WEEK 2 - MBA

CHARACTERISTICS OF QUALITY MANAGERS

Who is said to be a Quality manager and what does a quality manager do?
Quality managers are those who continuously strive for success and ultimately achieve it.
Quality managers are responsible for monitoring and evaluating the performance of
employees at their work, examining products to determine their quality, and engaging
with customers, and offering feedback on employee’s achievement, among other duties
they perform.

These are the 10 characteristics of quality managers.

1st is. Professional Competence

Professional competence refers to having thorough knowledge and skills of the field
concerned and also having ability to perform effectively within the manager‟s professional
role. Managers must be effective enough and remain aware of their professional strengths and
weaknesses and respond accordingly despite of short falls whenever it arises. In the case
of management, professional competence involves, being well-versed in management
principles and how these principles can be applied in the given situations.

2nd is. Belief in High Achievement

Quality managers have belief in high achievement. They have internal locus of control
implying that they feel that they can control situations and the situations cannot control them.
They have a feeling that if others can do something exceptional, they can also do the same
way. This belief instils confidence in them for doing better and better.

Impactful quality managers always believe they can do any task perfectly, control any
situation regardless its severity, improve their organizations, their teams and
themselves. In short, they have a high sense of achievement.

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3rd is. Creativity
Creativity involves conceiving of original and unique alternatives to the solution of a
problem. Creativity is required because nature of problems goes on changing which requires
innovative solutions.

Why should a manager be creative? A manager need to be creative because,

Creative leadership drives productivity and fosters success in a company. Creativity is one of
the most important qualities of a modern business leader. Creative leaders have the ability to
look at things in new ways and solve problems by seeing things others don't.

4th is. Analytical Skills

Analytical skills in management are often defined as the ability to break problems into
parts to see relationships or interdependencies. Managers with analytical abilities plan
well and lead projects successfully. They are able to accurately forecast financial results and
develop plans to meet goals and objectives.

Managers have to work in complex situations which contain both significant and insignificant
factors. With analytical skills, quality managers may be able to identify those factors which
are more relevant for their work.

5th is. Decisive

Quality managers are quite decisive. They make decisions after careful analysis of the
supporting variables well in time, which help them in not to waver between „what to do„ or
„what not to do„ in given situations.
In the workplace, decisiveness is key to effectively executing plans and achieving goals. It
is important to balance the costs of continuing to deliberate, gather information, and delay a
decision versus the costs of making a poor choice. Most importantly, decisive leaders make
decisions that are clear and final.

6th is. Excellent Communication Skills

Communication involves sharing of ideas and understanding with others. In order to
understand others and making himself or herself understood by others, excellent

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communication skills are required. Further, persuasive communication may influence others
favorably.
It is important for every employee in an organization to have effective communication skills.
This is especially required for managers as they have to deal with additional responsibilities
or duties in improving employee productivity, teamwork, morale, and performance.

Through effective communication skills, it is eventually important for managers to offer

feedback to employees, to maintain good relationships with other departments, to help
resolving conflict, to manage performances at all levels of management, and help managers
in building teams. If an aspiring or experienced manager wants to remain on the top of his/her
game, then it is important to master written communication, verbal, and nonverbal skills.

Remember that, any interaction a manager has with an employee, can be considered as an
opportunity to create a positive impact on both professional and personal fronts.

7th is. Leading from the Front

We often hear that leaders should set a good example and lead from the front, but in more
recent times we have also heard that good leadership can also mean leading from behind.

In fact, it was one of Nelson Mandela‟s mantras: “Lead from the back - and let others believe
they are in front”

Quality managers lead from the front. They do not speak about themselves but their work
speaks on their behalf. This feature leads the followers to follow the leaders enthusiastically.

8th is. Openness

People appreciate and will react more positively when they feel they can trust their
leader, communicate in an open way, and not fear saying the wrong thing. A strong
leader is one that people feel comfortable interacting with, knowing they will get an
honest answer. The humanistic leader is sociable, easy to talk, and relatable.

