Department of Mechanical & Aerospace Engineering

Pulchowk Campus, Institute of Engineering

Tribhuvan University

ORGANIZATION AND MANAGEMENT

Theory of Management Models

Dr. Shree Raj Shakya

2022

1
https://www.vskills.in/certification/blog/management-theories/
 Theory of Management
• In the early twentieth century, the problems of organization and
use of labor force used to be solved ad hoc.
• The management problems were solved by rule of thumb.
• To solve the organizational problems, different management
theories were proposed by different management scholars in
different times.
• These management theories can be classified into four categories
in general:
1) Scientific Management Theory
2) Administrative Management Theory
3) Behavioral Management Theory
4) Modern Management Theory

Dr. S. R. Shakya 2
 Scientific Management Approach
• This theory was put forward by F.W. Taylor from
USA.
• This approach dictates the use of methods and
techniques to study scientifically the work at the
shop floor level to increase the workers’ efficiency
and productivity.
• Taylor conceived the idea of breaking down the
components of manual tasks in manufacturing
environments, timing each movement ('time and
motion’ studies) so that there could be a proven
Efficiency
best way to perform each task.
https://www.youtube.com/watch?v=evt
• Thus employees could be trained to be 'first class'
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within their job.
• This type of management was particularly relevant
to performance drives e.g. 'Action On' projects.
Dr. S. R. Shakya 3
 Scientific Management Approach

• Taylor’s theory can be stated as follows:

1. Physical work could be scientifically
studied to determine the optimal
method of performing a job.
2. Workers could thereafter be trained
https://www.slideserve.com/dard/scientific-management-
theory-frederick-w-taylor by being given prescriptions for how
they were to do their job.
3. Workers would be willing to adhere
to these prescriptions if paid on a
differential piece of work basis
(performance basis).
https://scientificmanagement101.wordpress.com/what-is-
scientific-management/

Dr. S. R. Shakya 4
 Scientific Management Approach
Principle of Scientific Management
Theory
• The managers who follows the Scientific
Management Approach has to do following:
1. Develop a science for each operation to
replace opinion and rule of thumb
(Scientific method of doing work).
2. Determine accurately from the science
the correct time and methods for each
job (Time and Motion studies)
3. Develop a standard method of doing
each particular job (Standardization).
https://scientificmanagement101.wordpress.co
m/time-and-motion-studies/

Dr. S. R. Shakya 5
 Scientific Management Approach

4. Set up a suitable organization

to take all responsibility from
the workers.
5. Select the employees, train
them scientifically to perform
the standard job and
remunerate them.
6. Divide the work and let the
https://fourweekmba.com/scientific-management/

employees specialize to perform

the specific job to enhance the
performance.
Dr. S. R. Shakya 6
 Scientific Management Approach
• The workers has to follow:
1. Do not worry about wages and
profits.
2. Share in the prosperity of the firm by
working in the correct way and
receiving wage increases.
3. Do not waste time and co-operate
https://scientificmanagement101.wordpress.co
with the management in developing
m/time-and-motion-studies/
the science.
4. Accept that management would be
responsible for all decisions.
5. Agree to be trained in new methods
where applicable.
Dr. S. R. Shakya 7
 Scientific Management Approach
Merits of Scientific Management Model
• It is a rational approach to the organizational work and enables tasks
and procedures to be measured with a considerable degree of
accuracy.
• Measurement of paths and processes provide useful information on
which to base improvements in working methods, plant design, etc.
• Improving work methods brings enormous increases in productivity.
• It enables employees to be paid by results and to take advantage of
incentive payments.
• It stimulates management into adopting a more positive role in
leadership at shop floor level.
• It contributes to major improvements in physical working conditions
for employees.
• It provides the formation for modern work studies.
Dr. S. R. Shakya 8
 Scientific Management Approach
Demerits of Scientific Management Model
• The workers have to adhere to the rigid methods and procedures over
which s/he has no discretion.
• It leads to increased fragmentation of work due to its emphasis on
divisional labor.
• It generates an economically based approach to the motivation of
employees by linking pay to geared outputs.
• It puts the planning and control of workplace activities exclusively in the
hands of the managers.
• It rules out any realistic bargaining about wage rates since every job is
measured and rated 'scientifically‘.
• It ignores the human aspects of employment and workplace
environment. This leads to the creation of boring repetitive jobs with the
introduction of systems for tight control and the alienation of shop floor
employees from their managers. It treats the employees as a machine.
Dr. S. R. Shakya 9
 Administrative Management Approach
• Whereas scientific management focuses on the productivity
of an individual employee, the administrative management
theory focuses on the total organization.
• It attempts to find a rational way to design an organization
as a whole.
• The theory generally calls for a formalized administrative
structure, a clear division of labor, and delegation of power
and authority to administrators relevant to their areas of
responsibilities.
• Among the well-know contributors to this theory were
Lyndall Urwick, Chester Barnard, Alvin Brown, Henry Fayol,
Oliver Sheldon and Max Weber.

