THEORIES

OF
MANAGEMENT
Presented By:Swati.S.Dubey
1st Year Bba Llb
Law School
Sndt College
MODERN THEORIES OF MANAGEMENT
Modern management theories refinement, extension and synthesis
of classical theories of management.

Due to modernization , there are changes based on the

account of growth, human resources and the use of operations research.

The trends of modern theories of management started after 1950s.

BEHAVIOURAL APPROACH TO MANAGEMENT
Behavioural approach to management an extension of human relations
approach.
It highlights the study of (a) attitudes
(b) behaviour
(c) performance of individuals
(d) groups in organisations.
Under this approach

Theories and models of psychology,

sociology and anthropology (study of physical, biological and cultural
influences) are used to understand human behavior and performance.
These sciences are called as behavioural sciences so it is called
behavioural approach.
 Assumptions Of Behavioural Approach

1.) An organization is a socio – technical system.

2.) It is important to recognize individual differences

Needs values
attitudes perceptions

people who works in an organisations.

3.) Work and interpersonal behavior of people in organisations is influenced by
various factors.
4.) Human needs and organisationals goods should be joined together.

5.) Conflicts in organisations are unavoidable.

Behavioural Approach To Management Are Contributed By Eminent Writers
Such As :-

Abranham Maslow Douglas Mcgregor Frederick Herzberg Chris Argyris Keith Davis
a pyschologist A management Behaviour scientist Behaviour scientist Professor
professor

Behavioural scientist stressed the value of more democratic and less authoritarian
structure of organization. They supported participative approach to business.
Behavioural scientists assume that employees are very creative and competent.an
employee is a complex man.Manager has to change his style has individual needs.
Comparison between human relations and behavioural approach :-

POINTS Human Relations Behavioural Approach

1. Origin Results of hawthorne Originated during 1940s as a

experiements during 1920s. result of refinement and
extensions.
2.Pioneers Pioneered by Elton Mayo Pioneered
and his associates.
, Mcgregor, Davis and others.
3. Assumptions Oversimplified assumptions Scientific understanding of
about human nature. people and their behaviour.
4. Consideration Individuals are alike. Individuals are different.
5.Organisation Organisations are social Organisations are socio-
systems. technical systems.
 Contributions of Behavioural Approach:
1.) Behavioural scientists have contributed to our understanding of individual
motivation, group behaviour, interpersonal relationships and the importance
of work to human beings.
2.) Managers are made sensitive towards the needs of subordinates.

3.) Based on change in behavior pattern, new findings are noted in the
areas of leadership, communication, conflict resolution and
organizational change.
The Quantative Approach (1955 onwards)
This approach the use of mathematical techniques and models to
solve complicated management problems.
These quantitative tools are popularly known as Operations Research
techniques (OR) are designed to help in decision making .

This approaches assumes that if managerial and organizational

operations and decisions are based on logical process, then it can be
expressed in terms of mathematical symbols and relationships in the
word of Lindsay.
These techniques help the management to improve their decisions by :-

1.) Increasing the number of alternatives.

2.) Assisting in faster decision making.

3.) Helping management in evaluating the risks and results of different courses of
action.

4.) Bringing into optimum balance many diverse elements of a modern technique.
The quantitative approach consists of four steps:-

