SYSTEM APPROACH

OPERATIONAL APPROACH

QUANTITATIVE APPROACH

CONTINGENCY THEORY

THEORY Z

TOTAL QUALITY MANAGEMENT

Organization is a system consisting of four subsystems-

task,structure,people and environment

Subsystems are interconnected and interdependent

Management regulates and modifies the system to optimize

performance

OPERRATIONAL APPROACH

Production – oriented field of management

dedicated to improving efficiency and cutting waste

QUANTITATIVE APPROACH

A problem is expressed in the form of quantitative or mathematical model

Different variables in management can be quantified and expressed in the form of an equation

Management =decision making, organization=decision making unit

CONTINGENCY THEORY

There is no universal or one best way to manage

Wide range of external and internal factors must be considered and the focus should be on the action that best fits for the situation.

THEORY Z Theory Z has been called a sociological description of the

humanistic organizations

“Theory Z is an approach to management based upon a combination of American and Japanese management philosophies”. Proponents of Theory Z suggest that it leads to improvements in organizational performance.

TOTAL QUALITY MANAGEMENT APPROACH Wide effort to improve quality of products and services

People and organizations mainly focus on quality given by

Quality = results of work efforts

total costs

SYSTEM APPROACH

LUDWIG VON BERTALANFFY IS RECOGNIZED

AS THE FOUNDER OF GENERAL SYSTEM THEORY.

SYSTEM: A system is a set of INTERRELATED but

separate parts working towards a commonpurpose.

TYPES OF SYSTEMS:1)Open system.2)Closed system.

KEY TERMS

• SUBSYSTEM : parts of system that depends on each other.

• Internal subsystem.• External subsystem.

• SYNERGY : cooperation between subsystems.

• SYSTEM BOUNDARY:separationb/n internal and external subsystems.

COMPONENTS OF A SYSTEM

• Inputs • Transformation process• Outputs • Feedbacks• environment

• Subsystems have proper order and communication b/n them.

• Decisions are based on impacts on various subsystems.

LEVELS OF SYSTEMS

THREE FUNCTION SYSTEMS MODEL• Benchmarking• Leadership• Employee involvement• Process involvement• Customer focus

FEATURES OF SYSTEM APPROACH

• Dynamic• Adaptive • Multilevel and multidimensional• Managers will have a good view• Gives importance to interdependence of different parts

• Forecasts consequences and plans actions

Closeness to reality.

The approach may be utilised by any of the other approaches.

Complex when used in large organisations.

Increased difficuilty for managers.

ADVANTAGES

DISADVANTAGES

What is operational approach?

Systematic management of all processes to achieve world class performance by:

Efficient utilisation of tools

Optimisation of resources

Elimination of process wastes/inefficiencies

By following the above three conditions, there is a continuous improvement and standardization in a process.

CHARACTERISTICS:

Draws together concepts, principles, techniques and knowledge from other fields and managerial approaches.

The conceptual framework of management can be constructed on the basis of the analysis of management process and identification of management principles.

ADVANTAGES:

Increase in Productivity.

Improvement in Quality.

Potential savings.

Simplification of Tasks.

Operational Approach emphasises static conditions whereas the organizations have to function in dynamic conditions.

It claims universality or management principles while management differs from organization to organization and from level to level.

Quantitative techniques are thosestatistical and programming techniques,which help decision makers solve manyproblems, especially those concerningbusiness and industry

Quantitative techniques are thosetechniques that provide the decisionmakers with systematic and powerfulmeans of analysis, based on quantitativedata, for achieving predetermined goals

1) Statistical Techniques

2) Programming Techniques

It is a mathematical technique for optimum allocation of scarce or limited resources to several competing activities on the basis of given criterion of optimality, which can be either performance, ROI, cost, utility, time, distance etc.

Formulate the problem

Convert all inequalities to equations

Plot the graph of all inequalities

Find out the feasilble region

Find out the corner points

Substitute the objective function

Arrive at the solution

A special kind of optimization problem in which goods are transported from a set of sources to a set of destinations subject to the supply and demand constraints. The main objective is to

minimize the total cost of transportation.

A flow of customers from finite/infinite population towards the service facility forms a queue due to lack of capacity to serve them all at a time.

The decision making environment

Under certainity

Under uncertainity

Under risk

Laplace Criterion

Maxmin Criterion

Minmax Criterion

Maximax Criterion

Minmin Criterion

Hurwicz Criterion

Inventory is vital to the successful functioning of manufacturing and retailing organizations. They may be raw materials, work-in-progress, spare

parts/consumables and finished goods.

