperation without coordination is

Relationship impossible fruitless

Medium It is achieved through both formal It arises out of informal relations

and informal relations
Main constraints in effective Coordination are:
1. Uncertain future poses a serious challenge to effective
coordination.
2. Knowledge, experience, character and wisdom of
manager act as a constraint in effective coordination.
3. Lack of orderly method of developing and adopting new
ideas and programmes block effective coordination.
4. Unwillingness of people creates a threat for effective
coordination.
5. Personal differences, organizational barriers and
improper authority-responsibility relationship also poses
a serious challenge to effective coordination
System Approach to
coordination
Managers use a variety of techniques for achieving
coordination. The main ones include, the following:

 Sound Planning
 Simplified Organization
 Effective Communication
 Effective Leadership and Supervision
 Chain of Command
 Liaison Officers
 Self Coordination
 Evolution of
Management thoughts
 Management is in existence since the time of human
civilization.

 Thousands of years ago Kautilya offered sound principles

of state administration.

 More than 200 years ago Adam Smith described the

advantage of division of labor and specialization.

 The study of management as a science began recently,

especially after industrial revolution.
In order to facilitate easy understanding we can identify three
broad approaches namely:

 The Classical Theory

 The Neo-Classical Theory

 The Modern Theory

The term classical means traditionally accepted and long
established. The main features of classical approach are:

1. Carrot and Stick Policies

2. Efficiency Emphasis
3. Formal Organization Structure
4. Motivation through economic gains
5. Principles are developed on the basis of experience of
practicing managers
6. Functions, Principles and Skills of management are
considered universal.
Classical Approach was developed through 3 main streams:

1. Scientific Management;

2. Administrative Theory; and

3. Bureaucracy.
Scientific Management is:

“The systematic study of the relationships

between people and tasks for the
purpose of redesigning the work process
to increase efficiency.”
 Principles of Scientific Management:

1. Replacing Rule of Thumb with Science

2. Scientific Selection, Training and Development of

workers for each job.

3. Separate planning from doing

4. Cooperation between management and workers.

 Elements and Tools of Scientific Management:

1. Scientifically Task Planning

2. Time and Motion Study

3. Standardization

4. Differential Piece Rate System

5. Functional Foremanship

6. Scientific selection and Training of Workers

 Limitations of Scientific Management:
1. Objective of achieving Worker’s economic welfare not
realized.

2. Boredom and Monotony

3. Differential Piece rate system is a way to exploit workers

4. Financial and Physical needs are completely ignored.

5. Difficult for workers to understand the basis of wages

determination, efficiency measurement .

6. Ignore the human aspect of workplace.

 French Industrialist Henry Fayol is known as the father of
Administrative Management.

 Fayol look at the problems of managing an organization

from top management point of view.

 Fayol used the term Administration in place of

Management.
 Fayol classified the business operations into 6 activities:

1. Technical (Production);
2. Commercial (Buying and Selling);
3. Financial (Use of Capital);
4. Security (Protection of Property);
5. Accounting (Keeping Financial Records); and
6. Managerial.

Since the first five activities were commonly understood by

many practitioners at that time, Fayol devoted his
attention to last activity.
1. Division of Work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual to common interest
7. Remuneration of Personnel
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure
13. Initiative
14. Esprit de Corps (Union is Strength)
1. Lack of Empirical Evidences

2. Neglect of Human Factor

3. False Assumption

4. Pro-Management Bias

5. Historical Significance
1. Taylor’s main concern was tasks and workers whereas
Fayol’s main concern was administration.
2. Taylor emphasized standardization and simplification of
work whereas Fayol emphasized functions and principles
of management.
3. Taylor used the word ‘Scientific Management’ whereas
Fayol used the word ‘General Theory of Administration’.
4. Taylor focused on improving labor productivity and
eliminate all kinds of waste. Fayol, on the other hand,
focused on improving administrative efficiency.
5. Taylor began from the supervisory level whereas Fayol
began from the top level of management.
 Points of Taylor Fayol
Distinction

Perspective Operative and Shop Floor level Top Level Management

Focus Technical Side of Work Administrative Side of work

Attention Increasing productivity through work Improving overall administration by

simplification, time and motion observing certain principles
studies

Techniques Used Scientific measurement of work Personal experiences passed on in the

through experimentation and form of universal principles of
observation management

Personality Scientist Practitioner

Major- Provided a major basis for Produced a systematic theory of

Contribution accomplishments on the shop floor management which can be studied,
analyzed and applied.
1. Max Weber (1864-1920) introduced most of the concepts
of bureaucratic organizations. The word bureaucracy
implies an organization characterized by rules,
procedures, impersonal relations, and elaborate and fairly
large hierarchy of authority-responsibility relationships.

2. In simple terms, it implies this proposition: The

organization has a structure, people work within their
boundaries. The work is processed with the help of rules
and regulations.

