Evolution of Management Thoughts_ppm.pdf

About maning self and where you get to learn about the community and the communication skils even about the historical management
How was discovered
And management through diffrent perspectives Scientific management
Frederick Winslow Taylor (1856-1915) regarded as Example : 1
➢ Automaker Henry Ford made extensive use of Frederick
Taylor’s scientific management techniques, as illustrated
by this automobile assembly line at a Ford plant circa
1930.
➢ Ford replaced workers with machines for heavy lifting
and moving autos from one worker to the next.
➢ This reduced worker hours and improved efficiency and
productivity. Under this system, a Ford car rolled off the
assembly line every 10 seconds.
To implement the above principles, Taylor developed the following
techniques
■ Time Study
Observing and recording the time taken for each task, identify opportunities to streamline
processes, eliminate unnecessary steps, and set standards for efficient work completion.
■ Motion Study
Observing and analyzing the physical movements of workers as they perform tasks, identify
unnecessary or inefficient motions and to redesign processes to minimize wasteful movements.
■ Method Study
Examining work processes to identify and eliminate unnecessary steps, reduce complexity, and
find more efficient ways of performing tasks (example–Batch processing)
Limitations /criticism of scientific management
■ Overemphasis on Efficiency: Scientific management places a strong emphasis on
efficiency and productivity, often at the expense of other important factors, such as
employee well-being, job satisfaction, and quality of work.
■ Mechanistic View of Workers: Critics argue that scientific management treats imitations /criticism of scientific management
■ Overemphasis on Efficiency: Scientific management places a strong emphasis on
efficiency and productivity, often at the expense of other important factors, such as
employee well-being, job satisfaction, and quality of work.
■ Mechanistic View of Workers: Critics argue that scientific management treats
workers as mere cogs in a machine, reducing them to their physical abilities and
ignoring their intellectual and creative contributions
■ Lack of Flexibility: Scientific management is rigid and may not adapt well to
situations that require flexibility, creativity, or rapid changes. In dynamic and complex
environments, this approach may become obsolete.
■ Unrealistic assumption: Assuming that money is the only motivator is wrong as if it
was so simple to get maximum output from workers then why would there still exist
workers who are inefficient
■ Narrow view: The theory has a narrow view whereby it assumes that man can only
be motivated by money. The truth is men have needs beyond money like need to be
loved, need for affection
■ Incomplete Approach: Scientific management tends to focus on the technical
aspects of work and neglects broader organizational and human factors, such as
culture, teamwork, and employee development.
Bureaa

1. Evolution of Management
Thoughts
MODULE 2
(12 Sessions)
•Evolution of the concept of Management
•Various Schools of Management thoughts
•Classical Approach, Behavioral Approach & Quantitative
Approach

2. Historical background of management
■Management is as old as human civilization itself.
■The traces of management practices dates back to5000 B.C during agriculture
revolution.
■The church (hierarchy), the military (controlling and command, tactics ,strategy),
construction, and agricultural endeavors (coordinating and planning)
Management thought is an evolutionary concept which has
develop along with the growth of social, political, economic and
scientific institutions.

3. ■Sumerian civilization –earliest known
civilization in southern Mesopotamia.
Known for innovation, governance ,
architecture etc.
■As early as 4000 B.C., the Egyptians
were aware of the importance of
planning, organizing and controlling

4. ■In ancient India Kautilya wrote his
Arthashastra in about 321 B.C about
political, social and economic
management of the State.
■The study of administration of the
cities of Mohenjodaro and Harappa
of the ancient Aryans in 2000 B. C
■Traces of management practices
from the Mahabharat.

5. Forces leading to the evolution
Social Factors : Aspects of a culture that guides and influence relationship among people.
It is a shared value, belief, norms, which guide behavior and action of individuals in a
particular community.
■The social relationship in the workplace influences their performance, the output of the
organization.
■Example is the changing attitude, ideas and values of Generation X and
■Generation Y employees. In traditional organizations the people were having a different
set of values.
■Each generation has a different value system. They have a different ideology.

