Chapter one: Mgmt overview - It is concerned with determining the

 F.W.Taylor Mgmt is the art of knowing what objectives of an organization and the
you want to do and doing means of achieving them.
it in the best and cheapest way. - It is a function that determine in advance
 Stanly Mgmt is the process of i. What should be done?
decision making and control over the ii. How it should be done.
action of human being for purpose of iii. When it is to be done.
attaining the predetermined goals.  Planning requires ability to foresee,
H. Fayol visualize, and to look ahead purposefully.
 Mgmt is a process of planning, organizing,  Plans can be classified as
commanding, coordinating,  Long range
and controlling.  Intermediate range
Boone and Kurtz  Short range
 Mgmt is the use of people and 2. Organizing
other resources to accomplish It is the function in which the managers
organizational objectives. develop the organization structure that allows
Characteristics of mgmt working together and achieve organizational
goals.
 It is goal oriented
It involves grouping similar activities in one
 It is a group activity
department.
 It is a social process
It also involves clearly stating authority and
 It is a dynamic function
responsibility.
 It is a system of authority
3. Staffing
 It is intangible
-It deals with filling the position in the
 It is a profession
organizational structure.
Significance of mgmt
-It involves
 It helps to identify companies goals or
 Transferring employees
objectives.
 Promotion
 It facilitate accomplishment of goals
 Lay off
by planning
 Recruiting and selecting
resources and by directing and
4. leading/directing
controlling activities.
-It is the process of influencing, motivating,
 It establish sound organizational
and directing of employees to achieve
structure by clearly
organizational goals.
defining authority and responsibility.
-Managers need to understand
 To formulate and implement
 Individual and group behavior
organizational policies.
 Techniques of communication
 Coordination of factors of production.
 Techniques of motivation (---?)
Managerial Functions  Effective style of leadership(---?)
1. Planning The outcome of the leading function is high level
2. Organizing of motivation and commitment by the employees.
3. Staffing 5. controlling
4. Leading/directing -It is the process of comparing actual
5. Controlling performance with the sated standard.
1. Planning
- The first function of all managers
-
 - The aim of controlling is to take Office Manager, Foreman, and Supervisor.
corrective action if the performance is Managers can also be classified based on the
lower than the plan. scope of activities they mange.
- The outcome of the controlling function Functional Managers
is the accurate measurement of General Managers
performance. 1. Functional Managers have specialized
Levels of management skills in single area of operation such as
 One of the best ways to study the accounting, marketing, and
activities of management is production.
classifying them in to different levels. 2. General Managers are responsible for
 Organizations’ level of management overall operation.
varies with the size of the organization. They coordinate two or more departments.
 Management level commonly classified Managerial roles
in to three. All managers must play some role and
Levels of management must have some skills to be effective.
- Top level managers  Hennery Mintzberg identified ten (10)
- Middle level managers managerial roles by closely observing the
- Operating level/first line managers/ day to day activities of a group of CEOs
lower level and divided them in to three.
1. Top Level Managers Interpersonal role
- Manage the overall activity of the 1. Figure head role
organization. 2. Leadership role
- Establish policies, strategies, long term 3. Liaison role
plans, and make major decisions. Informational role
- Represent the organization (deal with 1. Monitor role
external bodies) 2. Disseminator role
- They are few in number. 3. Spokesperson role
- Their title includes Board of Directors, Decisional role
Executive Committee, Chief Executive, 1. Entrepreneurial role
President, and General Manager. 2. Disturbance handler role
2. Middle level managers 3. Resource allocator role
 They are specialists (their activity 4. Negotiator role
limited to a particular area of operation) 1. Interpersonal Role- Involves dealing with
 They act as intermediary between top and other people and it arise from managers
operating level managers. formal authority.
 Develop medium range plans 1.1. Figurehead role
 They supervise first line managers. -Managers act as representatives of the
 Their title includes Department Managers, organization.