1.) First of all, mathematical model is constructed with variables

reflecting the important factors in the situation to be analyzed.
2.) Some standards are established for the purpose of comparing the relative
merits of possible courses of actions
3.) The empirical data is gathered which would relate to the parameters in the
goal utility.
4.) The mathematical calculations are made to find a course of action that will
maximize the goal utility.
 Areas using Quantitative Approach :-
1.) Linear programming : This technique is used to calculate how best to allocate
scarce sources among competing uses e.g., allocations of advertising budget to
different types of media.
2.) Simulation: It makes use of computer, by building a model many solutions to the
problem are obtained and the best solution is selected.
3.) Queuing Theory : In order to minimize the service cost as well as the
customer’s waiting time, this theory helps to plan the optimum number of
service stations e.g; number of teller counters in a bank.
4.) Inventory Modeling : Mathematical models are built to establish optimum
inventory levels of raw materials and finished goods. It helps to determine how
much to order at a time and when to place the order.
5.) Regression Analysis :- It involves predicting relationships among two or
morevariables e.g, the result of higher budget for advertisement on total sales.
6.) Preventive Control and Replacement Problems :- These problems relate to
maintainence and replacement of parts e.g, should we replace all the water taps
in the facrtory premises at the same time or should we replace them when they
start leaking.
7.) The Game Theory : It is extensively used in military planning and decision
making by evaluating the possible actions of the enemy and then formulating
the best responses.In the world of business,the problems of competition
must be anticipated and responsive moves planned.
Contributions of Quantitative Approach :
1.) quantitative approach has contributed to decision making in planning
and control.
2.) It has enabled large organisations to effectively solve problems.
3.) it is gainfully used in activities like capital budgeting,
production scheduling,inventory control, development of
product startegies, etc.
4.) It has popularized electronic data processing, management
information system and other techniques of managerial decision making.
SYSTEM APPROACH TO MANAGEMENT ( 1960
Onwards) :
System derived from Systema

To bring together or combine

A System is a set of inter related component parts which operates
together to achieve certain goals.
E.g; a car. Remove the carburetor and the car stops working

A system functions by acquiring inputs from the external environment,

transforming them in someway and discharging outputs back to the
environment.
 COMPONENTS OF A SYSTEM:
1.) Inputs:- These are the materials, human resources , financial
resources or information resources used to produce goods or services.
2.) Transforming process:- It is management use of technical know-how to
change the inputs into outputs.
3.) Outputs:- It includes the organization’s products and services.
4.) Feedback:- It is the knowledge of the results that influence the selection of
inputs in the next cycle of process.
5.) Environment:- It includes economic, social and political forces
surrounding the organization.
 Manager uses system approach
It is extremely difficulty for a manager to know which aspect is most
appropriate in a given situation.

Helps a manager diagnose a

What is needed is one broad problem and decide which tool or
combination of tools will do
Conceptual framework justice to work.

This integrated approach helps the manager to solve management

problem through system approach .
System approach is strongly advocated by chester 1 Banard , George
Homans , Philip Selznick , and Herbett Simon.
The advent of system theory dates back to the ideas of
Chester 1 Banard who characterized all organisations as
Coperative System.
Ludwig Von Bertalanffy, who is considered Father of the general system theory
propogated the idea in his publication General Systems Theory in 1969.
He observed “ In order to understand an organized whole we must know
both the parts as well as the relation between them ”.
A System Approach has the following Concepts :-
1.) Open or closed systems: Systems may be either open or closed.An open
system is one that is dependent on the outside environment for survival e.g;
human body as a system composed of many sub systems. This is an open system
and it must depend on outside input and energy for survival.
2.)Sub-systems: The parts that compromise the whole of a system are called sub-
systems.Each system may be a sub systems. Of a still larger whole e.g; a
department is a sub-system of a plant of which may be sub system of a company.
3.) Synergy: Synergy means that the whole is greater than the sum of its parts. In
organizational terms,synergy means when separate departments within an
organization cooperate and interact, they become more productive than if they
had acted in isolation e.g; it is certainly more efficient for each department to
deal with one secretarial department than for each department to have a
separate secretarial department on its own.
4.) Defined Boundaries: Each system has a boundary that separates it
from its environment. In case of a closed system, the system
boundary is rigid whereas in an open system, the boundary is flexible.
In a business organization, it has many boundary contacts or
interfaces with many external system like creditors, suppliers ,
customers, government agencies etc. The system is inside the
boundary, the environment is outside the boundary.
5.) Information, energy and material: Generally, there are three basics
inputs that enter the processor of the system viz.,
information(technology),energy (motive power) and materials to be
transformed into goods. If the outputs is service, materials are not
included in the inputs. If we have a consultancy firm, output is
information or advice. If we have a power generating company, output is
energy.
6.) Feedback mechanism: A system can adopt and adjust itself to the changing
environment through the feedback mechanism. As operations of the system
proceed, information in feedback to the appropriate peole. This helps to assess
the work and if need be, to get it corrected.
7.) Multidisciplinary: Systems approach integrates and uses with profits ideas
emerging from different school of thought. Managemenyt freely draws concepts
and techniques from man y fields of study such as psychology, sociology, ecology,
economics, mathematics, statistics, operations research etc.
8.) Input output system: A business organization is an input output system.
Input comprise of human, physical and financial resources obtained from the
environment. These resources are converted through various processes into
outputs of products and services as shown on the next page.
9.) Consideration of whole system :- No part of the system can be precisely
analyzed and understood without understanding all its parts. It means rather
than dealing separately with various parts of the one organisations, the system
approach attempts to give the manager a way of looking at the organization as
awhole. For example, in order to understand the operations of the finance or
production or marketing departments, he must understand the company as a
whole.It is a because activity of any one part of the company affects the activity
of every other part.
Environment