6. Economic factors refer to production and distribution of resources in society.
■Political factors refer to influence of political and legal institutions on people and
organizations.
■Example : Legal institutions mandatory employment of say 3 percent
reservation, there is a legal factor behind our political and legal issues which
bind organizations to give
■Make In India , FDI limits
Political factors refer to influence of political and legal institutions on people and
organizations.
▪Earlier organizations emphasized on profit maximization by optimally utilizing the
inputs or optimally utilizing resources.
▪Contemporary economy is based on much of the intangible assets like ideas,
information and knowledge, as it is on tangible or material resources.

7. Early History of Management – Pre- classical
■Robert Owen (1771-1858), British industrialist ,
philanthropist , textile m manufacturer , social reformer
➢Introduced the importance of -
■Human resource
■Improve factory condition
■Workers performance will be improved through the overall
environment
■Relationship between employer and employee

8. ➢Charles Babbage- (1792-1871)
■Patron of operation research and management
science, mathematician
■Improve efficiency of laborer through
specializations

➢Adam Smith (1723-1790) The wealth of nation
■Division of work
■Specialization of work

9. Management thoughts in different perspective
■Classical
perspective
■1875-1900
■Managing workers
and organization
efficiently
■Focus on production
■Modern/ Quantitative
perspective
■1925-1950
■Quality of managerial
decision using
mathematical and
statistical methods
•Neo classical or
Behavioral perspective
•1900-1925
•Understanding human
behavior in an
organization

10. Contd..
■System perspective
■1950-1975
■Organization as a
system that transform
input to output keeping
the environment in
consideration
■Contingency
perspective
■1975-2000
■Application of
management principles
and practices as per the
unique situation
▪Contemporary
▪2000-onwards
▪Continuous advancement
of the management
▪Total quality management
and learning organization

11. Classical approach : The early study of management as we know it today began
with what is now called the classical perspective.
■The factory system that began to appear after the industrial revolution posed
challenges for earlier organizations.
■Problems in tooling the plants, organizing managerial structure, training employees
(many of whom were non-English-speaking immigrants), scheduling complex
manufacturing operations, and dealing with increased labor dissatisfaction and
resulting strikes.
■Challenges of organizing, coordinating, and controlling large numbers of people and
increasing worker productivity.
■Thus began the evolution of management with the classical perspective.

12. ■Classical theories of management are the oldest and most traditional theories of
management. These theories were generated in late 1800’s and early 1900’s. They
revolve around the basic assumption that people are motivated by economic incentives
The classical theory can be further categorized into three theories
■Scientific Management Theory
■Administrative Principles
■Bureaucratic

13. Frederick Winslow Taylor (1856-1915) regarded as the “Father of Scientific Management”
“the best management is a true science, resting upon clearly defined laws, rules, and
principles.
➢Science, Not rule of Thumb
Informed decisions through careful analysis and research rather than relying solely on
intuition or historical practices (example , TV advertisements )
➢Harmony, Not Discord
Effective communication, conflict resolution, and teamwork to ensure a productive and
positive workplace (example – collaboration vs blame games )
Scientific management

14. ➢Maximum output in place of restricted output
Optimizing efficiency and productivity rather than adhering to limitations. Encourages
processes and practices that aim for the best possible outcomes (example , fix production
vs use of technology and processes)
➢Development of each person to his greatest efficiency
Significance of individual growth and development (example , training and development)
➢Cooperation, Not Individualism
Collaboration and working together as a team rather than focusing solely on individual
achievements to encourage cooperation, shared goals, and mutual support

15. Example : 1
➢Automaker Henry Ford made extensive use of Frederick
Taylor’s scientific management techniques, as illustrated
by this automobile assembly line at a Ford plant circa
1930.
➢Ford replaced workers with machines for heavy lifting
and moving autos from one worker to the next.
➢This reduced worker hours and improved efficiency and
productivity. Under this system, a Ford car rolled off the
assembly line every 10 seconds.