Division Managers, and Operation -Managers represent the organization at
Managers. ceremonial and symbolic functions like
3. First line managers making speech, signing
Operating Level Management documents, attending ribbon cutting
 Plan daily and weekly activities (short ceremonies.
range plans) 1.2. Leadership Role
 They manage only non managers. -Managers influence behavior and activities
 Their typical title includes Section Chief, of their followers in order to accomplish
organizational objectives.
 3.4. Negotiator Role
-Leadership role involves hiring, training, -When managers negotiate or deal with
motivating… other organization or with in, they are
1.3. Liaison Role playing negotiator role.
-It refers to dealing with people outside like Managerial skills
customers, government officials, and Managerial Skills and their Relative
suppliers. Importance
-It also includes dealing with people inside -Skill is an ability to perform a particular
the organization like people in different task. As the job of managers is complex it
departments. needs multidimensional skills.
-Coordinating activities. The three managerial skills are
2. Informational Role 1. Technical Skills
-It involves processing of information. 2. Human Relation/ Interpersonal Skills
-It involves receiving and communicating 3. Conceptual skills
information. 1. Technical Skills
2.1. Monitor Role -It is the ability to use specific knowledge,
-Involves gathering and screening technique, methods or resources in
information. specialized field.
2.2. Disseminator Role It is acquired through education
-Involves distributing the screened Formal
information. Informal
2.3. Spokes person role -It is very important for 1st line managers
When managers transmit the information 2. Human Relation/ Interpersonal Skills
to outside of the organization or to outside -It is the manager’s ability to work with
of the unit. other people and to work effectively as a
3. Decisional Role group member.
3.1. Entrepreneurial Role -It includes the managers ability to
-Managers initiate changes to improve  Resolve Conflict
organizational performance.  Communicate effectively
-Managers mostly use this role at the time  Motivate
they  Facilitate
 initiate new project  Coordinate
 test a new market 3. Conceptual skills
 test a new business -Managers need the mental capacity to
3.2. Disturbance handler role understand the overall working of the
-Managers play this role when they deal organization.
with problems like---? -It involves the managers information
 Conflict between workers processing, thinking, and planning
 Breaking contract abilities.
 Labor strikes -The managerial activities that require
 Bankruptcy conceptual skill includes decision making,
3.3. Resource Allocator planning, and organizing.
-Managers play this role when they -Conceptual skill is more important for the
distribute resources like: top level managers.
 Human Resource Is management a science or art?
 Time…
 — Science is a systematized knowledge which to obtain the maximum possible
derived from observation, study, and productivity.
experimentation carried on in order to • The 2nd perspective concerned with a
determine the natures and principles of the comprehensive investigation and analysis
subject under study. of management concentrated more on the
o Mgmt is a science because it is based on management of the organization i.e., the
principles which are derived from the management of the organization or
detailed study and observation of: functions of management as a whole this
 Organization approach was primarily advocated by
 Authority Henry Fayol (1841-1925 )
 Communication 1. Scientific Management Theory
Motivation • At the turn of the 20th C, business was
Art is the application of knowledge and expanding and creating deluxe products
skills to the specific time, place and and new markets, but labor was in short
condition tactfully, creatively and wisely. supply (there was no sufficient skill man
 Mgmt is an art because managers apply power, which could support and sustain
Judgment, decision making, and the dramatically advanced human needs in
motivation tactfully, creatively and wisely. a remarkably turbulent business
 CHAPTER –TWO (2) environment mostly after industrial
Development of Management Thought revolution of the western world.
THE ERA OF CLASSICAL MANAGEMENT • As a possible remedy to overcome these
• The classical approach to management problems, two solutions were available: in
resulted from the first significant, one case either to substitute capital for
concentrated effort to develop a body of labor or else the use of man power
management thought. sufficiently as another option.
