COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT
Introduction to Management (MGMT 2062) Group assignment
Group: 7
Topic: - Chapter Summary on Evolution and development of
management thought

Group members ID
1. MESAY FULLASA UGR/7827/15
2. NETSANET ALEMU UGR/2330/15
3. MUKEMIL RAHMETO UGR/9361/15
4. MUKEREM MEKI UGR/5320/15
5. NATNAEL GETYE UGR/0029/15
6. MOHAMMED SEID UGR/7965/15

Submitted To: Fuad M.

Submission Date: November 4, 2023
 TABLE OF CONTENT

Table of Contents
TABLE OF CONTENT...............................................................................................................................1
Introductions.........................................................................................................................................2
2.1 Forerunners to scientific management............................................................................................3
2.1.1 Early contributes to scientific management.............................................................................3
2.1.2 Early works and contributions of Charles Babbage...................................................................5
2.1.3 Times of Robert Owens and the Managerial Era......................................................................6
2.2 The Era of classical management theory.........................................................................................7
2.2.1. Scientific management theory.................................................................................................8
2.2.2 Classical organization theory....................................................................................................8
2.2.3. Bureaucratic management theory...........................................................................................9
2.2.4. Total appraisal of classical theory..........................................................................................10
2.3 The Human Relations Movement..................................................................................................11
2.3.1 Behavioral school....................................................................................................................12
2.2.3. Elton mayo and the behavioral..............................................................................................12
2.3.3 Pros and cons of the behavioral school..................................................................................13
2.3.4 The Hawthorne Study.............................................................................................................13
2.4 The Modern Era.............................................................................................................................15
2.4.1. Characteristics of Modern Approaches to Management...................................................15
2.4.2. Systems Approach...........................................................................................................16
2.4.3 Quantitative or Mathematical Approach................................................................................17
2.4.4 Contingency Approach............................................................................................................18
References...........................................................................................................................................21

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Introductions
This paper's focus on “The Evolution of Management," covers a crucial topic for understanding how
management theories and practices have evolved. We will examine the early proponents of scientific
management, including Robert Owen and Charles Babbage, as well as their significant contributions
to the discipline. We'll also look at the classical management era, examining bureaucratic
management theory, scientific management theory, and classical organizational theories. We will
additionally talk about the human relations movement and how it affected management, including
the behavioral school, the works of Elton Mayo, and the well-known Hawthorne Study. Finally, we
will examine the current era of management, covering the contingency approach, systems approach,
quantitative approach, and characteristics of modern approaches.

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2.1 Forerunners to scientific management

The forerunners of Scientific Management theory are Robert Owen, Charles Babbage and Henry
Robinson Town.

Robert Owen:

Robert Owen, who was the manager of different cotton textile mills between 1800 and 1828, was
the first person to pay attention to labour welfare. He suggested a change in the attitude of
industrialists towards workers. He worked up to his maximum possible extent for the amelioration of
working conditions of workers and thereby tried to win over their confidence. He stated that men
should not be treated as secondary and inferior to machines.

2.1.1 Early contributes to scientific management

Frederick Winslow Taylor:

Fredrick Winslow Taylor, known popularly as the father of scientific management and a classicist in
management theory, was the first person who insisted on the introduction of Scientific methods in
management. He made for the first time a systematic study of management and evolved an orderly
set of principles to replace the trial and error methods then in vogue.

F.W.Taylor made a humble beginning by joining as an apprentice in a small machine making show in
Philadelphia in the 1870s. Later he became a machinist in 1878 at the Midvale Steel Works in
Philadelphia (USA). Afterwards he rose to the position of a machinist foreman. He observed that
workers were ot enthusiastic and were doing as little as possible, just adequate to maintain their job.
Instead of becoming angry at the outlook of workers, Taylors sympathized with them. He wrote
"When a naturally energetic man works for a few days besides a lazy one, the logic of the situation in
unanswerable; why should I work hard when that lazy fellow gets the same pay that I do and does
only half as much work?" Taylor formed opinions on the basis of his observations. There was an
uncompromising nature on his part and he never tried to satisfy his opponents. He was a man of
firm convictions.