16. To implement the above principles, Taylor developed the following
techniques
■Time Study
Observing and recording the time taken for each task, identify opportunities to streamline
processes, eliminate unnecessary steps, and set standards for efficient work completion.
■Motion Study
Observing and analyzing the physical movements of workers as they perform tasks, identify
unnecessary or inefficient motions and to redesign processes to minimize wasteful movements.
■Method Study
Examining work processes to identify and eliminate unnecessary steps, reduce complexity, and
find more efficient ways of performing tasks (example–Batch processing)

17. Limitations /criticism of scientific management
■Overemphasis on Efficiency: Scientific management places a strong emphasis on
efficiency and productivity, often at the expense of other important factors, such as
employee well-being, job satisfaction, and quality of work.
■Mechanistic View of Workers: Critics argue that scientific management treats
workers as mere cogs in a machine, reducing them to their physical abilities and
ignoring their intellectual and creative contributions
■Lack of Flexibility: Scientific management is rigid and may not adapt well to
situations that require flexibility, creativity, or rapid changes. In dynamic and complex
environments, this approach may become obsolete.

18. ■Unrealistic assumption: Assuming that money is the only motivator is wrong as if it
was so simple to get maximum output from workers then why would there still exist
workers who are inefficient
■Narrow view: The theory has a narrow view whereby it assumes that man can only
be motivated by money. The truth is men have needs beyond money like need to be
loved, need for affection
■Incomplete Approach: Scientific management tends to focus on the technical
aspects of work and neglects broader organizational and human factors, such as
culture, teamwork, and employee development.

19. Bureaucratic organizations
A systematic approach that looks at the organization as a whole. Max Weber (1864–1920), a
German theorist, introduced most of the concepts on bureaucratic organizations.
■Specialization and an elaborate division of labor
Breaking down tasks and responsibilities into specialized roles to increase efficiency and
expertise.
■Hierarchy of positions
There's a clear chain of command with various levels of authority. The hierarchical structure
ensures that decisions flow through organized channels and accountability is maintained.

20. ■Technical competence as the chief criterion for recruitment and promotion
Employees are selected and promoted based on their qualifications, skills, and competence rather
than personal relationships or favoritism
■Written rules and regulations
Clear and well-defined rules and procedures to standardize operations and decision-making
■ Impersonal Relationships
Bureaucracies strive to maintain professional interactions rather than favoring personal
connections
■Formal, written communication
Formal written communication to ensure clarity and accuracy. For instance, in a corporate setting,
important decisions might be communicated through official emails or documented in memos

21. Merits of Bureaucratic approach
■Predictable: Since the rules are clearly defined the employees behavior is predictable,
making the management process easier to implement.
■Specialization: Division of work leads to specialization of labor. As all employees know
what they are supposed to do.
■Structure: A well defined hierarchy gives a structure to the organization. Every
employees is aware that who his/ her superior is and also who his/ her subordinate is.
■ Rationality: As impersonal conduct is promoted it leads to rational decision making.
Decision is based on facts and logic rather than emotions and gut feeling

23. Example 2:
UPS is the largest package delivery company in the world. One
important factor in the company’s success is the concept of
bureaucracy.
■UPS operates according to meticulous rules and regulations.
■Strict dress codes are enforced. New drivers attend intensive
training courses and memorize the company’s more than 600
mandatory “methods,” including precise steps for how to correctly
deliver a package, such as how to load the truck, how to fasten their
seat belts, how to walk, and how to carry their keys.
■Drivers use delivery-information acquisition devices that record the
time and location of all deliveries, and more than 200 sensors on
each delivery truck track everything from backup speeds to seat-belt
use.

24. Limitation/criticism of Bureaucratic approach
■Rigidity and Inflexibility: The strict adherence to rules, procedures, and hierarchy can
hinder an organization's ability to adapt to changing circumstances or seize new
opportunities.
■Red Tape and Slow Decision-Making: The extensive paperwork and formal
procedures characteristic of bureaucracies can lead to bureaucracy becoming slow
and cumbersome in decision-making and implementation.
■Bureaucratic Redundancy: Bureaucracies can sometimes create redundant layers of
management and administrative positions, which can increase costs and hinder
efficiency.

