Which are the modern theories of Management?

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Explain the modern theories of Management.

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(A) Mathematical Theory—It is also known as Quantitative Approach Theory or Operational
Research Theory or Management Science Theory. The management scientists led by operation
researches and system analysts see management as a "system of mathematical models and processes."
They hold that since managing is a logical and rational process, it can be expressed in terms of
mathematical relationships and models. Its basic assumption is that an organisation is a system with its
parts in interactional and interdependent relationships and these interactions and interdependencies
can be expressed in terms of models and equations. The main features of the mathematical school of
thought are:

(1) Management is concerned with problem-solving and it should use mathematical tools and
techniques for this purpose.

(2) The different factors involved in management can be expressed in the form of models or
equations which can be solved with the help of mathematical techniques.

(3) Management problems can be described in mathematical symbols.

(4) The basic methodologies may be operations research, mathematical tools, simulation and
model building.

The main contributors to this thought are Taylor, Gilbreth, Gantt, Joel Dean, Newmann, Ackoff and
Hicks. There is no doubt that management science has made significant contributions by applying
mathematical tools to the solutions of various complex problems of management. But mathematical
techniques cannot be considered as a substitute for management. Mathematics is at best a tool in
management study and not coterminous with management.

(B) System Approach Theory-The theory was developed by Boulding, Rosen, Johnson. Henderson,
Daniel Katz, C.W. Churchman etc.

A system is a set of inter-connected and inter-related elements directed to achieve certain goals.
This theory views organisation as an organic and open system composed of many sub-systems. As a
system organisation is composed of a number of sub-systems viz. production, supportive, maintenance,
adaptive managerial, individuals and informal groups.

All these sub-systems operate in an interdependent and interactional relationship. The various
subsystems or parts of an organisation are linked with each other through communication, decisions,
authority responsibility relationships, objectives, policies, procedures and other aspects of coordinating
mechanism. Organisations as systems have a variety of goals. The important among them are survival,
integration and adaptation with environment and growth.

The major features of the approach to the study of management may be summed up as under:

(1) A system consists of inter-related and interdependent parts.

(2) The approach emphasises the study of the various parts in their inter-relationships rather than
in isolation from each other.

(3) The approach brings out the complexity of a real life management problem much more sharply
than any of other approaches.

(4) The approach may be utilised by any of the other approaches.

(5) The approach has been utilised in studying the function of complex organisations and has been
utilised as the base for new kinds of organisation.

The Systems Approach has an edge over the other approaches insofar as its closeness to reality is
concerned. However the problem with the approach is its utter complexity particularly when it comes
to a study of large and complex organisations. The conceptual framework of management provided by
this approach is too abstract to be useful to practising managers. The approach recognises the input of
environment but does not functionally relate it to management concepts and techniques.

© Contingency Approach Theory—Contingency theory has been developed mainly during 1970s.
The major contributors to this school of thought in management are Joan Woodward, Fiedler, Lorsh,
Lawrence etc. Theorists of all other approaches to management have not integrated the environment.
They often assume that their approaches and systems have universal applicability. The contingency
approach incorporates the environment and attempts to bridge the theory practice gap.

Contingency theory builds on the major premises of the systems. Theory that organisation is organic
and open system and there is a relationship of interdependence between an organisation and its
environment, as well as within and between its various sub-systems. The contingency theory aims at
integrating theory with practice in a systems framework.

According to this approach, management is situational. This approach rejects the universality of
management thesis. Managers should design organisations, define objectives and formulate policies
and plans according to the prevailing environmental conditions. Managerial policies and plans must
respond to changes in environmental conditions. Further, management should have sufficient skills to
anticipate and comprehend environmental changes, and to accommodate change. Finally, it should use
the contingency model in designing the organisation developing its information and communication
system, adopting effective leadership styles and formulating suitable objectives, policies and practices.

Thus, this approach provides a method of analysis as well as a way of integrating organisation with its
environment.

A contingency approach seems to hold a great deal or promise for the future development of
management theory and practice. The other approaches to management can all be in-corporates into
the contingency framework. At present, the contingency approach seems to be the only practicable way
to studying management. It adequately clears the nature of management. Hence it is the best approach
of all.