After leacing the Midvale Factory, he joined Behtleham Steel Company: wherein he introduced
scientific management. But there was strong opposition from all managers because of his
uncompromising nature and this led to the termination of this services unceremoniously. After
leaving Bethleman in 1901, he wrote his pioneering work 'Shop Management'. Besides this, he wrote

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several other books and among them the pioneering work was Principles and Methods of Scientific
Management (1911)

Principles of Scientific Management:

 Time and Motion Study  Cooperation between Workers and

 Science, but not Rule of the Thumb Manage men.
 Differential Payment.  Method Study.
 Group Harmony  Scientific Selection and Trainings.
 Standardizations.
 Separation of Planning from Execution

Taylor advocated a total mental revolution on the part of management and workers. Even though is
scientific management was confined to management at the shop level, he indicated the possibility
and significance of the scientific analysis of the various aspects of management. To sum up, the
stressed the following:

1. Replacement of rule-of-thumb by science.

2. Achieving harmony in group action rather than discord.

3. Attaining maximum output in place of restricted output.

4. Scientific selection, training and placement of workers and

5. Development of all workers to the fullest extent possible for their own and their Enterprise’s
highest priority.

Criticism of Taylor's Contributions:

F.W.Taylor's contribution was criticized on the following grounds:

1. The consideration of the word 'Scientific' before 'Management' was criticized since that actually is
meant by scientific management is nothing but an approach to management.

2. His principles were mostly confined to production management. He ignored other functional areas
of management like finance, marketing, personnel and accounting.

3. His functional foremanship violates the principle of unity of command.

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4. Trade unionists criticized Taylor's principles as the means to exploit workers due to the reason
that wages of the workers were not increased in direct proportion to the increase in productivity.

Despite the criticism leveled against Taylor's scientific management, the techniques advocated by
him were further refined by his followers like Henry L.Gant, Frant B.Lillian and M.Gilbreth.

Henry L. Gnatt :

Henry L.Gnatt (1861-1919) had worked on several projects jointly with F.W.Taylor. He had modified
Taylor's incentive system when he worked independently. He abandoned the differential relate
system as having too little motivational impact, introduced 50% bonus to those workers who could
complete a day's work. He also introduced bonus to the supervisors for each worker who could
complete a day's work and additional bonus, if all the workers reached it, with a view to enable the
supervisors to train their workers to do a better job. Gnatt also built upon Owen’s idea of rating an
employee's work publicity.

The Glibreths :

Frank B.Gilbreth (1868-1924) and Lillian M.Gilberth (1878-1972) made their contributions to the
scientific management movement as a husband and wife team. Although both of them collaborated
on fatigue and motion studies, Lillian also focused on ways of promoting the individual workers'
welfare. According to her, the ultimate aim of scientific management was to help workers reach
their full potential as human beings. According to them, a worker would do his/her present job,
prepare fo the next highest job and train his/her successor, all at the same time. Thus every worker
would always be a doer, a learner and a teacher.

The developments in the scientific management approach and principles led to the development of
administrative management. Now.

2.1.2 Early works and contributions of Charles Babbage

Charles Babbage: besides Robert Owen, there were some scientists who though of making
improvement in the management by observing the scientific techniques. Prominent among them
was Charles Babbage, a leading British mathematician at Cambridge University from 1828-1839. He
studied the working conditions of factories in England and France and observed that most of the
factory class used to work on the basis of estimates and imagination. They were tradition-oriented
rather tan scientific-minded. Two pioneering works of Babbage are the Differential Engine and On

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the Economy of Machinery and Manufacturers. He stated that the methods of science and
mathematics could be applied to the solution of the factory's problems.