Quality managers have quality of openness. They are change-prone and not change-resistant.
Being open, they appreciate any idea which is fruitful and accept it from whatever source it
comes.

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9th is. High Integrity
Having a high degree of integrity at work means that: You are trustworthy and reliable. A
manager will practise and encourage open and honest communication. He/she is responsible
for their own actions.
Quality managers have high integrity and adopt ethical practices in all types of decisions and
dealings. Similarly, they expect the same pattern to be followed by others.

Finally the 10th characteristic is. Team-based Approach

Quality managers adopt team-based approach. For work performance, they adopt „give and
take„ approach. They believe in developing themselves as well as others.

Overview on Development of Management Thought or Theories

Even though we know that Management thought has a long history. It is as old as human
civilization itself. Management in one form or the other has been a significant feature of
economic life of mankind throughout ages. Management thought is an evolutionary concept.
It has develop along with and in line with the growth of social, political, economic and
scientific institutions. Management thought has its origin in the ancient times. It developed
gradually along with other socioeconomic developments. The contributor„s to management
thought are many. They include Management philosophers, management practitioners and
scholars. Modern management is developed based on the solid foundations laid down by
management thinkers from the early historical period.

HISTORICAL BACKGROUND OF MANAGEMENT

The recorded use of organised management dates back to 5000 B.C. when the agricultural
revolution had taken place. These agricultural civilizations existed in India, China and Egypt.
According to Peter Drucker these irrigation civilizations "were not only one of the great ages
of technology, but it represented also mankind„s most productive age of social and political
innovation". As the villages grew and civilizations evolved, the managers too grew and
evolved. They became the priests, the kings, the ministers holding power and wealth in the
society. Written documents found in the Sumerian civilization which flourished some 5000
years ago, contains evidence of management control practices.
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As early as 4000 B.C., the Egyptians were aware of the importance of planning, organising
and controlling. The huge pyramids of Egypt stand a mute testimony to the managerial and
organizational abilities of the ancient Egyptian civilization. One pyramid required 1,00,000
men working for 20 years, covering 13 acres, using 2.3 million blocks, each weighing an
average of 2.5 tons. To produce such a monument required proper planning, work allocation,
organising, directing, controlling and decision making.

In the Grecian civilization we find the origin of the Scientific Method in the famous Socratic
discourses. The Romans who built a vast empire extending from Britain in the west to Syria
in the east ruled it for many years only because of their superior and advanced managerial
abilities.

In ancient India Kautilya wrote his Arthashastra in about 321 B.C. the major theme of which
was 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., Buddha's order
and the Sangha in 530 B. C., provide evidence about the use of the principles of management.
During the 13th and 14th centuries AD the large trading houses of Italy needed a means of
keeping records of their business transactions. To satisfy their needs Luca Pacioli published a
treatise in 1494 describing the Double Entry System of Book-keeping for the first time.

Management thought is an evolutionary concept. New theories and principles were suggested
along with new developments in the business field. The new thoughts supplemented the
existing thoughts and theories. This is how developments are taking place continuously with
regard to management thoughts/theories. Management thinkers and thinkers from other fields
such as economics, psychology, sociology and mathematics have also made their contribution
in the evolution of management thought.

Overview on Evolution of management thoughts/theories:

From this module we are going to learn, how the management theories have been evolved
over the period of time with a combination of experiences and experiments. Also help us in
identifying various thoughts and approaches in management and their applicability in the
present context.

There are 5 approaches to management theory. This evolution of management thought

can be studied in the following broad stages:
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The very 1st Approach is The Classical Organizational Theory of Management or school.
It includes the following three streams of thought which is divided into Scientific
management school, Administrative management school, and Bureaucratic management
school.

2nd Approach is The Neo-classical theory of Management: It includes the following two
streams of thought which is divided into: (i) Human Relations Approach (ii) Behavioral
Sciences Approach which deals with Human behaviour.

And the next 3rd 4th, & 5th Approach falls under The Modern Theory of Management: It
includes the following three streams of thought which is divided into:

(i) Management science Approach that deals with Mathematical techniques

(ii) Systems Approach to Management that deals with Organisation system and

(iii) Contingency Approach to Management that deals with Situational approach.

