Approaches to Management
Overview of Management Approaches
- Management approaches/ Organisational theories are a set of interrelated concepts and principles that give a systemic approach to various activities in the organization.
- It is classified into three parts: Classical Theory, Neoclassical Theory and Modern Theory.
- Post-1960’s management thought has been shifting highlights from the particular human relations theory specifically the relation between morale and productivity.
- The modern business theorists have acknowledged the social and moral responsibilities of business and thinking on similar lines and now the professional management is responsible for social relations with consumers, shareholders, human capital, trade unions and Government agencies.
- Under modern thought of management mainly three approaches have been noticed: Quantitative or Mathematical Approach, Systems Approach and Contingency Approach.
A. Behavioural approach
- Behavioural sciences approach also called a Neoclassical approach to management initiated after 1940 is an extension and modification version of the human relations approach.
- This approach tries to analyse the social factors affecting the working of an organisation and proposes a study of behavioural sciences including psychology, sociology and anthropology variables for understanding human behaviour at work and shaping human behaviour in the desired way.
- Some important sociologists and psychologists who are major contributors to this approach are Abraham Maslow, Hugo Munsterberg, Rensis Likert, Douglas McGregor, Frederick Herzberg, Mary Parker Follet, and Chester Barnard.
- Elton Mayo with his colleagues contributed to the human relations approach of management by their famous Hawthorne study.
- Features or elements of behavioural sciences approach:
- Along with an organisation being a physical-technical system, it is also a social system.
- All human resources have their own needs, motives, values, beliefs, desires and perceptual qualities and attributes.
- An organisation is incomplete without Informal groups of employees, which directs individual behaviour favourably/unfavourably towards formal job objectives.
- Conflicts are an essential part of the organisation, which can be between the organisation and employees and their groups
- Monetary and non-monetary motivation has a profound impact on human behaviour at work, which also affects productivity.
- For transforming workers’ attitudes and behaviour towards a healthy work environment and organisational goals, democratic leadership with informal supervision is essential.
- Two-way communication between employees and management results in good human relations and improved employee efficiency at work.
- Participation of employees in decision-making processes acts as a motivation and commitment device leading to the achievement of organisational goals.
- Better understanding of human behaviour at work, such as motivation, needs, conflict, expectations, and group dynamics leads to better productivity.
B. Quantitative approach
- The quantitative approach to management also called a mathematical approach involves the use of quantitative techniques, such as statistics, information models, and computer simulations, to improve decision making.
- Developed from Decision Theory School, this approach provides a quantitative basis for management decision making. Other names of this approach are Operations Research or Management Science School.
- Various mathematical and quantitative techniques including linear programming, simulation, inventory modelling and queuing theory, are regularly used in many management areas to get the solution of a wide range of problems.
- This approach aids in identifying and solving complex problems through mathematical techniques, regardless this approach is considered narrow by various theorists as it concerns only with the development of mathematical models and providing solutions for certain management related problems.
- Management science, operation management and management information system are models of Quantitative approach.
- Management science uses mathematics, statistics and quantitative techniques to help in the managerial decision-making process.
- Operations management focuses on managing the process of transforming factors of production such as labour, material and capital into the final output.
- Management information system focuses on designing and implementing computer-based information used by managers for daily operations.
C. System approach to management
- Contributors to this approach considered organization as an open system which is composed of a subsystem, interdependent parts of the organisation which interact with each other and function as a whole.
- According to this approach, management is a system or an organised whole body made up of subsystems which are interrelated and interdependent.
- An organization as a system is composed of four elements:
- Inputs — It includes resources like raw materials, natural resources, human resources. These are organised, motivated and controlled under transformation.
- Transformation processes —These are technological and managerial processes which result in output and achievement of organisational goals.
- Outputs — Theses are the final products or services produced to improve the quality of life for customers.
- Feedback — These include reactions from the environment, reviews from customers using the products.
- The basic characteristics of the Systems approach:
- A system consists of interacting elements. It is a set of interrelated and interdependent elements organised in a manner which results as a unified whole.
- Each organisational system has a borderline that classifies its elements as internal and external.
- Every system receives input from others as information and material, which goes under a transformation and drops the output for other systems.
- An organisation is exposed to changes as required by the environment in which it exists, so it is a dynamic system.
D. Contingency Approach
- Also called a situational approach, this theory was developed by W. Lorsch and P.R. Lawrence, who proposed that each management problem is different under different situations and organisations which should be solved as per the need of the situation.
- Contingency means immediate unforeseen situations. Organizations following this approach must modify their management process of planning, organizing, leading, directing and controlling according to what situation calls for.
- The contingency theory directs for theory with practice in a systems framework.
- It is an advanced version of a system approach which recognises that the organisational system is the result of the interaction of the subsystems along with the environment, and there is need of identification of the internal and external variables to the system.
- It does not take the universality of management theory rather it says there is no one best way or rule of doing activities.
- According to this theory in order to achieve goals and remain in a competitive market and effective policies and practices, organisations must adapt to changes in the environment which requires skills on part of human resources.
- The size of the organization, adaptation capability of organisations, organisational strategies and technologies being used are some factors which influence the contingency theory.
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