Contribution of Babbage:

•Babbage stressed that good machines and efficient workers do not inevitably ensure success in
business. Good management that directs and controls machines and workers is the most crucial
element in successful business.

•He advocated, like Adam Smith, the principle of division of labour. He also suggested the use of
time study techniques.

•Babbage conceived an analytical machine as far back as 1833 which was a forerunner of today's
digital computer. So he was a visionary much ahead of time.

•He considered all aspects of contemporary management thinking-mutuality of interest between

employees and employer, production, incentive pay, quality control, wage and salary administration,
profit sharing, operations research, preventive maintenance and research and development.

It is rightly stated "He wrote a premiere of management before the world is able to read it and he
invented the computer before its time."

McFarland indicates: "To Babbage goes the credit for advocating in relation to industrial problems in
fundamental thinking which proceeded the formulation of a science of management." Hence other
background for the formulation of the science of management was provided initially by Charles
Babbage. Afterwards, credit has been given to F.W.Taylor for enunciating the area of scientific
management.

2.1.3 Times of Robert Owens and the Managerial Era

The management era can be seen through the evolution of management thought and it
encompasses four key stages: the Prescientific Management Period, Classical Theory, Neo-
Classical Theory (or behavior approach), and Max Weber's Bureaucratic Model.

The Pre-scientific Management Period was shaped by the industrial revolution, impacting
capital, labor organization, and production methods. Notable figures like Charles Babbage
and Robert Owens introduced ideas emphasizing science, mathematics, and employee
welfare.
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Classical Theory emerged in the late 1 9th century, with figures such as H. L. Grant, F. W.
Taylor, and Emerson establishing scientific management. It emphasized standardization,
labor division, and scientific organization, closely linked to the industrial revolution and
large-scale enterprises.

The Neo-Classical Theory, an advancement of the classical approach, focused on improving

employee relationships within the work environment rather than just physical resources
management.

Max Weber introduced the Bureaucratic Model, emphasizing labor division, hierarchical
authority, and employee placement based on technical capabilities. This model provided a
structured approach to organizational management. Each stage built upon prior ideas,
refining and expanding management concepts from scientific methods to human-centric
approaches and structured bureaucratic systems.

2.2 The Era of classical management theory

The classical management theory emerged during the Industrial Revolution, emphasizing
efficient work and organizational management. It comprises scientific management,
administrative management, and bureaucratic management. This viewpoint, labeled
"classical," stemmed from early works forming the management fields foundation.

Scientific management, pioneered by Frederick W. Taylor, aimed to improve worker

efficiency through scientific work studies. Taylor addressed soldiering (deliberate work
slowing) by establishing time studies and incentivizing exceeding standards.

Frank and Lillian Gilbreth expanded motion studies, while Henry Gantt introduced the Gantt
Chart for scheduling work. Their collective contributions under scientific management
increased productivity through specialization and efficiency techniques.

On the other hand, classical organization theory, exemplified by Henri Fayol, focused on
managing entire organizations. Fayol ls work outlined managerial functions and principles,
emphasizing planning, organizing, directing, coordinating, and controlling. His 14 principles
aimed at effective management, including division of labor, authority, discipline, and unity
of command.
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Contributions of classical management include foundational management processes and
principles. However, its rigid application in complex, dynamic organizations and its
mechanistic view of employees are recognized limitations. The theory's economic
motivation and universal principles have faced criticism for their lack of adaptability in

modern, diverse workplaces.

2.2.1. Scientific management theory

It is management theory that aims to improve efficiency and productivity in the workplace
by applying scientific methods to the management of work processes. It involves breaking
down tasks into smaller, simpler components, analyzing them, and then optimizing them for
maximum efficiency. This approach emphasizes the use of standardized procedures, time
and motion studies, and the selection and training of workers based on their abilities and
skills. The goal of scientific management is to increase productivity, reduce waste, and
improve the overall efficiency of the organization.

It was developed by Frederick Winslow Taylor in the late 19th century, and it has been
widely adopted in manufacturing and other industries.