It involves developing a model of some real phenomenon and then performing experiments on the model evolved. It is descriptive in nature and not an optimizing model.

Definition of the problem

Construction of an appropriate model

Experimentation with the model

Evaluation of the results of simulation

A project is a series of activities directed to the accomplishment of a desired objective.

PERT

CPM

CONTINGENCY APPRAOACH

OF

MANAGEMENT

Contingency approach states that there is “no

one best way” to manage an organisation.

It is also known as situational approach.

“THE BEST WAY TO ORGANIZE DEPENDS ON

THE NATURE OF THE ENVIRONMENT TO

WHICH THE ORGANIZATION RELATES.” -

William Richard Scott

In 1970s, it is recognized as a key to effective

management.

CONTRIBUTORS:

L.W. Lorsch

Joan Woodward

Burns

George Stalker

Paul R.Lawrence

Joan Woodward (1916-1971)– “Management and Technology”, 1958,

”Industrial

Organization”, 1965

– Studied a large number of firms (100) in the

South Essex area

of England in the 1950s

– Found that organizational form varied, and

correlated with

production technology

– Concluded that there was not ”one best way”

to organize – the

nature of the production process would

determine which form

that would be most suitable.

Tom Burns (1913-2001) and G. M. Stalker

– “The Management of Innovation” (1961)

– Studied the introduction of electronics in Scottish

industry

– Described two ideal types of organization on each

side of a

continuum – the mechanistic and the organismic

(organic)

organization

– The organization as a result of the simultaneous

working of (at

least) three different social systems:

• Formal authority: aims, technology, relations with

the environment

• Cooperative systems of people with different

aspirations

•The political system – the competition and

cooperation for power

Paul R. Lawrence (1922-2011) and Jay W. Lorsch (1932 )

– “Organization and Environment: Managing Differentiation and Integration” (1967)

– Question: Why do people seek to build organizations?

Answer: In order to find better solutions to the environmental problems faced by

them.

– Therefore:

• It is people who have purposes, not organizations

• People come together to coordinate their different activities into an organization

structure

• The organization’s effectiveness is judged from the extent to which the members’

needs are satisfied

through the planned transactions with the environment

– In order to cope with the environment, organizations develop units and formal

structures

suited to the particular environment(s) they operate in.

What you do “depends” on the

“situation”.

-internal contingency factors

-external contingency factors

Internal Contingency Factors

Purpose

SizePeople

Technology

Structure

External Contingency Factors

Socio-cultural

Factors

Legal

/Political

Factors

Economic

Factors

Technological

Factors

General Environment of Coca Cola

Sociocultural

•Concerns about health

•Easier access to refrigeration

•Baby boomers drinking less

•Immigrants drink less

•Concerns about recycling

•Increased acceptance in China

and India

Government

•Increased health standards

for bottling

•Stricter liability legislation

Economic

•Slow economic growth

•Prospect of economic recovery

Technological

•New recycle friendly canning tech.

•New promotional opportunities

via the internet

•Threat of substitute drinks

Coca Cola

Instead of propagating universally applicable

organisation-management principles, this theory tries

to demonstrate that different circumstances require

different organisational structures

What works for one organisation may not work for

the other.

Managers need to understand the key contingencies

that effect the management practice for a given

situation.

EXAMPLE OF A SHOE MANUFACTURING COMPANY:

A shoe manufacturing company is faced with the problem of decreasing

profits;

Solution can be:

May establish a committee of sales and production personnel to

coordinate the production and distribution of goods under the assumption

that large inventories are responsible for the decline in profits

- (Systems theory)

By application of a contingency perspective:

Would enable to examine the situation and to determine the cause of

decreased profits before a new procedure or program is implemented.

Example of a super market manager:

Problem:

Customers Are complaining that queing lines and time for

billing are high.

Solution:

Manager identifies that,

1)The waiting times and queue lengths are always changing.

2)So a flexible approach is required.

Then he observes the customers and assings duty to the

workers according to the changing situation.

Studies show that companies that operate in less structured

environments are more successful with a flexible approach to

management, while companies in a more stable environment

do better with a more rigid and structured management style

of operations.

When the uncertainity of environment is high, an organic

structure(more flexible one) is suitable and when

uncertainity is low a mechanistic structure is suited.

Contingency theory is designed to provide the manager with the

capabilities to examine numerous possible solutions to a

problem.

Adapting to changing circumstances- No two situations are

absolutely identical, therefore each situation requires its own

unique solution.

To adopt this approach managers must sample all the past and

present ideas, some refer this to the ‘smorgasbord approach’.

The way you manage should change depending on the

circumstances.