• The classical approach to management • For surprise , due to the costly nature and
was originally propounded by the gentle other constraints, scientific management
thinkers and pioneers of management kept attention and concentrated on the
practitioners. second solution, that is the use or
• Basically, the classical approach to deployment of human power in a proper
management recommends that managers manner to achieve efficiency and
continually strive to increase organizational productivity which were a hot debate of
efficiency which was purposely aimed at that time.
increasing productivity. • Lower level management was the main
• The classical approach to management focus of analysis, primarily as special
can be seen from two basically similar but target through which to find one best
logically different perspectives. way to perform a task; that means it
• The first perspective emphasized on assesses how task situations can be
studying and analyzing the practice of structured to get the highest productivity
lower level management, which was from workers.
commonly termed as “scientific • The process of finding this “one best way”
management approach” (developed by has become known as the scientific method
Fredrick W. Taylor. of management (in short, scientific
• During this era (scientific management) the management).
main intention of the organizations was • Thus, one person no longer performed
inclined towards finding ways through every task but specialized in performing
only a few tasks
•
• Frederick Winslow Taylor, an American
PRINCIPLES OF SCIENTIFIC MGMT engineer, was the founder of the scientific
• Frederick Winslow Taylor (1856 – 1915) management school of thought.
• Under Taylor's management system, • He spent the greater part of his life working
factories are managed through scientific on the problems of achieving greater
methods rather than by use of the efficiency on the shop-floor worker himself
empirical "rule of thumb" so widely and later as a manager.
prevalent in the days of the late nineteenth • His career began as an apprentice in
century when F. W. Taylor devised his engineering.
system and published "Scientific • He later moved to the Midvale Steel
Management" in 1911. Company and the course of 11 years he
• The main elements of the Scientific rose from labor to shop superintendent.
Management are: "Time studies • In 1889 he left Midvale to join the
Functional or specialized supervision Bethlehem Steel Company, where he
Standardization of tools and implements consolidated his ideas and conducted some
Standardization of work methods Separate of his most famous experiments in
Planning function Management by improving labor productivity
exception principle . " • As stated earlier, at the beginning of the
• The use of "slide-rules and similar time- 20th century skilled labor was in short
saving devices", Instruction cards for supply, especially in the U.S.
workmen, Task allocation and large bonus • To expand productivity, ways had to be
for successful performance, The use of the found to increase the efficiency of workers.
'differential rate, Mnemonic systems for • In an effort to address these problems,
classifying products and implements A Taylor build the body of principles that
routing system, A modern costing system know constitute the essence of scientific
etc. " mgmt.
• Taylor called these elements "merely the • Taylor based his managerial system on
elements or details of the mechanisms of production-line time studies.
management." • Instead of relying on traditional work
• Perhaps the key idea of scientific methods, Taylor analyzed and timed steel
management and the one which has drawn workers’ movements on a series of jobs.
the most criticism was the concept of task • With time study as his base, Taylor broke
allocation. each job down into its components
• Task allocation is the concept that (“elements”) and designed the quickest and
breaking task into smaller and smaller best methods of operation for each part of
tasks allows the determination of the the job.
optimum solution to the task. • He thereby established how much workers
• The main argument against Taylor is this should be able to do with the equipment
reductionist approach to work, and materials at hand.
dehumanizes the worker. • Taylor also encouraged employers to pay
• The allocation of work "specifying not only more productive workers at higher rates
what is to be done but how it is to be done than others.
and the exact time allowed for doing it" is • The increased rate was carefully calculated
seen as leaving no scope for the individual and based on the greater profit that would
worker to excel or think. result from increased production.
•
•
• Thus, workers were encouraged to surpass • It showed supporting the study of motions,
their previous performance standards and positions, and task for classification to
earn more pay. expedite the process of production.
• The study has reported the importance
• Taylor called his plan the differential rate training individuals to perform efficiently
system. as opposed to searching for individuals
• Taylor also called for a drastic who are already experienced.
reorganization of supervision. • Depicted as increasing positive
• His system embodied two new concepts: (1) relationships between management and
separation of planning and doing and (2) subordinate personnel, which implies that
functional foremanship it sets the foundation for Total Quality
• But the essence of scientific management, Management.
