MODERN APPROACHES

MODERN APPROACHES

The System Theory and the Contingency Theory, which have significantly shaped modern management thought.

Systems Theory: The system approach gives managers a new way of looking at an organization as a whole and as a part of the larger, external environment. According to this theory, an organizational system has four major components: Inputs, Transformation processes, Output, and feedback. Following figure shows this system:



System View of Organization


INPUTS TRANSFORMATION PROCESS OUTPUTS












Feedback (Information about outcomes & Position of org.)

The two basic types of systems are closed and open systems. Closed system is that does not interact with its environment an Open System is that interacts with its environment. According to Taylor, people and organizations are as closed system. In reality, all organizations are open systems as they are dependent on interactions with their environment.

Contingency Theory: This is also known as Situational Theory. According to this theory, there is no one best way to manage all situations. It depends upon situation or circumstances. In this, the manager has to identify which technique will, in a particular situation, under particular circumstances, and at a particular time, best contribute to the attainment of management goals.