inputs Transformation outputs

process

Feedback
Contributions of system approach to management:-

1.) Under systems approach, managers look at the organization from a broader
standpoint. They recognize the interrelation of the various parts of the organization
e.g: the coordination of the administrative office with supervisors, workers and
manufacturing unit.
2.) It highlights interdependence among the various elements of an organisations
and its environment.
3.)It anticipates consequences and plan actions.

4.) System thinking warns managers against adopting piecemeal approach to

problem solving.
Contingency approach to management (1970 onwards)

During the early days of the development of management thought it was often
argued whether there exists one best way to apply principles and to conduct the
functions of management, to achieve organizational effectiveness.
Some theorists advocated the universalistic view of management and stated that
there indeed exists one best way to perform different management functions.
Other management theorists, who can be referred to as situationalists disagreed.
In the opinion of situationals, no one best approach to management exists because
each situation independently and decide what action to take.
Contingency theorists do not subscribe to any one best approach to management
. however they believed that all managerial situations are not totally different.
Some situations are often similar facilitating use of some principles of
management.
This is done by first identifying the relevant contingency variables in the situation
and then evaluating those factors .
According to contingency approach,the managers must identify which technique
will in a particular situation under particular circumstances,and at a particular time
best contribute to the attainment of management goals.The importance of a
contingency approach can be evolved with example.
Example: A manager is often asked to determine an effective leadership approach
is a particular situation. Certainly, subordinates characteristics is a relevant
contingency variable.
The characteristics of the subordinate’s is another contingency factor to
consider. Certain principles of leadership apply when the task in well-structured
others apply when the task is unstructured.
 Contingency view
Managers must identify
contingency variables:
 Size of the firm
 Environment
 resources
 Technology
 group of dynamics
 individual differences

Universal view Situationists View

- There is one best way - There are many ways
to manage to manage

AA Contingency Approach To Management Effectiveness

In essence the contingency approaches to management involves :-
(a) Recognition of situational nature of management
(b) Response to Particular characteristics of situation.

Characteristics of contingency approach to

management:-
(1) Contingency approaches makes it clear that organisations are diverse in their
size objectives, policies and goals. It is not possible to work out universally
applicable principles that would work in all situations.
2.) Contingency approach widens the viewpoint of managers from the concepts
principles and techniques of management theory. It promotes analytical, critical
and multi dimensional thinking on the parts of managers.
(3) This approach supports what Harold koontz has called Management theory
Jungle
There are a number of diiferent approaches explaining development of
management. This has created a jungle of confusion in which not only the
managhemnent p9reactitioners get involved but also professionals representing
other disciplines.prof Harold koontz has described the present stage of
management as “jungle” in two highly enlightened articles:
a)The management theory jungle
b) The management theory jungle revisited.
The diiferent school of management bring out diversified opinion on the subjects
of management
4.) contingency approach recognizes the influence of given solutions on
organizational behavior patterns.