The basic principles of scientific management are:

* The development of a science for each element of a worker's job, which replaces the old
rule-of-thumb methods.

* Scientific selection and training of workers.

* Cooperation between management and workers to ensure that the work is done in
accordance with the principles of science.

* Division of work between management and workers so that each group will perform the
work for which it is

2.2.2 Classical organization theory

It is refers to a set of perspectives and principles that emerged during the late 19th and
early 20th centuries to study and understand organizations. This period saw the

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development of key ideas and theories that sought to establish a systematic understanding
of how organizations function and how they can be managed effectively. The classical
organization theory can be broadly categorized into three main approaches: Classical
organization theory is a set of theories that attempt to explain how organizations work and
how they can be managed more effectively. It is based on the assumption that organizations
are rational systems that can be designed and managed in a way that will achieve their
goals.

The classical organization theory is based on four main principles:

* Division of labor: This principle states that work should be divided into specialized tasks so
that each worker can focus on a specific task and become more efficient.

* Hierarchy of authority: This principle states that there should be a clear hierarchy of
authority in an organization, with each level of authority having a specific set of
responsibilities.

* Rules and regulations: This principle states that organizations should have a set of rules
and regulations that all employees must follow.

* Impersonality: This principle states that organizations should be run in a impersonal way,
with decisions being made based on logic and reason rather than personal relationships.

The classical organization theory has been criticized for being too simplistic and for not
taking into account the complex nature of organizations. However, it remains an important
framework for understanding how organizations work

2.2.3. Bureaucratic management theory

It is a management approach that emphasizes the importance of rules, procedures, and

formal authority in organizations. It was developed by Max Weber, a German sociologist, in
the early 20th century. According to Weber, a bureaucratic organization is characterized by
a hierarchical structure, with clearly defined roles and responsibilities, and a system of rules
and procedures that govern the behavior of employees. Bureaucratic management theory
emphasizes efficiency, rationality, and predictability, and is often associated with large,
complex organizations such as government agencies and corporations.

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Weber argued that bureaucracy is the most efficient and effective way to organize a large
organization. He believed that bureaucracy would help to ensure that organizations were
run in a fair and impartial manner.

Bureaucratic management theory is based on the following principles:

* Division of labor: Work is divided into specialized tasks that are assigned to different
individuals or groups.

* Hierarchy of authority: There is a clear hierarchy of authority in which each individual or

group is subordinate to a higher authority.

* Rules and regulations: There are a set of rules and regulations that govern the behavior of
individuals and groups within the organization.

* Impersonality: Decisions are made based on rules and regulations, not on personal
relationships.

* Written records: All decisions and actions are recorded in writing.

Bureaucratic management theory has been criticized for being too rigid and inflexible. It has
also been criticized for being dehumanizing, as it can lead to individuals feeling like they are
just cogs in a machine.

However, bureaucratic management theory remains a popular and effective way to manage
large organizations. It is particularly well-suited for organizations that need to ensure that
decisions are made in a fair and impartial manner

2.2.4. Total appraisal of classical theory

Classical theory is a broad term that refers to a number of different economic theories that
were developed in the 18th and 19th centuries. These theories share a number of common
features, including the belief that the economy is self-regulating, that the government
should play a limited role in the economy, and that free markets are the best way to allocate
resources.

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Classical theory has been criticized for a number of reasons, including its failure to take into
account the role of government, its assumption that markets are always efficient, and its
neglect of the distribution of income. However, classical theory remains an important part
of economic thought, and its insights continue to be debated by economists today.

Here are some of the appraisals of the classical theory:

* Classical theory is a powerful tool for understanding the economy. It can help us to
understand how markets work, how prices are determined, and how the economy responds
to changes in supply and demand.

* Classical theory is based on a number of simplifying assumptions, which means that it is

not always accurate in describing the real world. However, these assumptions are often
useful for making predictions about how the economy will behave.