It is rather difficult to state the exact period of each stage in the evolution of
management thought. Experts, in general, agree with the following period for each
thought/school. a. Classical School/thought that was started during the early 19th century
between: 1900 to 1930. b. Neo-classical School/thought was started during: 1930 to 1960. c.
Modern School/thought began in the late 20th Century: i.e., 1960 onwards. The development
of management thought is the result of contributions made by pioneering management
thinkers and experts from other social sciences such as economics and psychology, sociology
and mathematics have also made their contributions in the evolution of management thought.

As you have seen the term called school here, what does it mean?

School here it means, when different people with same set of thoughts and ideas get together
in giving solution to a problem is called as school or When various eminent researchers with
similar set of thoughts and ideas gathered together in identifying solution to a problem is said
as school.

Let’s see each approach in detail.

The 1st Approach is Classical Organisational theory.

Classical Organisational management theory is based on the belief that workers only have
physical and economic needs and prescribes specialization of labor. Classical theories
recommend centralized leadership and decision-making and focus on profit maximization.
Three streams of classical management theory divided into three management school.

 Scientific Management,

 Administrative Management and

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  Bureaucratic management

Let’s understand what scientific management is all about?

The concept of scientific management was introduced by F.W. Taylor. F.W. Taylor is also
called as Fredrick Winslow Taylor. F.W. Taylor is the father of scientific management.

The main focus of the scientific management theory is to minimise wastes and also use
scientific management methods or principles to improve the efficiency of the production
process.

Taylor states that, in order to minimise wastes and also to increase efficiency in the
production process, you need to adopt 4 principles.

What are those 4 principles are ?

The 1st principle is, to study the way the job is performed. It is about the development of
'One best way" of doing a job.

He states that, in order to perform a job at workplace, there are many methods of doing
things. Out of many methods, there is only one effective method to perform a job with less
movements and operations. So, That one method has to be identified.

2nd principle is to convert the identified new method in to rules. The method what you
have identified it has to be break down into rules so that it can be followed by all the
employees in the organisation without fail.

3rd principle is relating to recruitment of employees.

F.W.Taylor emphasized on selecting or hiring the people who meet the skill sets required for
doing the job effectively. Even after hiring, if employees they do not meet the skill sets
required, you have to help them to Teach, train, and help develop the workman with
improved methods of doing work.

4th principle is regarding of wages.

Taylor has given a concept of paying the employees according to their performance. Higher
the performance higher will be the salary. It says that, any employee who performs very well
they should be given with higher rewards, and those who do not perform well, will result in
lower rewards.

So these are the scientific management 4 principles which help in increasing efficiency by
minimising wastage in the production process.

Contribution of Henry Fayol to Management Thought

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Henry Fayol (1841-1925) is rightly treated as the father of modern theory of general and
industrial management. The credit of suggesting the basic principles of management in an
orderly manner goes to Henry Fayol. After obtaining an engineering degree, Henry Fayol,
joined as chief executive in a coal mining company. He developed his management principles
and general management theory and published them in the form of a book (in French) titled
"General and Industrial Administration" in 1916. It was translated into English in 1930. In
due course of time, Henry Fayol came to be recognised as the founder of modern
management theory. His analysis of management process acts as the foundation of the whole
management theory and the present super-structure of management has been built on it.

Henry Fayol suggested important qualities of managers and stressed the need for raising such
qualities. He developed fourteen principles of management out of his practical experience.
These principles are universal in character and are applicable to all types of organisations.
Each principle suggested by him has specific meaning and significance.