Dr. S. R. Shakya 10
 Administrative Management Approach
• However, the most notable of all contributors was Henry Fayol
and Max Weber.
– Henry Fayol (France) : 14 Fundamental Principles of
Management practice.
– Max Weber (Germany): Bureaucracy in organization.

Dr. S. R. Shakya 11
 Administrative Management Approach
Common Features of Administrative Management Theory

https://www.marketing91.com/administrativ
e-management-theory/

1. Formalized Administrative Structure: According to this theory, it is

necessary to design an organization using a very formalized structure
with clear lines of authority from the top down. This is a hierarchical
structure.
2. Division of labor: A second feature of this theory is the requirement of
clear division of labor between departments in an organization. Each
department is responsible for particular activity.
3. Strict Rules and Regulation: A clear rules and regulation is necessary to
control employees. Dr. S. R. Shakya 12
 Administrative Management Approach
4. Centralized Authority and Decision
Making: Authority is centralized
within top managers.
5. One Way Communication: All the
communication (messages, order,
request , instruction, etc.) is done
through only formal hierarchical
channel only.
6. No importance for human
http://www.differencebetween.info/difference-between-
management-and-administration
behavior.

Dr. S. R. Shakya 13
 Administrative Management Approach
Henri Fayol (1841-1925), France
• A French mining engineer who developed the general theory of
business administration, also known as Fayolism.
• Fayol is acknowledged as the ‘Father of Modern Management’ .
• This theory was developed independently of Scientific Management
theory but roughly contemporaneously.
• Fayol was the first person to actually give a definition of
management which is generally familiar today namely ‘to forecast
and plan, to organize, to command, to coordinate and to control‘.
• Fayol developed a top-down approach to management by focusing
the managerial practices to increase the efficiency in organizations.
• Fayol prescribed 14 points for the effective management of an
organization.

Dr. S. R. Shakya 14
 Administrative Management Approach
Fayol's 14 Principles of Management

Dr. S. R. Shakya 15
 Administrative Management Approach
Fayol's 14 Principles of Management

Dr. S. R. Shakya 16
 Administrative Management Approach
Fayol's 14 Principles of Management

• Many of these principles are absorbed into modern day

organizations, but they were not designed to cope with
conditions of rapid change and issues of employee participation
in the decision making process of organizations.

Dr. S. R. Shakya 17
 Administrative Management Approach
Fayol's 5 Elements of Management
Fayol is the first person to define
management. He defined management as
having five elements which outline the key
responsibilities of good managers:
1. Planning: Managers are required to
define strategies and objectives to
determine the stages of the plan and the
technology necessary to implement it.
2. Organizing: Managers must organize and
https://www.pinterest.com/pin/696017317385885727/ provide the resources necessary to
execute said plan, including raw
materials, tools, capital, and human
resources.
Dr. S. R. Shakya 18
 Administrative Management Approach
3. Command (delegation): Managers must
utilize authority and a thorough
understanding of long-term goals to
delegate tasks and make decision for the
betterment of the organization.
4. Coordination: High-level managers must
work to integrate all activities to
facilitate organizational success.
Communication is key to success in this
component.
https://www.pinterest.com/pin/696017317385885727/
5. Controlling: Managers must compare
the activities of the personnel to the
plan of action; this is the evaluation
component of management.
Dr. S. R. Shakya 19
 Administrative Management Approach
Difference Between Taylor and Fayol's Principle
• Fayol's principle comes under the school of administrative
management thought while Taylor’s principle comes under the
school of scientific management thought.

• Taylor was concerned with time and motion study to improve

the efficiency of an individual employee while Fayol was
concerned with the management and increasing the efficiency of
whole organization.

• Taylor focused more on workers' efficiency and productivity

while Fayol focused on human and behavioral characteristics of
employees.
Dr. S. R. Shakya 20
 Administrative Management Approach
Difference Between Taylor and Fayol's Principle
• Taylor thought of bottom up approach for management
improvements or starting with the most elemental units of
activity and making individual workers more efficient.

• In contrast, Fayol emphasized a more top-down approach that

was focused on educating management on improving processes
first and then moving to workers.