25. ■Resistance to Change: Bureaucratic organizations may resist change, as established
rules and procedures can act as barriers to innovation and adaptation
■Impersonal and Dehumanizing: Bureaucratic management is often criticized for its
impersonal nature. The strict adherence to rules and hierarchy can dehumanize the
workplace, leading to a lack of empathy and understanding among employees and
between employees and management.
■Overemphasis on Rules: Critics argue that bureaucratic organizations can become
rule-bound, where following procedures becomes more important than achieving
organizational goals or serving customers

26. Administrative perspective
Henri Fayol (1841–1925), a French mining engineer gave a administrative principles
approach considers the total organization’s management .
➢Division of work (dividing the production process into specialized tasks like assembly,
painting, and quality control as per the expertise)
➢Authority and Responsibility (work assigned to any person, and authority means
rights that are given to him to perform that work)
➢Discipline (adherence to organizational rules and guidelines)
➢Unity of command (Each subordinate receives orders from one—and only one—
superior)

27. ■Unity of Direction (importance of having a single, unified direction for the organization’s
goal)
■Subordination of individual interest to general interest (Interests of the organization
as a whole should take precedence over individual preferences)
■Remuneration of Employees (fair compensation should be provided to employees for
their contributions)
■Centralization and Decentralization (Centralization refers to the concentration of
decision-making authority at the top levels of the organization, while decentralization
involves delegating decision-making to lower levels of the organization)

28. ▪Scalar chain (Maintaining a clear hierarchical structure for communication and
authority)
▪Equity ( Employees should be treated fairly and with kindness. Fair treatment
promotes loyalty and commitment from employees)
▪Stability of Tenure (Minimizing employee turnover and ensuring stability in the
workforce)
▪Initiative (encourages employees to take proactive steps and make suggestions to
improve the organization)
▪Esprit De Corps (building a sense of unity and camaraderie among employees)

29. Criticism of Administrative perspective
■Lack of Empirical Evidence: Many of his ideas were based on his personal
observations and experiences, rather than rigorous scientific research. Critics argue that
his principles may not be universally applicable or empirically validated.
■Lack of Flexibility:Advocate for a standardized approach to management, which some
critics argue can be overly rigid and may not accommodate the unique characteristics
and needs of different organizations or industries
■Ambiguity and Overlapping Principles: Some of Fayol's principles are criticized for
being vague and overlapping. For example, the principles of "authority" and "discipline"
may seem similar and can lead to confusion in their interpretation and implementation.

30. ▪Authoritarian Approach:Fayol's emphasis on hierarchical authority and centralized
decision-making has been criticized for promoting an authoritarian management style
▪Neglect of Human Element:Fayol's principles often downplay the importance of the human
element in organizations. Critics argue that his focus on structure and processes may
neglect the psychological and social aspects of management, such as motivation,
teamwork, and employee satisfaction.
▪Lack of Attention to External Factors: Focus on internal organizational functions and
processes. Critics argue that they do not adequately address the influence of external
factors, such as the competitive environment, customer demands, or technological
advancements.

31. Neo –classical / behavioral /humanistic perspective
■Elton Mayo (1880-1949) is as the Father considered as the Human Relations School. He
introduced human relations approach to management thought
■It modified, improved and extended the classical theory which only concentrated on job content
and management of physical resources. Primary focus of neo –classical perspective is the
humanity of production.
■It emphasizes the importance of understanding human behaviors, needs, and attitudes in the
workplace.
It had subfields based on the humanistic perspective:
1. Hawthorne Experiment
2. Human Relation Movement
3. Behavioral Approach.