According to him, managers in all organisations need to follow these principles/guidelines

while managing the affairs of their business units. The management principles suggested by
him in 1916 are universally accepted by modern authorities on management and are treated as
valid even to this day. This is because these principles are practical in nature and also result-
oriented. In fact, these principles are the outcome of his long experience as a practicing
manager. These basic principles are useful for effective management of business activities.
They are related to the basic components of management process such as planning,
organizing, staffing, leading, coordinating and controlling. He incorporated these principles
in the management theory suggested by him. The principles of management suggested by him
are useful not only in business/industrial enterprises but also in other organisations such as
colleges, hospitals, charitable institutions and government departments. Due to his
contribution to management theory and principles, Henry Fayol is rightly treated as the
Father of Modern Management Thought. Fayol is the first management thinker who provided
the conceptual framework of the functions of management in his book ―General and
Industrial Management.

The functions of management according to Fayol are, 1. Planning 2. Organising 3. Staffing 4.

Commanding 5. Coordinating 6. Controlling

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 The fourteen principles of management suggested by him are related to these basic
functions of management process and are universally accepted. Fayol has given adequate
details of every principle suggested by him. He also made them easily acceptable by others.
According to Henry Fayol, managers should be flexible in the application of these principles.

Fayol divided general and industrial management into following six groups:-

a. Technical activities (production, manufacture, adaptation).

b. Commercial activities (buying, selling and exchange).

c. Financial activities (search for and optimum use of capital).

d. Security activities (protection of property and persons).

e. Accounting activities (stock taking, balance sheet, cost, and statistics).

f. Managerial activities (planning, organising, command, coordination and control).

This concept of Administrative management was given by Henri Fayol. Henri fayol is called
the father of management. He has given 14 principles to improve the efficiency and
effectiveness of the organisation.

If you see the scientific management principles, it mainly emphasizes on minimising wastes
and improving productivity by using scientific methods or principles to perform a job. But
Administrative management emphasizes on following the 14 principles to all aspects of the
management for smooth functioning of an organisation.

1st principle is Division of labour – this principle states that one person cannot do all the
work. So the job should be break down into variety of tasks and divided among the
employees according to their skills and knowledge. It says that, employees have to divided
based on their specialisation in terms of skills and knowledge such as HR, Marketing,
Finance, Production & Operations, R&D etc.

2nd principle is Authority & Responsibility – this principle states that in order to get the best
out of a person from his or her job, authority should always be linked with responsibility.

Authority means it is the right to give orders. Responsibility is being obliged on whatever is
the result of the activity.

It is said that when you are giving authority or power to someone during your absence, it
should be linked with responsibility so that he or she is held responsible for the positive or
negative results of the particular activity.

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3rd principle is Unity of command – this principle states that there should be only one boss
for a person. A person should receive orders from only one person. It means a head of the
dept can give instructions or commands to the fellow employees under the wing.

4th principles is Line of authority – this principle states that in any organisation there should
be clear indication of line of authority i.e., who is responsible to whom.

For eg, the hierarchy or line of authority of an organisation is CEO – BOD – Managing
Directors – Assistant Managers – Supervisors – Staff or labours. This should give a clear idea
on who has to report to whom in case of any problem is encountered at any level of
organisation. If staff finds any difficulty there should report to supervisors, if it is not solved
by supervisor, staff has to approach through proper channel until it gets resolved.

5th principle is Centralisation – this principle states that all the decision making authority
should be only with the top management. If any organisation is adopting centralised system,
then all the employees in the organisation has to listen to one man authority, because it is
centralised.

6th principle is Unity of Direction – this principle states that there should be only one goal
for the organisation towards which the employee have to work. It means there should be only
one vision for the org.

7th principle is Equity – this means all the employees in the organisation should be treated
equality in terms of employment, pay & treatment inside the org. there shouldn‟t be any bias
irrespective of caste, creed, race, ethnicity, gender, age or any sort of diversity. There should
not be personal factors should be looked into in favouring someone. Everything should be
transparent to all the employees in the org.

8th principle is Order – this means that all the equipments and tools should be place in a
particular order so that it can be easily found by others when they come to work with the
same equipments and tools.

9th principle is Initiative – this means that the organisation must try to encourage new
thoughts and give importance to creativity. When someone is initiating to trying something,
organisations has to welcome the food for thought.