Taylor believed, lay in none other than • Shows the importance of educating
what he called “mental revolution”. personnel and paying them well to
• Although Taylor’s methods led to dramatic encourage efficiency and increasing
increases in productivity and to higher pay retention.
in a number of instances, workers and Feature of Scientific Management
unions began to oppose his approach. 1. Separation of planning and doing
• Like the workers at Midvale, they feared - Work divided into two parts namely
that working harder or faster would planning and doing.
exhaust whatever work was available and 2. Functional foremanship
bring about layoffs. 3. Job analysis
The 4 basic principle of scientific 4. Standardizations
management - He standardized tools, instruments, period
1. The development of a true science of of work, amount of work each worker has to
management, so that the best method for undertake, working conditions and cost of
performing each task could be determined. production.
2. The scientific selection of the workers, so - Improved work culture and working
that each worker would be given conditions brought revolution in the
responsibility for the task for which he or production units.
she is best suited. 5. Scientific selection and training of
3. The scientific education and development workers
of the worker. 6. Financial incentives
4. Intimate, friendly co-operation between - Introduced various incentive systems in the
management and labor. organization so that higher productivity was
Importance of scientific Management achieved.
• It used to solve the problem of wasted 7. Economics
human effort. - Organizations must ensure adequate
• promote efficiency in the workplace, profitability, which was necessary for
becomes important to offer the greatest survival, he maintained.
amount of service to the organization in 8. Mental revolution
the least amount of time while expending - there must be sound relations between the
the least amount of resources management and the workers.
• identifies the importance of performance - All disputes should be resolved by mutual
evaluation in that it brings about the discussion within the organization.
discovery of the most productive methods - Close supervision therefore was a part of
of personnel operation supervisors job.
- Gang boss was responsible for the smooth • Both realized that the problem of human
flow of the work. resources and their management at all
- Workers were provided necessary tools, levels is the key to business success.
instructions pertaining to the job, perfect • Both applied scientific method to this
work environment and advise when problem.
necessary. • Fayol was perhaps the first individual to
Limitations and criticism of scientific discuss management as a process with
Management specific functions that all managers must
• Unemployment perform.
• Exploitation • He proposed planning, organizing,
• Monotony commanding and controlling as the four
• Weakening of Trade Union management functions.
• Over speeding • Fayol found that activities of an industrial
• Expensive undertaking could be divided into six
• Time Consuming groups:
2. Classical Organizational Theory • (1) Technical (production).
- Focused on the problems faced by top • (2) Commercial (buying, selling, and
managers of large corporations. exchanging),
- Focused on the management of • (3) financial (search for, and optimum use
organizations while scientific management of, capital),
focused on the management of work, it was • (4) security (protection of property and
labeled classical organization theory. persons),
- (1) develop basic principles that could • (5) accounting (including statistics), and
guide the design, creation, and • (6) managerial (planning, organization,
maintenance of large corporations command, coordination, and control).
- (2) identify the basic functions of Fayol’s General Principles of Mgmt
managing organizations. 1.Division of Work. Specialization that
- Practicing executives were the major economists consider necessary for
contributors to classical organization efficiency in the use of labor.
theory. 2.Authority and responsibility. When
- many contributors to the classical authority is exercised, responsibility arises.
organization theory. 3.Discipline. Is absolutely essential for the
- Henri Fayol is singled out for discussion, smooth running of business and without
Henri Fayol (1841 – 1925) discipline no enterprise could prosper.
• The celebrated French industrialist and 4.Unity of Command. Employees should
theorist began his working life as a young receive orders from one superior only.
mining engineer at the age of 19. 5.Unity of Direction. each group of activities
• Spent his entire working life with the same with the same objective must have one
company, rising to Managing Director at head and one plan.
the age of 47 and only retiring after his 77th 6.Subordination of Individual to General
birthday Interest. This is self-explanatory; when the
• The works of Taylor and Fayol are two are found to differ, management must
essentially complementary. reconcile them.
