CONTEMPORARY THEORIES IN MANAGEMENT

LUIS A. ABIODA, Ed.D.

Institute of Management West Visayas State University La Paz, Iloilo City

Contingency Theory

Basically, contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. Basically, its the approach that it depends. For example, the continuing effort to identify the best leadership or management style might now conclude that the best style depends on the situation.

Systems Theory

Systems theory has had a significant effect on management science and understanding organizations. First, lets look at what is a system? A system is a collection of part unified to accomplish an overall goal. If one part of the system is removed, the nature of the system is changed as well. A system can be looked at as having inputs, processes, outputs and outcomes. Systems share feedback among each of these four aspects of the systems.

Systems Theory (continued)

Lets look at an organization. Inputs would include resources such as raw materials, money, technologies and people. These inputs go through a process where theyre planned, organized, motivated and controlled, ultimately to meet the organizations goals. Outputs would be products or services to a market. Outcomes would be, e.g., enhanced quality of life or productivity for customers/clients, productivity.

Systems Theory (continued)

Feedback would be information from human resources carrying out the process, customers/clients using the products, etc. Feedback also comes from the larger environment of the organization, e.g., influences from government, society, economics, and technologies. This overall system framework applies to any system, including subsystems (departments, programs, etc.) in the overall organization.

Systems Theory (continued)

Systems theory may seem quite basic. Yet, decades of management training and practices in the workplace have not followed this theory. Only recently, with tremendous changes facing organizations and how they operate, have educators and managers come to face this new way of looking at things. This interpretation has brought about a significant change (or paradigm shift) in the way management studies and approaches organizations.

Systems Theory (continued)

The effect of systems theory in management is that writers, educators, consultants, etc. are helping managers to look at the organization from a broader perspective. Systems theory has brought a new perspective for managers to interpret patterns and events in the workplace. They recognize the various parts of the organization, and, in particular, the interrelations of the parts, e.g., the coordination of central administration with its programs, engineering with manufacturing, supervisors with workers, etc.

Systems Theory (continued)

This is a major development. In the past, managers typically took one part and focused on that. Then they moved all attention to another part. The problem was that an organization could, e.g., have a wonderful central administration and wonderful set of teachers, but the departments didnt synchronize at all.

Chaos Theory

As chaotic and random as world events seem today, they seem as chaotic in organizations, too. Yet for decades, managers have acted on the basis that organizational events can always be controlled. A new theory (or some say science), chaos theory, recognizes that events indeed are rarely controlled. Many chaos theorists (as do systems theorists) refer to biological systems when explaining their theory.

Chaos Theory (continued)

They suggest that systems naturally go to more complexity, and as they do so, these systems become more volatile (or susceptible to cataclysmic events) and must expend more energy to maintain that complexity. As they expend more energy, they seek more structure to maintain stability. This trend continues until the system splits, combines with another complex system or falls apart entirely. Sound familiar? This trend is what many see as the trend in life, in organizations and the world in general.

Human Relations Theory

Human Relations theory was created in the 1930s as a direct response to the Hawthorne Studies Human Relations theorists assumed that under the right conditions, work could be enjoyable. They argued that workers are motivated by needs other than money. There is ample evidence to support these notions, even today.

Human Relations Theory Criticisms of Human Relation Theory

There was too much emphasis on the employee. Managers misunderstood and misused the theory. They manipulated employees by offering bogus praise Misuses ultimately diluted the theorys impact by offering superficial praise, causing it to be counterproductive.

Human Resources Theory

Resulted from a critical assessment of human relations theory by Raymond Miles. Miles argued that although many people touted human relations approaches, they were rarely meaningfully implemented.

Human Resources Theory (continued)

Assumptions of Human Resources Theory Employees are as capable as management in making meaningful contributions at the workplace. Managers have the responsibility to cultivate a climate that will facilitate employee contributions instead of just acknowledging the contributions as a way to gain cooperation.

Theory X and Theory Y

Douglas McGregor assumed managers look at employees in one of two ways similar to the classical theory approach and the human relations/resource approaches of management. He labeled these perspectives Theory X and Theory Y.

Theory X Assumptions

People dislike work and will avoid it when possible. Workers are not ambitious and prefer direction. Workers do not seek responsibility and are not concerned with overall organizational needs. Workers must be directed and threatened with punishment to achieve organizational productivity.

Theory Y Assumptions

Under the right conditions, work can be as natural as play or rest. Workers are ambitious and prefer selfdirection. Workers seek responsibility and feel rewarded through their achievements. Workers are self-motivated and require little direct supervision. Workers are creative and capable of organizational creativity.

Problems with Theory Y

Assumes that all people are the same and would enjoy work under the right circumstances. There are some who would ultimately enjoy a life of leisure. Assumes that it is possible to always have workers working under the right conditions. Not all jobs can be made interesting to all people.

Cultural Theory

A perspective that assumes that organizations create their own identities which affect organizational life and success. Functionalists consider organizational culture to be a function of communication messages generated by management.

Cultural Theory (continued)

Interpretivists disagree, suggesting that organizational culture emerges from the communication activity of all organizational members. Deal and Kennedy 1982 book Corporate Culture: Rites and Rituals of Corporate Lifeargued that an organizational culture is a composite of its environment, espoused values, identified heroes, established rites and customary rituals.

Cultural Theory (continued)

Maintained that informal communication systems promote and maintain corporate values. Their work was important in that it helped identify and define organizational culture, explained elements of culture, and acknowledged the importance of communication as a factor that creates and maintains culture.

Cultural Theory (continued)

Peters and Waterman wrote a book called, In Search of Excellence: Lessons from Americas Best Run Companies. They identified cultural trademarks that are shared by successful companies. They argued that organizations would be wise to instill these trademarks to help ensure success.

Eight Trademarks of Successful Companies

1. A bias for action. 2. Close relations to the customer. 3. Autonomy and entrepreneurship. 4. Productivity through people. 5. Hands-on value driven. 6. Stick to the knitting 7. Simple form, lean staff 8. Simultaneous loose tight properties.

Critical Theory

Critical theorists are concerned with the abuse of power and work to eliminate oppressive practices. They consider organizations as sites of domination and communication as fraught with power.

Critical Theory abuses of management include:

Privileging certain members over others. Controlling access to technology and stipulating the rules for its use. Determining the communicative processes that are employed for decision making. Prescribing the chain of command, thereby legislating who should talk to whom. Using language as a means to debilitate employees.

Terms used by Critical Theorists

Ideology - describes the beliefs of employees about the normal and natural order of things, that may not be normal or natural. Hegemony - refers to the domination of one group by another, leading the oppressed group to accept or even support the ideology of the group in power. Emancipation - refers to the goal of critical theorists to liberate those who are oppressed.

Problems with Critical Theory

It assumes that the critical theorists ideology is the correct one. Critical theory intimates that organizations can be divided into three distinct groups, oppressors, oppressed, and enlightened which is not an accurate depiction of humankind.

The objective of emancipation is challenging and may be unrealistic in some ways.

Feminism and Critical Theory organizations have certain perceptions of appropriate roles for women and men. Feminist critics argue that male voices are privileged over others. This makes it harder for women and other minority groups to function and advance at work.

How are you feeling today?

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