10th principle is Discipline – this principle means that all the employees should follow the
rules and regulations which is laid down by the organisation. There shouldn‟t be any
violation in terms of code of conduct, dress code, entry and exit of employees. They need to
possess ethical behaviour in the organisation premises.

11th principle is Remuneration of personnel – the principle states that payment or wages of
employee should be in such a way that encourages the employees, so that the employee will
contribute to the success of the organisation.

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12th principle is Stability of tenure – this principle states that the employees performance
should be evaluated in course of time. It says, in order to prove the performance at
workplace, employees need to be given sufficient time to prove his or her efficiency.

13th principle is General Interest over Individual Interest - this principle states that every
individual working in the org should work for the org interest or goal rather than individual
interest. All the employees should work for the common interest of the organisation such as
vision and mission.

14th principles is Espirit de corps – this is a French term which denotes that all the employee
should be devoted, dedicated, staying loyal, raising voice for the betterment, show team spirit
towards the org.

Bureaucratic management
• The bureaucratic management theory was developed by Max Weber. Bureaucratic
management Seeks to create an organization that leads to both efficiency and
effectiveness.

 Max weber emphasized more on 4 principles as shown in the figure

1st Written rules

2nd Hierarchy of authority

3rd Fair Evaluation and reward and

4th System of task relationship

The principles of bureaucracy are as follows:

1st principle is Written rules: This principle states that, all the operations of the organisation
should be in such a way that it should be converted into rules and should be in a written
format. All the day to day activities have to be made as rules and should be communicated to
all the employees in the organisation, so that it should be followed at all the levels of
management in an organisation.

2nd principle is Hierarchy of authority: this principle emphasizes on organisation having

clear indication of line of authority, i.e., who is responsible to whom

For eg, the hierarchy or line of authority of an organisation is CEO – BOD – Managing
Directors – Assistant Managers – Supervisors – Staff or labours. This should give a clear idea
on who has to report to whom in case of any problem is encountered at any level of

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organisation. If staff finds any difficulty there should report to supervisors, if it is not solved
by supervisor, staff has to approach through proper channel until it gets resolved.

3rd principle is Fair evaluation and reward – this principle states that the performance
evaluation needs to be fair in terms of employment, pay & treatment inside the org and it
should be directly linked with the reward he or she gets. It means, there shouldn‟t be any bias
irrespective of caste, creed, race, ethnicity, gender, age or any sort of diverse in nature. There
should be transparency at all levels of management in the org.

4th principle is system of task relationship – this principle states that all the tasks in the
organisation should be in the way that they are interrelated to each other. To put it in simple
terms, each and every task in the organisation is to be interconnected with the other task and
that results up in higher productivity levels.

The second approach is Neo-classical Approach that deals with Human

Relations Movement.
Though the scientific management movement recognized the human side of management, the
human relations movement focused directly on the importance of human beings at work. It
was based on the belief that work efficiency can improve if human relations are effective.

Elton Mayo, associate professor at Harvard University conducted a series of experiments

along with his associates on the Hawthorne plant of the Western Electric Company (in 1933).
The studies passed through four phases – the illumination experiments, the relay assembly
test room experiments, the interviewing program, and the bank wiring room study.

Let’s discuss each phase in detail.

The 1st phase is Illumination experiments: These studies were based on the hypothesis that
illumination increases productivity. However the results of the study were erratic. It was
found that in the experimental group which was exposed to different levels of illumination,
productivity did improve with an increase in illumination. But the control group, where
illumination level was kept constant also showed an increase in productivity in the post test
conditions. There were other factors that were influencing the worker‟s productivity.

The 2nd phase is Relay assembly test room: in the second phase of the experiments a small
group of employees were separated from the actual work place and placed in a separate room
where a number of variables were altered – rest pauses of varying length were introduced,
wages were increased, the work day and researchers acted as their supervisors. The group
was allowed to make small decisions like choosing rest periods. In this phase of study, the
findings were again arratic. Productivity had no relationship with working conditions. The
improvements stabilized after some time and remained at that level even when the working
conditions were altered back to the poor pre-test conditions.