• 7.Remuneration. Remuneration and methods
• of payment should be fair and afford the
maximum possible satisfaction to
• employees and employer.
 8.Centralization. Without using the term - The part of rationally structured
‘centralization of authority,’ Fayol refers organizations are designed and coordinated
to the extent to which authority is to achieve specific ends.
concentrated or dispersed. - Rationality implies goal directedness.
9.Scalar Chain (line of authority). Is the - Impersonality implies objectivity in
chain of command ranging from the interpersonal relations.
highest to the lowest ranks? - Human resource decisions in bureaucracies
10.Order. Both equipment and people must were to be strictly impartial – based on
be well chosen, well placed, and well qualifications and work demands rather
organized for a smooth-running of than on a caste system or the personal
organization. For material things; “a place preferences of decision makers.
for every thin and everything in its place.” Characteristics’ of bureaucracy
For people “a place for everybody and • Hierarchy,
everybody in his place.  Impersonality,
11.Equity. Kindness and justice will  Written rules of conduct,
encourage employees to work well and be  Promotion based on achievement,
loyal.  Specialized division of labor, and
12.Stability of Tenure of Personnel.  Efficiency
Changes in employee assignments will be  According to Weber, bureaucracies are
necessary, but if they occur too frequently, goal-oriented organizations designed
they can damage morale and efficiency. according to rational principles in order to
13.Initiative. Thinking out a plan and efficiently attain their goals.
carrying it out successfully can be deeply  Offices are ranked in a hierarchical order,
satisfying. Managers should encourage with information flowing up the chain of
employees to do this as much as possible. command, directives flowing down.
14.Esprit de corps. This is the principle that Advantage of bureaucracy
“in union there is strength,” as well as an • Precision, speed, un ambiguity, knowledge
extension of the principle of Unity of of the files, continuity, discretion, unity,
command, emphasizing the need for strict subordination, reduction of friction,
teamwork and the importance of and of material and personal costs is
communication in obtaining it. raised to the optimum point.
3. Bureaucratic Management Theory Disadvantage of bureaucracy
- Advocates of the bureaucratic theory • lie in red-tape (excessive procedure),
contributed yet a third, widely divergent rigidity, and neglect of human factor
stream of thought Appraisal of the classical Theories
- Concerned for how the overall structure of • Contribution of the classical approach was
an organization influences managerial that it identified management as an
effectiveness. important element of organized society.
- Chief advocate of the bureaucratic Management has increased in importance.
organization was Max Weber (1846 – 1920). • The facts that management skills must be
- A wealthy German intellectual, Max Weber applied in schools, government, and
described what he believed was the ideal or hospitals, as well as business firms, are
pure form of organization. stressed.
- Weber’s “pure form” of organization is • Advocates of the classical approach
characterized by rationality and believed that management, like law,
impersonality. medicine, and other occupations, should
-
be practiced according to principles that The first inquiry
managers can learn. • Mayo and his associates were asked to
• The identification of management functions solve production and employee turnover
such as planning, organizing, and problem in Textile Mill (in USA).
• controlling provided the basis for training • The turnover rate was nearly 250 percent
new managers. annually, compared to 5 or 6 percent in
• Many management techniques used today other departments.
are direct outgrowth of the classical • Efficiency engineers had previously tried to
approach. solve the problem by establishing a
• For example, time and motion analysis, financial incentive plan, but not once did
work simplification, incentive wage the workers produce enough to earn a
systems, production scheduling, personnel bonus under the plan.
testing, and budgeting are all techniques • introduction of rest periods, after extensive
derived from the classical approach. discussions with the employees,
Major Criticism immediately brought positive results in
• Critics argue that the scientific both turnover and productivity.
management and classical organization • ten-minute rest periods a day were
theory are more appropriate for the past, established with the employees deciding
when the environments of most when they would be taken.