32. The human relations movement
■This school of thought recognized that truly effective control comes from within the
individual worker rather than from strict, authoritarian control.
■Emphasized the psychological and social needs of employees in order to improve
productivity and organizational effectiveness.
■Mayo who led the team for conducting the study at Western Electric's Hawthorne Plant
(1927-1932) to evaluate the attributes and psychological reactions of workers in
on-the-job situations

33. Key contribution of the Human Relations Movement
➢Hawthorne Studies conducted at the Western Electric Hawthorne
Works in Chicago between the 1920s and 1930s.
➢Elton Mayo and Fritz Roethlisberger, found that factors such as
attention, recognition, and social interactions had a significant
impact on employee productivity and job satisfaction.
1.Illumination Experiments (1924-1927) (working environment )
2.Relay Assembly Test Room Experiments (1927-1932) (change in
job conditions)
3.Experiments in Interviewing Workers (1928- 1930) (employees
attitudes towards company and top management)
4.Bank Wiring Room Experiments (1931-1932) (functioning of
small group and its impact on individual behavior)
Hawthorne Studies - YouTube

34. Illumination Experiments (1924-1927)
The initial hypothesis was that higher illumination levels would lead to increased productivity.
1.Experimental Design: The workers were divided into two groups - an experimental
group and a control group. The experimental group experienced variations in the
intensity of illumination, while the control group worked under constant illumination
conditions.
2.Initial Observation: Surprisingly, both groups (experimental and control) showed
increased production as illumination levels were raised. Even when illumination levels
were decreased, production continued to increase in both groups.
3.Key Observation: Productivity in the experimental group only decreased when the
illumination was reduced to the level of moonlight. This extreme reduction in light was
identified as the point where productivity was negatively impacted.
4.Conclusion: Based on these observations, the researchers concluded that illumination
alone did not have a significant effect on productivity. Instead, they speculated that some
other factor was influencing productivity, but they were not certain about which aspect of
the human factor was responsible.

35. Relay Assembly Test Room Experiments (1927-1932)
■Experimental Setup: Two girls were selected to perform the task of assembling
telephone relays. They were allowed to choose four more girls as coworkers. The
assembly of telephone relays involved multiple parts and required speed and continuity in
their work.
■Introduction of Changes: Various changes to the work conditions and environment were
introduced .These changes included altering the incentive system, introducing rest
periods, adjusting rest intervals, providing refreshments during breaks, and
changing working hours and workdays.
■Observation : As each change was introduced, absenteeism decreased, morale
increased and less supervision was required. Again , with revert to the original conditions
with no rest periods or additional benefits, productivity continued to increase.
■Conclusion: It was realized that the positive changes in productivity were not solely due
to physical factors but were primarily a result of changes in the girls' attitudes towards
work and their sense of belongingness. The introduction of more freedom, a sense of
responsibility, and a close and friendly relationship between the supervisor and
workers contributed to this improved productivity.

36. Experiments in Interviewing Workers (1928- 1930)
■Scope and Timeline: Between 1928 and 1930, approximately 20,000 interviews were
conducted as part of the program. The goal was to understand employees' attitudes
towards various aspects of their work, including company policies, supervision,
insurance plans, promotion opportunities, and wages.
■Initial Direct Questioning: Initially, interviews involved direct questioning, such as
asking employees if they liked their supervisors or if they believed their supervisors
were fair.
•Findings : Employee complaints often indicated deeper personal issues rather than
straightforward problems. Workers attached social meanings to their workplace
experiences, affecting their satisfaction. An employee's personal situation was a
complex interplay of personal preferences and social factors. Workers derived
meaning from their work environment based on their position in the company, social
organization, and social rewards.
During the course of interviews, it was discovered that workers‘ behavior was being
influenced by group behavior.