* Classical theory is often criticized for being too optimistic about the ability of markets to
self-regulate. However, this criticism is not always fair. Classical theory does recognize that
markets can fail, but it argues that these failures are rare and can be corrected by
government intervention.

* Classical theory is a valuable tool for understanding the economy, but it is important to
remember that it is just one tool. Other theories, such as Keynesian theory, can also be
helpful in understanding the economy.

2.3 The Human Relations Movement

The human relations movement is a management theory that emerged in the early 20th
century, focusing on the importance of understanding and addressing the needs and
motivations of employees in the workplace. It emphasized the social and psychological
aspects of work, recognizing that workers are not just cogs in a machine, but individuals
with their own needs, desires, and emotions. The movement emphasized the importance of
communication, teamwork, and collaboration in creating a positive work environment and
improving productivity. It also highlighted the need for managers to be empathetic and
understanding of their employees' perspectives and concerns. The human relations
movement had a significant impact on modern management practices, influencing the
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development of concepts such as employee engagement, empowerment, and
organizational culture.

2.3.1 Behavioral school

The behavioral school of thought in psychology emphasizes observable and measurable

behavior as the basis for understanding human behavior. This school of thought emerged in
the early 20th century as a reaction to the introspective and subjective methods of earlier
schools of psychology. Behaviorists believe that behavior is shaped by the environment
through conditioning, which occurs through the processes of classical conditioning and
operant conditioning. Classical conditioning involves learning through association, where a
neutral stimulus is paired with a previously meaningful stimulus to elicit a response. Operant
conditioning involves learning through consequences, where behaviors that are reinforced
are more likely to be repeated, and behaviors that are punished are less likely to be
repeated. Behavioral therapy is based on these principles and is used to treat a variety of
psychological disorders. It involves identifying maladaptive behaviors and replacing them
with more adaptive ones through techniques such as positive reinforcement, shaping, and
modeling. Critics of the behavioral school argue that it oversimplifies human behavior by
reducing it to observable responses and ignores the role of cognitive processes in shaping
behavior. However, the behavioral school has made significant contributions to psychology

and continues to influence research and practice in the field.

2.2.3. Elton mayo and the behavioral

Elton Mayo was not a part of the behavioral school of thought in psychology, but rather a
management theorist who contributed to the development of organizational behavior.
Mayo conducted the famous Hawthorne studies, which examined the effects of various
work conditions on employee productivity and found that social and psychological factors
had a significant impact on worker behavior. Mayo's work emphasized the importance of
understanding human behavior in organizational settings and highlighted the role of social
and interpersonal dynamics in shaping behavior. His findings contributed to the
development of the human relations movement in management theory, which emphasized
the importance of employee satisfaction and well-being in achieving organizational goals.

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Overall, while Mayo's work is not directly related to the behavioral school of psychology, it
shares a similar emphasis on understanding human behavior through observation and
measurement.

2.3.3 Pros and cons of the behavioral school

Pros:

 Focuses on observable behaviors: The behavioral school emphasizes the importance

of measurable and observable behaviors, which makes it easier to identify and
measure employee performance

 Emphasizes training and development: This approach emphasizes the importance of

training and development to improve employee skills, knowledge, and performance.

 Encourages positive reinforcement: This approach encourages positive

reinforcement to motivate employees and improve their performance.

Cons:

 Ignores individual differences: The behavioral school tends to ignore individual

differences in personality, values, and motivation, which can lead to a one-size-fits-
all approach that may not work for everyone.

 Can be too focused on short-term results: The behavioral school emphasizes short-
term results, which may not be sustainable in the long run.

 May not address underlying issues: This approach may not address underlying issues
that may be causing poor performance or behavior, such as job dissatisfaction or lack
of motivation.

2.3.4 The Hawthorne Study

The Hawthorne Studies, conducted between 1924 and 1932 at the Western Electric
Hawthorne Works in Chicago, were groundbreaking experiments on lighting effects on
worker productivity. They revolutionized organizational behavior and management theory,
shaping the understanding of human behavior in the workplace and influencing management
practices.