Dr. S. R. Shakya 21
 Administrative Management Approach
Max Weber (1864 - 1924), Germany, Bureaucratic Model:
• Max Weber, one of the pioneer of modern sociology, theorized
that if an organization based on the hierarchical order on the
formal organizational structure is given the authority, would be
more efficient. This form of organization was called bureaucracy.
• Weber outlined the principles of ideal bureaucracy.
• Weber advocated a system based on standardized procedures
and a clear chain of command and more formalized and rigid
structure of organization known as bureaucracy.
• Weber stressed efficiency, as did Taylor, but also warned of the
danger of emphasizing technology at the expense of emotion.

Dr. S. R. Shakya 22
 Administrative Management Approach
• This non-personal view of organizations follows a formal
structure where rules, formal legitimate authority and
competence are characteristics of appropriate management
practices.

• He believed that a supervisor’s power should be based on an

individual's position within the organization, his or her level of
professional competence and the supervisor's adherence to
explicit rules and regulations.

Dr. S. R. Shakya 23
 Administrative Management Approach
Characteristics of Weber’s Bureaucratic Model
1. Specialization and Division of Labor: The job should be divided
systematically and the employees be given necessary authority to
perform the job.

2. Position arranged in a hierarchy: The organization should follow a

principle of hierarchy. Each lower officer is under the control and
supervision of a higher one. This bureaucratic characteristics
forces control over every member in the organization.

3. A system of abstract rules: A set of formal rules is required to

ensure uniformity and coordination of effort. It also provides
continuity and stability.
Dr. S. R. Shakya 24
 Administrative Management Approach
4. Impersonal Relationship: The officers should avoid the emotional
attachment to subordinates and clients. There is no scope for
other relationships than the relations provided by formal
positions.

5. All employees are selected based on the technical qualification

only.

6. Promotions are made according to seniority and achievement.

No arbitrary dismissal is allowed.

7. Administrative acts and decisions are recorded in writing.

Dr. S. R. Shakya 25
 Administrative Management Approach
Criticism of Administrative Management Theory
• Fayol and Weber's management principles and functions are used
even today for managing the organizations. However, this
Administrative Management Theory is criticized on the following
grounds:

• Management Oriented Theory: This theory is management

oriented and does not give much attention to the problems of
the workers.

• Lack of Importance to Informal Organization: This theory does

not give any importance to informal organization or groups. It
gives importance only to the formal organizational structure.
Dr. S. R. Shakya 26
 Administrative Management Approach

• Concepts Borrowed From Military Science: Some of the concepts

of administrative management theory were borrowed from
military science. They tried to apply these concepts to the social
and business organizations. For e.g. Henri Fayol gave importance
to "commanding“ and not "directing" the workers.

• Mechanical Approach: The administrative management theory

has a mechanical approach. It does not deal with some of the
important aspects of management such as motivation,
communication and leading.

Dr. S. R. Shakya 27
 Behavioral Management Approach
• The classical theory of management
– was emerged from the Industrial Revolution and focuses on
efficiency, productivity and output of employees, to be the
most important to an organization’s success.
– However, it generally does not focus on human or behavioral
attributes or variation among employees.
– were simply not useful in dealing with many management
situations and could not explain the behavior of individual
employees.
• Under Behavioral Management approach,
– employees are treated as human beings and not as machine,
– listening to their needs & problems and
– involving them in decision making.
Dr. S. R. Shakya 28
 Behavioral Management Approach
• Classical theory ignored employee motivation and behavior. As a
result, the behavioral school of management was emerged to
deal with complex human behavior.
• The behavioral perspective of management (sometimes called the
"human relations perspective") takes a much different approach
from the classical perspective: it is generally more concerned
with employee well-being and encourages management
approaches that consider the employee as a motivated worker
who genuinely wants to work and wants to produce quality
work.