organizations were very stable and • combined with employee participation in
predictable. decision making, turned the tide,
• The changing environment, changing production climbed well within acceptable
worker expectations, and changing limits – to above 85 percent efficiency from
expectations of society today are a low of 70 percent.
tremendous. Behavioral school
The human relation movement • Others who were university trained in
• Refers to the manner in which managers social sciences such as psychology,
interact with subordinates. sociology, and anthropology began to study
• To develop good relations, followers of this people at work.
approach believed, managers must know • had advanced training in applying the
why their subordinates behave as they do scientific approach to the study of human
and what psychological and social factors behavior.
influence. • These individuals have become known as
• Human relations concentrated on the behavioral scientists and their approach is
social environment. considered to be distinct from the human
• Significant contribution by professor Elton relations approach.
Mayo, an Australian by birth and a • The individuals in the behavioral science
Psychologist by training. branch of the behavioral approach believe
• Founder of the human-relations that man is much more complex than the
movement, whose advocates have stressed “economic man” descriptions of the
the need for managerial strategies to classical approach and the “social man”
ensure that concern of people at work is description of the human relations
given the highest priority. approach.
• Appropriately, the title of Mayo’s first work • Concentrates more on the nature of the
was “The First Inquiry.” work itself, and the degree to which it can
fulfill the human need to use skills and
abilities.
• Behavioral scientists believe that an • Informal (unofficial) groups at work
individual is motivated to work for many exercise a strong influence over the
• reasons in addition to making money and behavior of workers;
forming social relationships. • Supervisors and managers need to be
Focused on communication, motivation aware of these social needs and cater for
leadership areas. them if workers are to collaborate with the
Pros and cones of the behavioral official organization rather than work
schools against it.
• Neo-classical approach has contributed a • Humans are social-that business
wealth of important ideas and research operations are a matter not merely of
results on the people-managing aspect of machinery and methods but also of gearing
the discipline of management. these with the social system to develop a
• Management must get work done through complete socio technical system.
others, management is really applied • Led to the recognition that managers
behavioral science, because a manager operate in a social system.
must motivate, lead, and understand • Recognize the importance of the human
interpersonal relations. factor, or that management theorists
• Managers must know how to deal with overlook it
people appears valid. • Underscore the need for a greater and
• But management is more than applied deeper understanding of the social and
behavioral science. behavioral aspects of management.
• Make them better practitioners of the The quantitative approach
process of management. • The management scientists, led by
• Help them in problem solving situations. operations researchers and systems
• Human behavior is complex and is studied analysts, see management as “a system of
from a variety of viewpoints. mathematical models and processes”.
• This complicates the problem for a • They hold that since managing is a logical
manager trying to use insights from the and rational process, it can be expressed in
behavioral sciences. terms of mathematical relationships and
The Hawthorne study models, this will lend exactness to
• Made one of the early important management process and substitute
contributions to the human-relations certainty for guesswork, knowledge for
approach. judgment, hard facts for experience.
• Conducted at the Hawthorne plant of the • The management scientists contributed
Western Electric Company in Chicago, lots of mathematical tools for solving
USA, between 1927 and 1932, in a number problems of management in areas like
of different stages. quality control, inventory control,
The main conclusions to be drawn from production scheduling, machine loading,
the Hawthorne studies are:- warehouse operations and resource
• Individual workers cannot be rated in allocation.
isolation, but must be seen as members of • Management scientists have not made any
a group; contribution to the theory of management.
• The need to belong to a group and have • They only made mathematical tools
status within it is more important than available to practitioners of management.
monetary incentives or good physical • Moreover, while it is used in many problem
working conditions; areas, management science does not deal
• with the people aspect of an organization.
 The Contingency Approach • suitable objectives, strategies, policies and
• Contingency theory has been developed practices.
mainly in the 1970s. • Thus, contingency theory provides a
• The contingency theorists aim at method of analysis as well as a way of
integrating theory with practice in a integrating organization with its
systems framework. environment.