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Mayo and his associates explained these findings by suggesting that the improvements had
occurred not because of the changes in the working conditions but because the group had
been singled out and received special attention; this became a motivating factor for the group
to improve their productivity. Sympathetic supervision further accentuated their motivation.
They suggested that productivity could be improved if management showed concern for their
employees and supervisors paid special attention to them. This phenomenon is known as the
Hawthorne effect. The study also suggested that warm informal small group with good
interpersonal relationship also improved productivity.

The 3rd phase is Interviewing programme: during the third phase of the study,
approximately 20,000 employees were interviewed about supervision and the work
environment. However, the answers were guarded. Hence a non-directive approach was
adopted wherein the employees was allowed to choose his or her own topic. The interviews
showed that a person‟s work performance was determined not only by the individual
personally, but by the group members as well.

The 4th phase is Bank Wiring room: the researchers decided to study a small group at work.
They studied a group of employees who were wiring and soldering bank terminals. The study
showed that the employees behaviour were governed by certain group norms. The norms
were related to the amount of work they should do, the way one should treat the manager.
Social ostracism, ridicule and name calling were used by the group to enforce group norms.

The Hawthorne studies had a major impact on the understanding of employee-employer

relationships. They gave important insights into individual and group behaviour. These
studies laid the foundation for a behavioural approach to management.

From the experiment it was concluded that the interpersonal relationship among the workers
has greater impact on the work related behaviour of the workers.

For eg: If a worker who was working for a long time in one dept who is made to shift to
another dept, tend to show poor performance because of the social binding he has with the
older department employees. He feels alien to new department and he tends to show
performance.

Behavioural approach: The main contributor of this approach is Elton

Mayo.
This approach is mainly concerned with the behaviour or actions of people at work. It also
explains the effect of interpersonal relationship on production. It lead to the new field of
study i.e., organisational behaviour. Organisational behaviour attempts to determine the
causes of human behaviour and translate the results into effective management techniques.

The behavioural sciences approach gives emphasis on increasing productivity through

motivation and leadership. The central core of this approach lies in the following aspects of
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 human behaviour: motivation, leadership, communication, participative management and
group dynamics. The behavioural sciences have provided managers with a systematic
understanding of one of the most critical factors in the process of management-the human
element. Insights evolving from that understanding have been used to design work situations
that encourage increased productivity. It has enabled organisations to formulate programmes
to more efficiently train workers and managers, and it has effects in numerous other areas of
practical significance.

The main contribution of the behavioural approach is that it clarifies to managers that people
hold the key to productivity when employees are guided (leadership) and motivated in an
effective way. Work methods, skilled and committed individuals create a successful
organisation.

Let’s discuss on 3rd, 4th , & 5th Approach falls under The Modern Theory of Management:
It includes the following three streams of thought:

(i) Management science Approach that deals with Mathematical techniques

(ii) Systems Approach to Management that deals with Organisation system and

(iii) Contingency Approach to Management that deals with Situational approach.

Definition
According to Lancaster University, management science can be defined as a concept that is
“concerned with developing and applying models and concepts that help to illuminate issues
and solve managerial problems”. The approach is essentially interested in looking at an
organization and finding ways it can manage itself better and improve its productivity.

The core aim of the approach is to use scientific concepts and methods in order to solve
management-related issues. It does this by focusing on analyzing different management
approaches, comparing them with existing possibilities and offering possible outcomes of
which the organization can pick to improve productivity.

While management science is mainly a mathematical approach to solving problems, the

application of it requires the examination of different fields. Management science uses
analytical data, statistics and methods for increasing efficiency of management systems and it
finds the tools from fields like:

 Economics

 Business Administration

 Psychology

 Sociology

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 Mathematics

The key to management science is the visualization of management as a logical action. Since
the approach views management through this lens, it means the process can be quantified and
described with the help of symbols, measurements and relationships. The approach basis its
theory on the decision theory approach and rational decision-making models and it can
provide organizations with a model that helps identify goals and the roadmap for achieving
them.