Dr. S. R. Shakya 29
 Behavioral Management Approach
• This theory encourages a
management approach to focus on
building relationships with
employees in order to
– help them achieve their
workplace goals and
– work as effectively and efficiently
as possible.
• The Behavioral Management
Approach began in the 1920s with
theorists such as Elton Mayo,
Abraham Maslow and the Great
https://slideplayer.com/slide/6063672/
Depression, the labor movement,
the results of the Hawthorne studies.
Dr. S. R. Shakya 30
 Behavioral Management Approach
Great Depression
• With the crash of stock market in 1929 in America, the Great
Depression began.
• The consequences of the Great Depression were
– widespread unemployment,
– decline of purchasing power and
– lowering the standard of living of people.
• One positive outcome of this depression was that management began
to realize that production alone was not the major factor of business
but human resource, marketing, finance were also required for a
business to survive and grow.
• So, managers were forced to recognize the human problems and cope
with them. As a result, personnel departments were created in many
organizations.
Dr. S. R. Shakya 31
 Behavioral Management Approach
Labor Movement
• Mere creation of personnel departments did not improve the
plight of workers.
• In many industries and factories, the conditions of employees
were simply ignored.
• Production was still the priority of managers.
• Decent hours of work, fair wage and adequate working
conditions were literally ignored for more production.
• Exploitation of labor continued.
• This made the workers form strong unions to fight against the
exploitation.
• As a result, management began to consider the employee
relation, fair wages, hours of work and condition of work
environment. Dr. S. R. Shakya 32
 Behavioral Management Approach
The Hawthorne Studies
• The Hawthorne studies were an important start to the behavioral
perspective of management. These were a series of research
studies conducted with the workers at the Hawthorne plant of
the Western Electric Company.
• They found that workers were more strongly motivated by
psychosocial factors than by economic or financial incentives.
• In the Hawthorne experiment, a group of telephone line workers
were separated and observed working in a private room. During
their workday, the group members were given special privileges,
like freedom to leave their workstations, changes in pay rates,
and even company sponsored lunch.

Dr. S. R. Shakya 33
 Behavioral Management Approach
• What they discovered was the control group produced more than
the other employees.

• The rationale for this increased production was that the group
felt that management was interested in their well-being.

• This began the human relations movement for management.

• If all management spend time, express interest in workers'

personal well-being, and reward them for a job well done,
workers would feel motivation to work harder.

• In fact, behavior towards work would be positive.

Dr. S. R. Shakya 34
 Behavioral Management Approach
Abraham Maslow
• Around this same time, Abraham Maslow created his hierarchy-
of-needs theory, which showed that workers were motivated
through a series of lower-level to higher level needs.

• This theory has been applied in the workplace to better

understand "soft" factors of employee motivation, such as goal
setting and team involvement, in order to better manage
employees.

Dr. S. R. Shakya 35
Behavioral Management Approach

Dr. S. R. Shakya 36
 Behavioral Management Approach
Douglas McGregor
• Another theory in the behavioral perspective include Douglas
McGregor's Theory X and Theory Y, which states about the
perceptions managers have about their employees and how
employees react to those perceptions.
• In Theory X, managers assume employees are inherently lazy &
lethargy and, therefore, micromanage.
• In Theory Y, managers are more laissez-faire and allow
employees more freedom in their work.
• McGregor's theory of management is an example of how
behavior-management theory looks more into the "human"
factors of management and encourages managers to understand
how psychological characteristics can improve or hinder
employee performance.
Dr. S. R. Shakya 37
 Behavioral Management Approach
McGregor's Theory X and Theory Y

https://www.youtube.com/watch?v=kPwzWGLmO5g

Dr. S. R. Shakya 38
 Modern Management Theories
• Modern management theories started after 1960s. The Modern
Period (1960 to present). After 1960, management thought has
changed somewhat away from the extreme human relations
ideas particularly regarding the direct relation between morale
and productivity.
• Modern management theory gives equal emphasis on man and
machine.
• Modern management theory focuses the development of each
factor of workers and organization.
• The formation of big companies resulted in the separation of
ownership and management. This change in ownership pattern
inevitably brought in ‘salaried and professional managers’ in
place of ‘owner managers’.

Dr. S. R. Shakya 39
 Modern Management Theories
• The giving of control to the hired management resulted in the
wider use of scientific methods of management.
• But at the same time the professional management has become
socially responsible to various sections of society such as
customers, shareholders, suppliers, employees, trade unions and
other Government agencies.
• Under school of modern management thought, three streams of
thinking have noticed since 1960:
1. Quantitative or Mathematical Approach
2. Systems Approach.
3. Contingency Approach

Dr. S. R. Shakya 40
 Modern Management Theories
Quantitative /Mathematical/Management Science Approach
• Mathematics has been universally recognized as an important tool
of analysis and a language for precise expression of concept and
relationship.
• This approach is also called Operation Research or Management
Science.
• This is a scientific method and emphasizes the use of statistical
model and systematic mathematical techniques & models to
solving complex management problems.
• Its helps the management to making decisions in operations.
• It can only suggest the alternatives based on statistical data.
• It cannot take final decision.