3. People follow the rules while processing work. Persons

with proper qualifications are selected so that the work is
done efficiently.
1. Hierarchy

2. Division of work

3. Rules, Regulations and procedures

4. Records

5. Impersonal Relationships

6. Administrative Class
1. Specialization

2. Rationality

3. Predictability
1. Rigidity

2. Impersonality

3. Displacement of Objectives

4. Compartmentalization of Activities

5. Red Tape
Neo-Classical
Approach
 Neo-Classical or Human Behaviour Approach is the
outcome of the thoughts developed by behavioural
scientists who have looked at the organization as
collectivity of people for certain specified objectives

 Since management involves getting things done by

people, the study of management must revolve around
human behaviour

 This approach is goal and efficiency oriented and

considers the understanding of human behaviour to be
major mean to that end.

 This approach emphasises human resources as compared

to physical and financial resources.
 The study of this approach can be divided into two parts:

1. Interpersonal Behaviour Approach, viz., Maslow Need

Hierarchy, Hezberg theory, McGregor’s X and Y theory
etc.

2. Group Behaviour Approach, viz., Homans (Human

Groups), Bakke (Fusion Process), Lewin (Group
Dynamics), Katz and Kahn (Social Psychology of
organization) etc.
 The organization is general is a social system
 The social environments on the job affect people and are
also affected by them and not management alone.
 In formal organization, informal organization also exists
and it affects and is affected by formal organization.
 A conflict between organization and individual goals
always exists.
 Man is diversely motivated and wants to fulfill different
types of needs.
 Man’s approach is not alwayz rational. Often he behaves
irrationally in terms of rewards which he seeks from
work.
 Team-work is essential for co-operation.
 People do not dislike work
 Most people can exercise a great deal of self-direction,
self-control and creativity than are required in current job.
 The manager’s basic job is to use the untapped human
potential in service of organization.
 Manager should create healthy environment wherein all
subordinates can contribute to the best of their capacity.
 Manager should provide self-direction by subordinates and
they must encouraged to participate fully in all important
matters.
 Philosophy

 Scientific Validity

 Short-Sighted

 Over concern with hapiness

 Anti-individualist
 Basis Classical Theory Neo-Classical Theory

Structure Impersonal, Mechanical Organization is social system

Behaviour Organizational behaviour is a product Behaviour is a product of feeling,

of rules and regulations sentimental attitudes

Focus Primary focus is on work and Primary focus is on small groups, on

economic need of workers emotional and human qualities of
employees

Emphasis People try to maximize rewards. Emphasises personal, security and

Emphasis is on order and rationality social needs of workers while
achieving organizational goals

Practices Authoritarian practices, elaborate Democratic practices, participation of

rules and regulations employed to employees in decision making,
obtain results recognizes human dignity and values

Results Work alienation, dissatisfaction Happy employees trying to produce

more
Modern management thought refers to the application of a
systems approach and the contingency approach to
organization and management. It indicates a new stream
of management thought.

Under Modern Theory, Two approaches are included:

1. System Approach
2. Contingency or Situational Approach
System theory is the ‘big picture’ approach that overcomes
the common weakness of viewing things in too narrow
a perspective.
It attempts to view the organization as a single unified,
purposeful entity, composed of interrelated parts.
Rather than dealing separately with the various parts of
an organization, system theory gives managers a way of
looking at an organization as a whole and as a part of
the larger, external environment.
In doing so, system theory tells us that activity of an
organization affects the activity of every other part. The
job of a manager is to ensure that all parts of the
organization are coordinated internally so that the goals
can be achieved.
1. Combination of subsystems
2. Parts and sub-parts of a system are mutually related
to each other.
3. Arrangement of sub parts is more important
4. System can be identified because it has a boundary.
5. Boundary of a system classifies it into two parts:
Closed system and open system.
6. System transform inputs into outputs.
1. Close system does not have any interaction with
environment while open system interacts with it.
2. Closed systems are self-contained and self-
maintaining, on the other hand open system import
energy and export output.
3. Closed system are generally mechanical while open
systems are affected by environment factors and
adjust accordingly.
4. Close system are like close loop while open systems
are characterized by negative entropy.
1. Abstract Approach

2. Lack of Universality
 The basic idea of contingency approach is that there
can not be a particular management action which
will be suitable for all situations.

 Rather, an appropriate action is one which is

designed on the basis of external environment and
internal states and needs.

 Contingency approach tries to fill this gap by

suggesting what should be done in response to an
event in the environment.
1. Model of Human Being

2. Organizational Variables

3. Evolution
1. Management is entirely situational and there is
nothing like universal principles of management or
one best way of doing a particular thing.

2. The approach suggests suitable alternatives for

those managerial actions which are generally
contingent upon external and internal environment.

3. This approach suggests that since organization

interacts with its environment, neither the
organization nor any of its subsystems is free to
take absolute action.
1. Inadequate Literature

2. Complex

3. Difficult Empirical Testing

4. Reactive not Proactive