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The Hawthorne studies consist four major experiments:-

 Illumination Experiments (1924 -1927)

 Relay Assembly Test Room Experiments (1927 -1932)
 The Bank Wiring Observation Room Studies (1931 -1932)
 The Mass Interviewing Program (1933 -1939)

Illumination Experiments (1924 -1927)

This was the most important experiment on the Hawthorne Effect, carried out between 1924
and 1927. The aim of the study was to investigate if there was a relationship between
productivity and the work environment. More precisely, they sought to determine whether
worker productivity would be impacted by the illumination in a factory.

First, during their shift, the first group of employees who made electrical relays saw multiple
illumination changes, and their reactions to these changes were monitored. The study
discovered that an increase in productivity resulted from any modification to the illumination,
whether it was for the better or worse. But the study also discovered that production fell once
more.

Relay Assembly Test Room Experiments (1927 -1932)

The Relay Assembly Test Room experiments were conducted to examine the effects of
different organizational and social interventions on morale and productivity. Workplace
variables like shift schedules, rest periods, and team-based rewards were changed to see how
they affected worker productivity. The results demonstrated the significant impact of social
elements, casual contacts, and employee involvement on attitudes and actions, which gave
rise to the Hawthorne effect—a phenomena in which participants alter their conduct as a
result of becoming aware that they are being watched.

The Bank Wiring Observation Room Studies (1931 -1932)

The Bank Wiring Room experiments expanded the Hawthorne studies by examining the
social aspect of work and its impact on productivity. They examined how group norms,
teamwork, and peer pressure affected individual and collective performance. The study
highlighted the importance of social factors in shaping employees' experiences and outcomes.
The findings challenged prevailing assumptions about management and labor, reshaping

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organizational theory and practice and laying the foundation for human relations and
behavioral management theories.

The Mass Interviewing Program (1933 -1939)

In the third experiment over 20,000 interviews were conducted with employees about
supervision and the work environment. Despite strict confidentiality, responses were often
guarded and stereotyped. The approach was changed to indirect questioning, allowing
employees to choose topics. The researchers discovered that work performance, position, and
status were determined by group members, not just the individual.

The Interviewing Program attempted to learn more about the viewpoints, attitudes, and
experiences that workers had at work. This stage shifted toward qualitative research, stressing
the significance of comprehending how social dynamics, individual and group perspectives,
and motivations shape actions relating to the workplace.

2.4 The Modern Era

The Modern era of modern management (1960 to present) provides best practices that you
can implement in your company to successfully lead people and processes. After 1960
management thought has been turning somewhat away from the extreme human relations
ideas particularly regarding the direct relation between morale and productivity

2.4.1. Characteristics of Modern Approaches to Management

The Modern Management Approach is a collection of theories that support efficient management
techniques in contemporary work environments. Through the integration of many theories such as
contingency theory, systems theory, emotional intelligence, quantitative theory, human relations
theory, and agile management, professionals can improve their leadership skills and propel the
effectiveness of their organizations.

Some characteristics of modern approaches to management are:-

 Give attention to innovation and creativity.

 The importance of cooperation and teamwork is emphasized.
 Emphasis on continuous learning and development,
 Emphasis on customer-centricity (focusing on the needs of the customer)
 Improves data-driven decision-making,

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  Supports adaptability,
 improves employee engagement,
 Improves productivity,
 Transparency and open communication

2.4.2. Systems Approach

Firstly, a system consists of interacting elements. It is a set of interrelated and interdependent parts
arranged in a manner that produces a unified whole. The various sub-systems should be studied in
their interrelationships rather than in isolation from each other.

Systems theory views organizations as complex systems with interconnected parts, helping managers
manage complex relationships between internal and external environments. It emphasizes the need for
input-output conversion in other systems, highlighting the interdependencies and interactions among
these components. Effective management requires a holistic perspective, considering the organization
as a cohesive whole rather than focusing solely on individual elements.