Sometimes a bureaucratic organization is most effective,

sometimes a more loosely structured one; sometimes a

more classical approach is best, sometimes a more modern

one.

The most effective management style will vary depending

on the type of organization, its size, its environment, and

the particular situation/problem it faces at the time.

Limitations of Contingency Approach: Difficulty in determining all relevant contingency

factors and showing relationship between them may be

complex. It is totally practical approach without support of

theoretical and conceptual frame work. Sometimes manager finds difficulties in analyzing the

situation and discovering appropriate management technique in absence of proper research and lack of proper understanding of the situation.

Theory Z has been called a sociological description

of the humanistic organizations

“Theory Z is an approach to management based upon a combination of American and Japanese management philosophies”. Proponents of Theory Z suggest that it leads to improvements in organizational performance.

American Organisations

Short-term employment

Individual decision making

Individual responsibility

Rapid evaluation & promotion

Explicit control mechanisms

Specialized career paths

Japanese Organisations

Lifetime employment Collective decision

making Collective

responsibility Slow evaluation &

promotion Implicit control

mechanisms Non-specialized career

paths

LONG-TERM EMPLOYMENT

CONSENSUAL DECISION MAKING

INDIVIDUAL RESPONSIBILITY

SLOW EVALUATION AND PROMOTION

INFORMAL CONTROL WITH FORMALIZED

MEASURES

MODERATELY SPECIALIZED CAREER PATH

HOLISTIC CONCERN

Type Z organizations generally make life-long commitments to their employees and expect loyalty in return, but Type Z organizations set the conditions to encourage this. This promotes stability in the organization and job security among employees.

The type-z organisation emphasizes communication,collaboration,consensus in

Decision making

Type z organizations retain the emphasis on individual contributions that are characteristic of most american firms by recognizing individual achievements,albeit within the context of the wider group

The type z organisation,conversely adopts the model of slow evolution and promotion

The type z organization relies on informal methods of cotrol,but does measure performances through formal mechanisms. This is an attempt to combine elements of both the Type A and Type J organisations.

The type z organization is characterized by concern of employees that goes beyond the workplace.This philosophy is more consistent with the japanese model than the U.S model

IBM

Procter and Gamble

Hewlett and packard

Eastman kodak

TOTAL QUALITY MANAGEMENT(TQM) is the

integration of all functions and processes

within an organization to achieve

continuous improvement of the quality of

goods and services.

The goal is customer satisfaction.

Quality is defined as conformance to

requirements, not goodness.

The system for achieving quality is prevention,

not appraisal.

The performance standard is zero defects, not

“That’s close enough”.

The measurement of quality is price of non

conformance, not indexes.

Different people interpret quality differently. Few can

define quality in measurable items that can be proved

operationalized. When asked what differentiates their

products of service

The banker will answer “Service”.

The health care worker will answer “Quality health

care”.

The hotel employee will answer “Customer

satisfaction”.

According to Phil Crosby, Quality is…..

An attitude:- zero defects- continuous improvement.

A measurement:- price of Conformance, plus- price of Non Conformance (defects)

A belief in employees ability to solve

problems.

A belief that people doing the work are

best able to improve it.

A belief that everyone is responsible for

quality.

- 22,000 checks will be deducted from the

wrong bank accounts in the next 60

minutes.

- 20,000 incorrect drug prescriptions will

be written in the next 12 months.

- 12 babies will be given to the wrong

parents each day.

Visible, committed and knowledgeable.

A Missionary zeal.

Aggressive Targets.

Strong Drivers.

Communication of values.

Customers Contact.

• Systems viewpoint

• Dynamic process of interaction

• Multilevelled and multidimensional

• Multimotivated

• Probabilistic

• Multidisciplinary

• Descriptive

• Multivariable

• Adaptive

• Management is influenced by Internal and external

environment.

• Appropriate techniques are determined by situation and

Environmental factors of an organization.

• Thus the conclusion is that there cannot be any fixed

universal principles of management and organizations.

• The ancient approaches to management namely the

scientific approach and the human relations thought can be

described as the sources of the modern day management

thought.

While the scientific management theory focus on the efficiency of the

production process and the motivation of the worker, the human

relations thought emphasizes on the importance of behavioral

elements in employee satisfaction and consequently the levels of

satisfaction.

The combination of these two traditional models therefore covers the

most important aspects of management albeit in a retracted form.

The modern approaches to management tend to build onto these

provisions by providing meaningful insights that enable management

practices to be relevant and more effective in the modern day.

The conveyor belt production which is still common can also be

traced to the scientific model.

It therefore must be concluded that modern approaches to

management reinforce rather than repudiate the traditional

approaches to management.

THANK YOU