37. Bank Wiring Room Experiments (1931-1932)
The experiments aimed to analyze the functioning of small groups and their impact on
individual behavior within a bank wiring room
■Experiment design : This group comprised fourteen male workers. Their primary task was
attaching wire to switches used in telephone exchange equipment. The workers' hourly
wage rate was based on their individual average output, while bonuses were determined by
the group's average output. The initial hypothesis was that workers, motivated by the desire
for higher earnings and group bonuses, would produce more by helping each other.
■Results: The workers themselves set lower production targets than those set by the
company. Several reasons were given for this restricted output.
■Fear of Raising Standards
■Protection of Slower Workers
This study highlighted the significance of informal relationships and group dynamics in
influencing human behavior in the workplace

38. Conclusion drawn from the Hawthorne experiments :
■Employee's behavior is influenced by mental attitudes and emotions including
prejudices.
■The workers in a group develop a common psychological bond uniting them as a group
in the form of informal organization.
■In managing and motivating employee groups, human and social motivation plays greater
role then financial incentives.
■Management must understand that a typical group behavior can dominate or even
supersede individual propensities and preferences.
■When workers are given special attention by management, the productivity is likely to
increase irrespective of actual changes in the working conditions
The experiments conclude that cause of increase in the productivity of the workers is not a
single factor like rest pauses or changing working hours but a combination these and
several other factors such as less restrictive supervision, giving autonomy to workers,
allowing the formation of small cohesive groups of workers and others.

39. Human Resources Perspective
■Idea Behind this perspective was that satisfied workers will produce more work. This
was based on the idea of theory of motivation.
■It focuses on recognizing employees as valuable assets.
■In this perspective jobs should be designed so that tasks are not perceived as
dehumanizing or demeaning but instead allow workers to use their full potential.
■This perspective combines prescriptions for design of job tasks with theories of
motivation.

40. Key contributors to the human resources perspective : Abraham Maslow and
Douglas Mc
■Abraham Maslow (1908–
1970)
■A psychological theory that
describes human motivation
and the hierarchy of different
types of needs that
individuals seek to fulfill.

41. Douglas McGregor (1906–1964)- a manager
and consultant
•Theory X and Theory Y are two contrasting
managerial assumptions.
•These theories represent two different
perspectives on how managers perceive and
approach employee behavior and motivation
within an organization
•Most individuals and organizations exhibit a mix
of both perspectives depending on the situation
and the context

43. Case : Buurtzorg is a Netherland based healthcare organization established
in 2006
➢It follows a nurse-led model of holistic care that revolutionized community care
in the Netherlands.
➢The Theory Y approach has helped Buurtzorg grow and succeed and has
enabled nurses to provide better care.
➢When Buurtzorg needs to rent new office space, the decision isn’t made by
administrators or consultants. Instead, teams of nurses decide where the offices
will be located.
➢For deciding which patients to serve, how to allocate resources and tasks, which
doctors to work with, and how to coordinate with local hospitals. Founder Jos de
Blok believes that if nurses are entrusted with responsibility, they will do what is
best for the patient.
➢Management tasks are spread across team members, with teams even
monitoring their own performance and taking corrective action when needed

44. Features of Neo –classical approach
1.A business organization is not merely a techno-economic system but also a social
system and involves human element.
2.An individual employee is motivated not merely by economic incentives but also by
non economic incentives, psychological and social interests, needs and aspirations.
3.In place of task-centered leadership, the employee-centered, humanistic, democratic
and participative style of leadership should be introduced as it is more effective /
productive.
4.Employees are not necessarily inefficient or negative in their approach. They are
capable of self-direction and control.

45. 5. Employees performance can be raised by meeting their social and psychological needs.
Cordial atmosphere at work place is also useful for raising productivity.
6. Management needs social skills along with technical skills in order to create a feeling
(among the employees) that they are a part and parcel of the organization and not outsiders.
7. Employees need respect and positive feeling from the management. For this, employees
should be encouraged to participate and communicate freely their views and suggestions in
the concerned areas of decision-making.
8. The management has to secure willing cooperation of employees. The objective before
the management should be to secure cooperative effort of its employees. For this, employees
should be made happy and satisfied.