The systems approach defines an organization by dividing it into components, demonstrating how
different parts work together towards a common goal. These components include inputs,
transformational processes, outputs, and feedback.

 Inputs - are factors needed to create goods and services, such as raw materials, capital,
technology, or information.
 Transformational processes - involve activities that convert inputs into outputs,
 Outputs - are the results produced by the organization.
 Feedback - helps leaders influence or make decisions related to inputs.

There are two types of systems

1. Open system: - is one that is exposed to and connected to the external environment, such as
social institutions, customers, suppliers, government agencies, and law courts. The degree of
interaction between an organization and the external environment varies, as it may differ between
organizations manufacturing drugs with hospital patients and those dealing with prison inmates.

2. Closed system: - is a system that is not influenced by the external environment, such as inmates
in prisons and monasteries. According to von Bertalanffy, living organisms are open systems because
they cannot survive without continuously exchanging matter and energy with their environment,
resulting in immediate death due to lack of oxygen, water, and food. (Bertalanffy, 1972)

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2.4.3 Quantitative or Mathematical Approach

Concept of quantitative Approach

The concept of quantitative management involves applying mathematical models and statistical
techniques to decision-making and problem-solving in organizations. It emerged during World War II
when these techniques were used to solve military problems. After the war, they were applied to
the private business sector, particularly in areas like production management and inventory control.
Quantitative management includes the use of statistics, optimization models, information systems,
and computer simulations. It aids in resource allocation, project scheduling, and inventory
management. The major contributions of quantitative management lie in decision-making, planning,
and control. However, its limitations include the inability to predict human behavior, potential trade-
offs with other managerial skills, and reliance on assumptions that may be impractical.

Feature/characteristics of quantitative theory

The approach has following features:

1. Management is concerned with problem solving and must use mathematical tools to solve them.

2. Mathematical models can be developed by quantifying various variables of the problems.

3. Mathematical symbols can be used to describe managerial problems.

4. Mathematical tools, operations research, simulation and model building are used to find out
solutions to managerial problems.

Limitation of quantitative theory

The quantitative approach to problem-solving in management is criticized for its narrow

focus on mathematical models and solutions, overlooking the importance of the human
element in organizations. It fails to account for the need for quick decision-making in real-
life situations where complete information is not always available. Additionally,
management involves more than just decision-making and requires various other functions.
The approach assumes that all decision-making variables are measurable and
interdependent, which is not always realistic. Outdated or inaccurate data can also lead to
wrong decision-making. Overall, critics argue that mathematics is a tool rather than a

comprehensive approach to management theory.

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2.4.4 Contingency Approach
Concept of Contingency Approach

The contingency approach to management, developed in the 1970s by J.W. Lorsch and P.R.
Lawrence, criticizes other approaches that assume there is one best way to manage. It recognizes
that management problems vary in different situations and should be approached based on the
demands of the specific situation. The contingency approach is a problem-solving approach that
considers all major factors before making decisions. It replaces simplistic management principles
with more integrated ones, as research has shown that organizations and their subsystems are
unique and require individualized design and management.

The contingency approach emphasizes the need to appraise and analyze the entire managerial
environment within an organization to determine the most fitting work features, technology,
personnel, and organizational designs for particular circumstances. It recognizes that what managers
do depends on the given situation and the influence of different solutions on the behavior patterns
of the enterprise. Therefore, managers should develop variable methods, tools, or action plans
according to the specific situation or contingencies that arise. The type of motivation,
communication system, and leadership style in an organization will depend on the prevailing
circumstances.

The contingency approach integrates theory with practice in a systems framework. It recognizes that
the behavior of an organization is contingent on its environment, and if a manager wants to change
the behavior of a part of the organization, they must try to change the situation influencing it. The
contingency approach identifies the internal and external variables that critically influence
managerial decisions and organizational performance. It views the organization as a collection of
subsystems interacting with the environment and aims to define patterns of relationships or
configurations of variables that suggest appropriate organizational designs and managerial actions
for specific situations.

