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Management Science Theory of Management Syndicate 3

The document discusses management science, which applies the scientific method to business problems. It developed in the 1940s-1960s from operations research during WWII. Mathematical tools are used to simulate decision making processes and evaluate options. Modern applications focus on objective decisions in areas like operations, planning, and finance.

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mhalkot11
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24 views10 pages

Management Science Theory of Management Syndicate 3

The document discusses management science, which applies the scientific method to business problems. It developed in the 1940s-1960s from operations research during WWII. Mathematical tools are used to simulate decision making processes and evaluate options. Modern applications focus on objective decisions in areas like operations, planning, and finance.

Uploaded by

mhalkot11
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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MANAGEMENT SCIENCE

Theory of Management

Syndicate 3.
DEFINATION
• Management science approach is an
application of the scientific method to
problems arising in the operating system and
solving of these problems by solving
mathematical equations representing the
system-Churchman, Ackoff, and Arnoff

• Also known as Quantitative, Mathematical or


Operational approach
HISTORY BRIEF
• Developed in 1940’s -1960’s
• Grew directly out of World war II groups
(operations research teams) who sought
solutions to many complex war problems
• Mathematical tools used to reach decisions
included linear programming, queuing theory,
simulation models, quality control etc
CHARACTERISTICS IN APPLICATION
• Managerial decision making: Stresses that
efficiency comes from proper planning & right
decisions. Problem solving uses mathematical tools
• Mathematical models: decision making process can
be simulated & evaluated before decision is made
• Computer applications-extensively used in the
emergence of this approach
• Evaluation criteria: models are evaluated against set
criteria ( e.g. Revenue, ROI, Cost savings
Cont’..
• Operations management: Ops specialists use following
techniques in certain industries (e.g. Manufacturing): forecasting,
inventory modelling, linear & non linear programming, scheduling,
probability analysis, breakeven analysis etc commonly used
models.

• MIS: most recent subfield of management science perspective.


MIS is a system designed to provide information to managers in a
timely & cost efficient manner. Entails an integrated database (in a
computer) a hierarchical information structure & orientation
towards decision making
MODERN APPLICATION
• Focus is on making rational & objective
decisions
• Has found application in planning & control
activities though not all managerial processes
can be rationalised & quantified (e.g. staffing,
leading, organising)
Examples of quantitative tools in modern
business
• Decision tree-used in decision analysis to identify
a strategy to reach a goal
• Simulation: imitation of real world
process/system over time-to study investment
decisions
• Trend chart: display data over time e.g.
Employee productivity, competitor comparisons,
ops efficiency etc
• Benchmarking: compare diff aspects of business
against set standards
• Financial projections: Financial analysis
ADVANTAGES
• Timely decisions-complex demanding markets
thus reduced decision making time
• Cost effective-e.g entering wrong markets/
launching wrong products
• Important in decisions where there is no
background information/experience or
complex in nature
LIMITATIONS
• Educational/technical knowledge required to
use models
• Does not provide solutions for all facets of
management esp-areas with high level of
human element e.g. leadership motivation
Major contributors
• Russel Ackoff
• Patrick Blackett
• Harry markowitz
• Joel dean

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