46. Limitations of Neo-classical approach
1.Too much importance to employees, and social needs while ignoring
organizational issues, environment at the work place, labor unions.
2.Employee-oriented approach to a limited extent.
3.Faulty assumption in the theory that workers satisfaction is the only factor which
raises industrial productivity but other factors also.
4.Limited importance to economic incentives .

47. Modern/ Quantitative perspective
■Complex businesses needs robust decision making by the managers and leaders.
■Emphasis on using mathematical and statistical techniques to improve decision-
making and organizational efficiency.
■The systems approach as well as contingency approach provide one integrated
approach to management problems.
■This approach majorly focuses on solving the problems like allocation of resources,
scheduling of task, managing inventory through quantitative methods.

48. System approach
■This approach view
organizations as a complex and
interconnected system.
■This approach emphasizes the
interdependence of various
parts within an organization and
organization as a whole.
Feedback
Customers
Employees
Competitors

49. Examples of some commonly used
quantitate methods are:
➢ Demand forecasting
➢ Inventory management
➢ Queuing theory
➢ Break-even analysis

50. Features of a system approach
▪Management as a Social System
▪Management as Open System
▪Management points out the multilevel and multidimensional features
▪Management is interdependent
▪Management is multivariable and involves taking into account many variables
simultaneously
▪Management as a system is dynamic
▪Management is adaptive in nature
▪Management is probabilistic and not deterministic
▪Management aims to gain synergy

51. Implication of system approach
■Holistic Perspective: It encourages managers to view organizations as complex and
interconnected systems where every part affects the whole. This holistic perspective
helps in understanding the interdependencies within an organization.
■Interdisciplinary Collaboration: The system approach promotes collaboration across
various disciplines and departments within an organization. It emphasizes the need for
different functions to work together to achieve common goals.
■Feedback and Adaptation: Managers should continuously gather feedback from
different parts of the organization and the external environment. This feedback allows
for adjustments and adaptations to improve overall performance.
■Identifying Cause and Effect Relationships: The system approach helps in
identifying cause-and-effect relationships within an organization. Managers can pinpoint
how changes in one part of the system affect other parts and the organization as a
whole.
■Long-Term Thinking: It encourages long-term thinking and planning. Managers should
consider the long-term consequences of their decisions on the entire organization rather
than focusing solely on short-term gains.

52. ■Complex Problem Solving: Complex issues and challenges are addressed by considering
their systemic nature. This involves looking beyond superficial symptoms to identify underlying
systemic causes.
■Change Management: When implementing changes, the system approach recognizes that
alterations in one area can have ripple effects throughout the organization. Therefore, careful
planning and consideration of these effects are essential.
■Environmental Considerations: Organizations are seen as open systems that interact with
their external environment. Managers need to adapt to changes in the external environment
and consider the impact of their actions on it.
■Optimizing Efficiency and Effectiveness: The system approach aims to optimize the overall
efficiency and effectiveness of the organization rather than optimizing individual components in
isolation.
■Continuous Improvement: It supports the concept of continuous improvement, where
organizations strive to enhance their overall performance by identifying and addressing
systemic inefficiencies and weaknesses.

53. Limitations of system approach
■Abstract Approach. It is often suggested that systems approach is too abstract to be of
much use to practicing managers. It merely indicates that various parts of the
organization are interrelated. Similarly, an organization is a social system and, therefore,
is related with other organizations in the society. This is true and significant for managing.
But it fails to spell out precisely relationships among these. Therefore, its contribution to
managing is limited.
■Lack of Universality. Systems approach of management lacks universality and its
precepts cannot be applied to all organizations. These systems are suitable for large and
complex organizations but are not suitable for small organizations. Since most modern
organizations are large and complex, it is argued that systems approach is applicable in
general.

54. Contingency approach
■This approach assumes that different type of situation and situation is believed to
be unique to an organization.
■Therefore, principles of management or management concepts cannot be
universally applicable.
Example:
■One example of the contingency approach is in leadership. According to this
approach, the effectiveness of a leadership style depends on the situation. For
instance, a participative leadership style may be more effective in a creative and
dynamic team, while a directive leadership style might be more appropriate in a
crisis situation.