The contingency approach promotes organizational effectiveness by recognizing the importance of

adapting management practices to the unique circumstances of each situation. It emphasizes the
need for managers to consider the specific demands and challenges they face and make decisions
accordingly. This approach moves away from the idea of a single best way to manage and instead
encourages a more flexible and adaptable approach to management.

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 Contributor for Contingency Approach

Feature/characteristics Contingency approach

This approach has the following features:

1. 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 organizations and prepare strategies, policies and plans according to prevailing
circumstances.

2. Managerial policies and practices to be effective, must adjust to changes in environment.

3. 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.

4. 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, programs and practices. Thus, contingency approach looks to hold a great deal of
promise for the future development of management theory and practice.

Limitation of Contingency Approach

1. Inadequate Literature

Contingency approach suffers from inadequately of literature. Therefore, it has not adequately
spelled out various types of actions which can be taken under different situations. It is not sufficient
to say that ‘a managerial action depends on the situation.’

The approach should provide ‘if this is the situation, this action can be taken.’ Unless, this is done,
the approach cannot offer much assistance to the practice of management. No doubt, researches
have been conducted in this direction but, by and large, they have not satisfied the needs of
managers.

2. Complex

The suggestion of the approach is very simple, that is, managers should do according to the needs of
the situation. However, when put into practice, this becomes very complex. Determination of
situation in which managerial action is to be taken involves analysis of a large number of variables
with multifarious dimensions. Therefore, there is a possibility that managers, who are always short

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of time, may ignore the thorough analysis of all these variables and may resort to short-cut and
easier way.

3. Difficult Empirical Testing:

Contingency approach being complex, presents problems in testing the percepts of the theory. For
empirical testing of the theory, it is necessary that some methodology is available. No doubt,
methodology is available but because of the involvement of too many factors, testing becomes
difficult.

4. Reactive not Proactive:

Contingency approach is basically reactive in nature. If nearly suggests what managers can do in a
given situation. For a given organization, super system constitutes environment and management
can be applied to supra-system also. Therefore, managers are responsible to manage the
environment in such a way that they avoid the undesirable aspects of environment.

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References

Bertalanffy, von Ludwig (1951), Problems of General Systems Theory: A New Approach to the
Unity of Science, Human Biology, Vol. 23 No.4 pp.302-312.

Bertalanffy, von Ludwig; Hempel, G. Carl; Bass, E. Robert and Jonas, Hans (1951), General Systems
Theory: A New Approach to Unity of Science, i – vi Human Biology 23

Bertalanffy, von Ludwig (1972), The History and Status of General Systems Theory, Academy of
Management Journal, Vol.15 pp. 407-426 Chacko,

K. George (1989), The Systems Approach, New York:

Prager Donnelly, H. James Jr.; Gibson, L. James and Ivancevich, M. John (1992), Management,
Richard D. Irwin Inc., p.544 Mullins, J. Laurie (2006), Essentials of Organizational Behaviour,
Pearson Edu. Ltd. p.35

Bertalanffy, von Ludwig (1972), The History and Status of General Systems Theory, Academy of
Management Journal, Vol.15 pp. 407-426

Kanigel R. The One Best Way. Frederick Winslow Taylor and the Enigma of Efficiency. Viking,
1997.

Kiefer, T. (2005). Trust in Competitions: The Hawthorne Effect Revisited. Journal of Management
Inquiry, 14(1), 96-113.

Mayo, E. (1933). The human problems of an industrial civilization. Routledge.ich, m.john1992

https://www.indeed.com/career-advice/career-development/modern-theory-of-management

https://www.psychological-evaluations.com/post/the-hawthorne-effect

https://www.simplypsychology.org/hawthorne-effect.html

https://www.villanovau.com/resources/leadership/an-overview-of-management-theories/

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