Lecture 10.11.12

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Lecture6 (10.11.12)Open System and Contingency Management Theories,

Discussion on Planning & Organizing

Chandrasen KumarM.Sc. (DU), MPA (LKYSPP, Singapore)

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Todays overview

1) Minor Exams: Discussion on nature of paper

2) More about Open System Theory of Management

3) More about Contingency Theory of Management

4) Planning and Organising: Basic discussion today

and details shall continue

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Open System Theory

This theory is different from the rest we havediscussed earlier

It saysthere is no one best way to run the

organization or limited number of immutable

principles uniformly applicable in all situations Emphasizes situational analysis:

Identification and

Analysis

of multiple variables affecting and determiningorganizational behaviour and effectiveness

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Open System Theory

A system is a set of interrelated units The whole is greater than the sum of all units

example?

Traditional theories viewed organizations as closed

systems:It regarded the enterprise as sufficiently independent to allow

most of its problems to be analyzed with reference to its internal

structure and without reference to its external environment

Whereas OST views organisations as: Entities existing in dynamic and interdependent

relationship with environment receiving resources and

transforming into outputs and transmitting them to

environment, reactions are then fed-back to the system

as input, and cycle is maintained

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Open System Theory

Survival is the primary goal and in order to do that Organizations must acquire and developVe entropy

because closed systems experience chaos, eg. Wearingout of parts, breakdown etc.

Open systems have differentiation and elaboration of

roles through specialization and equifianlity Open systems amy achieve purposes/goals through

diverse sets of inputs and different configuration ofsystem componenets

Environment emerges as crucial variable Managing requires constant monitoring of

environment to overcome complacency andobsoletness

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Open System Theory

Thus OST: Provides a framework analyzing and understanding an

organization and required management system/practices

Does not negate other theories we have studied

Merely encourages to recognize all organizations aresame but they are all different

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Contingency Theory

This theory is also different from the rest we havediscussed earlier and

Provides another framework analyzing and understanding

an organization and required management

system/practices

Does not negate other theories we have studied

Emphasizes the differences among organizations and

seeks to identify variables contingencies affecting

Organizational structure

Performance and

Effectiveness

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Contingency Theory

Environment affects organizational behavior JamesThomson identified stability and homogeneity are

crucial contingencies for structure

Organizations adapt to unstable heterogeneous

environment through Decentralization

Increase in monitoring units and

Complex divisional structure

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Contingency Theory

Different contingencies have different impact Laurence and Lorsch Stability impacts differentiation,

formalization and centralization

Organizational technology Basic work flow, process and

methods

Fred Fiedler Leadership styles: Different situations with

different leders would give different outputs

Thus Contingency Theory

Substituted it all depends for One best way

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10

PlanningLearning overview

How do managers plan?

What types of plans do managers use?

What are the useful planning tools and techniques?

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Planning The process of setting objectives and determining how

to best accomplish them.

Objectives

Identify the specific results or desired outcomes thatone intends to achieve.

Plan

A statement of action steps to be taken in order to

accomplish the objectives.

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Steps in the planning process: Define your objectives.

Determine where you stand vis--vis objectives.

Develop premises regarding future conditions. Analyze and choose among action alternatives.

Implement the plan and evaluate results.

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The roles of planning and controlling in the

management process.

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Benefits of planning: Improves focus and flexibility.

Improves action orientation.

Improves coordination. Improves time management.

Improves control.

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A sample means-ends chain for total quality

management.

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Short-range and long-range plans Short-range plans = 1 year or less

Intermediate-range plans = 1 to 2 years

Long-range plans = 3 or more years

People vary in their capability to deal effectively withdifferent time horizons.

Higher management levels focus on longer timehorizons.

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Strategic and operational plans Strategic plans set broad, comprehensive, and

longer-term action directions for the entireorganization.

Operational plans define what needs to be donein specific areas to implement strategic plans. Production plans

Financial plans

Facilities plans Marketing plans

Human resource plans

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Policies and procedures Standing plans

Policies and procedures that are designed for repeated use.

Policy

Broad guidelines for making decisions and taking action in

specific circumstances. Rules or procedures

Plans that describe exactly what actions are to be taken inspecific situations.

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Budgets and project schedules Single-use plans

Only used once to meet the needs and objectives of a well-defined situation in a timely manner.

Budgets

Single-use plans that commit resources to activities, projects, orprograms.

Fixed, flexible, and zero-based budgets.

Projects

One-time activities that have clear beginning and end points.

Project management and project schedules.

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What are the useful planning tools and

techniques?

Forecasting Making assumptions about what will happen in the

future.

Qualitative forecasting uses expert opinions.

Quantitative forecasting uses mathematical and

statistical analysis.

All forecasts rely on human judgment.

Planning involves deciding on how to deal with the

implications of a forecast.

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techniques?

Contingency planning

Identifying alternative courses of action that can be

implemented to meet the needs of changingcircumstances.

Contingency plans anticipate changing conditions.

Contingency plans contain trigger points.

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Study Question 3: What are the useful

planning tools and techniques?

Scenario planning A long-term version of contingency planning.

Identifying alternative future scenarios.

Plans made for each future scenario. Increases organizations flexibility and preparation for

future shocks.

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techniques?

Benchmarking Use of external comparisons to better evaluate current

performance and identify possible actions for the future.

Adopting best practices of other organizations thatachieve superior performance.

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techniques?

Use of staff planners

Coordinating the planning function for the total

organization or one of its major components.

Possible communication gaps between staff planners and

line management.

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techniques?

Participation and involvement

Participatory planning requires that the planning

process include people who will be affected by theplans and/or will help implement them.

Benefits of participation and involvement:

Promotes creativity in planning.

Increases available information.

Fosters understanding, acceptance, and commitment to the

final plan.

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How participation and involvement help

build commitments to plans.

Documents

Lecture 10.11.12