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Modern Management Theory: Quantitative, System and Contingency Approaches to Management!Throughout history, there have been managers. Well, the reality is that way back in the day they were called 'leaders' or 'adventurers,' but as time went on the term 'manager' began to take hold. No one would ever think Christopher Columbus 'managed' his way to the Americas or that George Washington 'managed' the U.S. army. In many cases, these guys knew what they wanted to do or knew what they had to do and did it. Even today, we typically do not talk about managers per say but rather leaders. 'Manager' has become more of an adjective than a noun, describing what someone does or their role. 'Bill manages the department'; 'she's a great manager'; 'he managed the team very well', etc.What we have to understand is that a leader does indeed manage what they are responsible for. And, over time, there have been multiple theories of management that have evolved and that these leaders use as a guiding force behind their management or leadership philosophy. The three most recognized management theories are:The Quantitative Approach: This approach is centered on statistics and mathematical techniques - sounds like a boatload of fun if you ask me.The Systems Approach: As one could probably guess, this approach focuses on systems that, when put together, make a whole unit, kind of like a jigsaw puzzle.The Contingency Approach: This approach believes there is no one system or approach to managing an organization. These guys believe you take it as it comes but plan to deal with issues if they pop up. Anyone who has ever had a baby knows moms and dads have?contingency plans?all over the place just in case junior gets sick, is hungry or needs a nap.So in this lesson let's take a look at these different theories and how they shape how leaders (okay, managers) manage these areas or companies they are responsible for. It's important to understand, though, that in one company, all these different approaches can be used. There's not one that is better than another, just different, and sometimes they have to be blended together for a company or organization to run.Quantitative ApproachOkay, get out your slide rules and calculators, because that is what this approach uses as its guiding principles. You see, the?quantitative approach?is solely reliant on statistics and data. The big word we are looking for here is?quantitative, which means the measurement of quantity or amount. So a bunch of really smart people get together and they crunch and crunch data to decide how a business should run or be managed. Scientists use this approach a great deal and, in many cases, so do accountants and finance people, mainly because their world revolves around data. It is not glamorous or creative. Heck, it could even be said it isn't fun, but someone has to do it, and each part of a company or organization needs people to use this approach.Think about if you had a manufacturing company that made flying monkeys. Well, someone has to statistically look at the data to make sure the monkeys are flying as far as they should and monitor if you are producing any defective monkeys (and no one wants a defective monkey). This data, once it's gathered, is presented to the company for review and action if needed.The contributions of mathematicians in the field of management are significant. This has contributed impressively in developing orderly thinking amongst managers. It has given exactness to the management discipline. Its contributions and usefulness could hardly be over-emphasized. However, it can only be treated as a tool in managerial practiceLimitations:There is no doubt that this approach helps in defining and solving complex problems resulting in orderly thinking. But the critics of this approach regard it as too narrow since it is concerned merely with the development of mathematical models and solutions for certain managerial problems.This approach suffers from the following drawbacks:It doesn’t take into consideration the human element, which is an important part to management. (Can our employees do it, how will they respond to the new quantity demands….)In reality management decisions needs to be made quickly and without full information. Decision making (controlling) is only one part of managerial activities, there are other elements, like planning, organizing, and leading Sometimes, the information available in the business for developing mathematical models are not up-to date and may lead to wrong decision-making.Systems ApproachNow let's talk a little about the systems approach. When I was younger, I used to play with Legos - those little building blocks that I could make a house or car out of (okay, I thought it looked like a house or a car, but it probably looked more like a squid that was in a train wreck). In many ways, the?systems approach to management?is very much like Legos. The?systems approach?takes the viewpoint that a company is really an interconnected group of systems that all work together (or should work together). The best way to view this system is by thinking of a company as a machine. You have:Inputs: Material, information or data that goes into the machineProcesses: Work that is done to the material, information or data while it's in the machineOutputs: The final product that comes out of the machineOkay, so in this system, managers see the company as one big machine that has to work together to take inputs and make them outputs. As an example, let's look at a toaster. The systems approach to management believes you put in bread, turn on the toaster and, when the process is done, toast comes out, hopefully not burned too much. Their job or belief is to work with each part of the system to make sure the end result is what is needed - what went in, what happened while it was in there and what it looked like when it came out.To compare this to the quantitative approach, a manager that follows that approach would only want to know data about how long the bread was in the toaster and the level of, well, toasting that happened when it came out.So we can begin to see how, in some companies, we have a blending of approaches to managing the work or organization. One wants to keep and track data to see how the company is functioning, and in many cases, that data can be presented to the manager that follows the systems approach to make changes needed if things are not running right in the process.The basic features of systems approach are as?under:A system consists of interacting elements. It is set of inter related and interdependent parts arranged in a manner that produces a unified whole.The various sub-systems should be studied in their inter- relationships rather, than in isolation from each other.An organisational system has a boundary that determines which parts are internal and which are external.A system does not exist in a vaccum. It receives information, material and energy from other systems as inputs. These inputs undergo a transformation process within the system and leave the system as output to other systems.An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to change in its environment.This approach suffers from the following drawbacks:It doesn’t recognize the different part of an organization might have different goals and targets that at times may conflict with one anotherDecision making process will take a really long time if communication and agreement has to occur cross all parts of the organization. Contingency ApproachAll this planning and thought is great, but you know what, stuff happens - systems break down, parts are not correct, people call in sick and buildings slide into the ocean. Thus, it is the?contingency approach to management that takes this viewpoint into account by believing there is no one set way to manage a company. In a nutshell, these are the people that believe the car will run, and we'll get to the destination, but we'll always have a spare tire, lug wrench and cell phone in case what is supposed to happen (the car getting to where it is supposed to go) does not happen.Features of Contingency Approach:Firstly, the contingency approach does not accept the universality of management theory. It stresses that there is no one best way of doing things. Management is situation, and managers should explain objectives, design organisations and prepare strategies, policies and plans according to prevailing circumstances. Secondly, managerial policies and practices to be effective, must adjust to changes in environment.Thirdly, it should improve diagnostic skills so as to anticipate and ready for environmental changes. Fourthly, managers should have sufficient human relations skill to accommodate and stabilise change.Finally, it should apply the contingency model in designing the organization, developing its information and communication system, following proper leadership styles and preparing suitable objectives, policies, strategies, programmes and practices. Thus, contingency approach looks to hold a great deal of promise for the future development of management theory and practice.Evaluation:This approach takes a realistic view in management and organisation. It discards the universal validity of principles. Executives are advised to be situation oriented and not stereo-typed. So executives become innovative and creative.On the other hands, this approach does not have theoretical base. An executive is expected to know all the alternative courses of action before taking action in a situation which is not always feasible.Modern Management Theory: Quantitative, System and Contingency Approaches to Management!Quantitative Approach to Management Definition:Advantages:Disadvantages: System Approach to Management Definition:Advantages:Disadvantages: Contingency Approaches to ManagementDefinition:Advantages:Disadvantages: ................
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