55. Features of contingency approach
▪Management is entirely situational
▪Management as per the requirements
▪Management principles have no universal/general applicability
▪Managers need to identify best technique or method for achieving the
management objectives
▪Organizational action should be based on the behavior of action outside the
system so that organization should be integrated with the environment.

56. Implications of Contingency Approach
■Innovative Approaches
Managers receive support in developing new and improved approaches to tackle complex
situations. This encourages them to think analytically, critically, and from multiple perspectives,
leading to creative problem-solving.
■Increased Freedom
Managers are granted greater freedom in decision-making and adapting their management style
to fit specific situations. This flexibility allows them to tailor their approach based on the unique
needs and demands of the organization and its environment.

57. ■Enhanced Sensitivity and Alertness
The theory promotes managers’ sensitivity and alertness to the ever-changing external
environment. They gain a realistic understanding of the complexities of managing
organizations, becoming more attuned to potential opportunities and threats.
■Contextual Focus
Managers become more situation-oriented rather than adhering to rigid stereotypes or one-
size-fits-all principles. They recognize that the most effective management strategies depend
on specific circumstances, taking into account factors such as organization size, task
technology, and environmental uncertainty

58. Specific leadership styles based on the circumstances
Laissez-Faire Leadership: Empowering Independence
■Laissez-faire leadership is valuable when leaders aim to foster independence and
decision-making capabilities within their teams.
■ By providing autonomy and trust, leaders can empower their team members to take
ownership of their work and make decisions that align with their expertise.
■This style may not be suitable in situations that require immediate action or strong
guidance.
Autocratic Leadership: Quick Decision-Making in Urgency
▪In urgent or time-sensitive matters, autocratic leadership can be beneficial.
▪This style allows leaders to make rapid decisions and provide clear direction.
▪However, over-reliance on this approach can stifle creativity and limit the engagement of
team members.

59. ■Democratic Leadership: Balancing Input and Decision-Making
Democratic leadership involves involving team members in the decision-making process,
fostering collaboration, and considering diverse perspectives.
While this approach can lead to more informed decisions and increased employee
engagement, it may not always be suitable when time-sensitive or tactical decisions need to
be made promptly.
■Transformational, Transactional, and Servant Leadership: Context is Key
Transformational Leadership:Effective in situations where change and innovation are
needed. It can be particularly valuable during times of organizational crisis or when an
organization is striving to achieve ambitious goals
Transactional Leadership:Effective in stable, task-oriented environments where routine
performance and compliance are critical. It may be suitable for organizations where strict
adherence to processes and procedures is essential, such as manufacturing or quality control
settings.
Servant Leadership: Beneficial in contexts where teamwork, collaboration, and employee
development are essential. It can be particularly effective in organizations that emphasize
social responsibility, employee empowerment, and a strong sense of community.

60. Limitations of contingency approach
■Difficulty in Implementation: Critics argue that the contingency approach can be
challenging to implement in practice because it requires a deep understanding of the specific
situation and the ability to adapt quickly
■Complex: The suggestion of the approach is very simple, that is, managers should do
according to the needs of the situation. However, when put into practice this becomes very
complex. Determination of situation in which managerial action is to be taken involves
analysis of a large number of variables with multifarious dimensions. Therefore, there is a
possibility that managers, who are always short of time, may ignore the thorough analysis of
all these variables and may resort to short-cut and easier way

61. ■Reactive not Proactive: Approach tends to be reactive rather than proactive, focusing
on what managers can do in a given situation. However, managers also have the
responsibility to influence and manage their organizational environment proactively,
leveraging their influence and creativity to navigate environmental changes effectively.
■Overemphasis on Situational Factors: Critics argue that the contingency approach
may overemphasize situational factors at the expense of other important aspects of
management, such as leadership skills and ethics.

62. Videos
■https://youtu.be/EobeHwOw3S4