Management Science Approach that deals with Mathematical techniques

• This approach is also called „Mathematical‟, „Operations Research‟ or „Management Science‟
approach. The basic feature of the quantitative management thought is the use of mixed teams
of scientists from several disciplines.

• During the Second World War, during 1940‟s there was an urgent need to develop the
productivity at a faster rate. This led to the use of mathematical and statistical techniques for
modelling, analysis and solution of management problems soon came to be known as
Management Science. This school of approach used scientific tools for providing a
quantitative base for managerial decisions. The techniques commonly used for managerial
decision-making include Quantitative management, Operations management, Total quality
management (TQM), Management Information Systems (MIS).

This approach uses rigorous quantitative techniques to maximize resources. Quantitative

techniques such as

• Quantitative management: which utilizes linear programming, modeling, simulation systems.

• Operations management: includes techniques to analyze all aspects of the production system.

• Total Quality Management (TQM): focuses on improved quality.

• Management Information Systems (MIS): provides information about the organization.

This technique was particularly used for planning and controlling. These methods are used to
manage the process of transforming materials, labour and capital into useful goods or services.

The last Approach is Contemporary Approaches i.e., Systems Approach and

Contingency Approach

Let’s look into Systems Approach or theory: A system is a set of Inter-related elements or
parts which puts together and functions as a whole. The organisation is said to be a sub-
system composed of 4 interdependent parts such as task, structure, people, and technology.

An organisation as a system has the following characteristics:

1. A system is goal-oriented.

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2. A system consists of several sub-systems which are interdependent and inter-related.

3. A system is engaged in processing or transformation of inputs into outputs.

4. An organisation is an open and dynamic system. It has continuous interface with the
external environment as it gets inputs from the environment and also supplies its output to the
environment. It is sensitive to its environment such as government policies, competition in
the market, technological advancement, tastes of people, etc.

5. A system has a boundary which separates it from other systems.

Organisations should have positive synergy always. Because Synergy implies that all
the departments in the organisation which interacts cooperatively are more productive than
they would be if operated in isolation.

An organisation is considered as an open system because it interacts with its environment

whereas a closed system does not. Though all organisations interact with the environment,
but the extent to which they do so varies.

For example: An advertisement agency is far more open system than the Jail.

An organisations is considered to be an open system consisting of Input, Transformational

process, Output and Feedback.

The various Input is Human, raw materials, technology, information, and money

Transformational process involves planning of how to use the resources (such as machines,
and human skills), and the way in which people are being motivated.

The Output is Products or Services which is produced from the organisation and given back
to the society.

Feedback is the customer satisfaction or customer usage of the product.

So each and every dept, process, projects can be considered to be a system.

For eg. If you take HR Department as a system, here Input is considered as People, Process
as HRP, Recruitment, Selection, Placement, Orientation, T&D, Motivation, Communication,
Direction and Controlling. Output as the performance of each individuals and finally
Feedback here is given by the Supervisor based on the employees goals attainment.

In the same way this method could be applied to each and every process in an organisation.

The latest approach to management which integrates the various approaches to

management is known as ‘contingency’ or ‘situational’ approach

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The contingency theory stresses that there is no one best style of leadership which will suit
every situation. The effectiveness of a particular leadership style will vary from situation to
situation. For instance, participative leadership may be more effective in an organisation
employing professional personnel in a high technology operation in an atmosphere of
nonmaterialistic orientation and free expression. On the other hand, authoritarian leadership
would be more effective in an organisation which employs unskilled personnel on routine
tasks in social values oriented towards materialism and obedience to authority.

Contingency approach guides the managers to be adaptive to environmental changes. In other

words, the managers should develop situational sensitivity and practical selectivity, because
rather situation only decides which management practice/process/policies to be followed to
achieve the organisational goals.

Contingency approach suggests the managers to overlook (condone) environmental

possibilities (contingencies) while choosing their style and techniques.

Contingency approach is an improvement over systems approach. It not only examines the
relationships of sub-systems of the organisation, but also the relationship between the
organisation and its environment.

To conclude, all these 5 approaches of management theories help contribute in designing or

framing the organisation structure.

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