• When an organization behaves in response • Contingency theory of management is an
to forces in its environment, its behavior is extension of system approach to
said to be contingent on the forces. management. There cannot be a suitable
• Hence, a ‘contingency’ approach is an management solutions for all situations.
approach where the behavior of one sub- • External and internal factors keep
unit is dependent on its environmental changing.
relationship to other units or sub units • Since systems approach cannot
that have some control over the appropriately suggest relationship between
consequences desired by the sub-unit. organization and environment, the gap so
• Thus, behavior within an organization is created has been fulfilled by contingency
contingent on situations, and if a manager approach.
wants to change the behavior of any part of The theory suggests:
the organization, he or she must attempt to 1. What a manager should do in a particular
change that part of its environment that is situation based on the examination of the
influencing it. facts relating to each situation?
• Contingency approach emphasizes that 2. Contingency theory suggests active inter-
there is no one best way to design relationship between various variables in a
organizations and manage them. situation and managerial action devised.
• Management is situational, and managers • It not only suggests solution to the given
should design organizations, define situation but also examines various
objectives, and formulate strategies, influences of the situation on behavior
policies, and plans in accordance with the pattern of the individual and groups in the
prevailing environmental conditions. organization.
• Secondly, managerial policies and • The contingency view of organization may
practices, to be effective must respond to be explained in the words of Kast and
changes in the environment. Rosenzweing as follows: “The contingency
• Thirdly, since management’s success view seeks to understand the inter-
significantly depends on its ability to cope relationship within and among sub-
with its environment, it should sharpen its systems as well as between the
diagnostic skill so as to anticipate and organization and its environment and to
comprehend environmental changes define patterns of relationship and
• Forth, managers should have adequate configuration of variables.
human relations skills to accommodate • Tosi and Hammer states that when a sub-
change, and abilities to manage transition, system in an organization behaves in
as well as stabilize change. response to another system or sub-system,
• Finally, it should use the contingency we say response is contingent on
model in designing the organization, environment.
developing its information and • Hence a contingency approach is an
communication system, adopting its approach where the behavior of one sub-
effective leadership styles and formulating units is dependent on its environment
• relationship to other units or sub-units
that have control over the consequences
• Sharma (1997) explains that contingency
desired by that sub-unit.
views tend to be more concrete and to
Features of the Contingency Theory
emphasize more specific characteristics
1. Management action is contingent on
and pattern of inter-relationship among
certain actions outside the system or the
sub-systems.
sub system.
• The view recognizes that the environment
2. Organizational action should be based on
and internal sub-systems of each
the behavior of action outside the system
organization are somewhat unique and
so that organization can be integrated with
provide a basis for designing and managing
the environment.
specific organizations.
3. Because of the specific organization –
• Contingency view recognizes the complexity
environment relationship, no action can be
involved in running modern organizations
universal. It various from situation to
and uses pattern of relationship and/or
situation.
configurations of sub-systems in order to
4. Internal functions of the organization are
search a way out.
generally consistent with the technology,
• However there are certain drawbacks in
demand place on the organization by the
this approach.
society, external environment and needs of
• It is not considered as unified theory of
the members of the organization.
management because there is inadequate
5. Contingency approach suggests suitable
literature.
alternatives for those managerial actions,
• It does not suggest any action in a
which are influenced by external and
contingency.
internal environment like organizational
• Management actions depends upon
design, strategy formulation, decision
situation is not adequate.
systems, leadership styles and organization
• The theory is difficult for empirical testing.
improvement.
• It is complex because there are large
6. Organizational systems are not absolute.
number of variables and large number of
They have to adjust or modify considering
managerial actions involved.
social, political, technical and economic
• The theory is not proactive, it is reactive.
situations.
Implications
• Contingency approach to management is
an important addition to the management
theory.
• It is a very sophisticated approach because
it takes in to consideration increasing
complexity of organization.
• The approach emphasizes multivariate
nature of organization and suggests
organizational designs and managerial
actions to specific situations.
• The theory is contingent on environmental
factors like politics, technology and
economic situation prevailing from time to
time.