Dr. S. R. Shakya 41
 Modern Management Theories
Quantitative /Mathematical/Management Science Approach

https://www.businessmanagementideas.com/wp-
content/uploads/2016/08/clip_image002-12.jpg

Transportation/Scheduling
Decision Tree Analysis
Analysis

https://www.researchgate.net/publication/221024
279_The_Electromagnetism_Meta-
heuristic_Applied_to_the_Resource-
Constrained_Project_Scheduling_Problem/figure
s?lo=1

https://theinvestorsbook.com/decision-tree-analysis.html
Dr. S. R. Shakya 42
 Modern Management Theories
• It views management as a system of mathematical models and
processes.
• It provides the management a quantitative basis to improve their
decision making by increasing the number of alternatives and
giving faster decisions on any problem.
• Management can easily calculate the risk and benefit of various
actions.
• The main feature of this school is the use of mixed teams of
scientists from several disciplines.
• It uses scientific techniques for providing quantitative base for
managerial decisions.

Dr. S. R. Shakya 43
 Modern Management Theories
• Different mathematical and quantitative techniques or
tools are being increasingly used in almost all the areas
of management for studying a wide range of problems,
such as
– linear programming, transportation, decision theory,
simulation and queuing,.
• The exponents of this school believe that all the phases
of management can be expressed in quantitative terms
for analysis.
• However, it is to be noted that mathematical models
do help in the systematic analysis of problems, but
models are no substitute for sound judgment.
Dr. S. R. Shakya 44
 Modern Management Theories
• Moreover, mathematics quantitative techniques provide tools for
analysis but they cannot be treated an independent system of
management thought. A lot of mathematics is used in the field of
physical sciences and engineering but mathematics has never
been considered as separate school even in these fields.
• The contributions of mathematicians in the field of management
are significant. This has contributed impressively in developing
orderly thinking amongst managers. It has given exactness to the
management discipline. Its contributions and usefulness could
hardly be over-emphasized. However, it can only be treated as a
tool in managerial practice.

Dr. S. R. Shakya 45
 Modern Management Theories
Limitations
• Although this approach helps in defining and solving
complex problems resulting in orderly thinking and
rational decision making,
➢ the critics of this approach regard it as too narrow as it
is concerned merely with the development of
mathematical models and solutions for certain
managerial problems.

Dr. S. R. Shakya 46
 Modern Management Theories
Drawbacks of Quantitative/Mathematical Approach
1. This approach ignores the human element which plays a
dominant role in all organizations.
2. In actual life executives have to take decisions quickly without
waiting for full information to develop models.
3. The various mathematical tools help in decision making.
➢ But decision- making is only one part of managerial activities.
➢ Management has many other functions than decision-
making.
4. This approach supposes that all variables to decision making are
measurable and inter-dependent.
➢ This assumption is not realistic.

Dr. S. R. Shakya 47
 Modern Management Theories
5. Sometimes, the information available in the business
for developing mathematical models are not up to date
and sufficient and many assumptions have to be made
which may lead to wrong decision-making.
6. Harold Knootz observes that “it is too hard to see
mathematics as a separate approach to management
theory. Mathematics is a tool rather than a school.”

Dr. S. R. Shakya 48
 Modern Management Theories
System Approach
• In the 1960, an approach to management appeared which tried
to unify the prior schools of thought. This approach is commonly
known as ‘Systems Approach’.
• Its early contributors include Ludwing Von Bertalanffy, Lawrence
J. Henderson, W.G. Scott, Deniel Katz, Robert L. Kahn, W. Buckley
and J.D. Thompson.
• They viewed organization as an organic and open system, which
is composed of interacting and interdependent parts, called
subsystems.
• The system approach is to look upon management as a system or
as “an organized whole” made up of sub-systems integrated into
a unity or orderly totality.

Dr. S. R. Shakya 49
 Modern Management Theories
System Approach

https://www.toppr.com/guides/business-management-and-entrepreneurship/nature-of-management-and-its-process/development-of-management-theory/

Dr. S. R. Shakya 50
 Modern Management Theories
• System approach is based on the generalization that everything
is inter-related and inter-dependent.
• A system is composed of related and dependent element which,
when in interaction, forms a unitary whole.
• A system is simply an assemblage, amalgam or combination of
things or parts forming a complex whole.
• One of its most important characteristic is that it is composed of
hierarchy of sub-systems. That is the parts forming the major
systems and so on.
➢ For example, the world can be considered to be a system in
which various national economies are sub-systems.

Dr. S. R. Shakya 51
 Modern Management Theories
• In the systems approach, attention is paid towards the
overall effectiveness of the system rather than the
effectiveness of the sub-systems.
• The interdependence of the sub-systems is taken into
account.
• In applying system concepts, organizations are taken into
account and not only the objectives and performances of
different departments (sub-systems).
• Each industry is composed of firms
➢a firm can be considered a system composed of sub-
systems such as production, marketing, finance,
accounting and so on.

Dr. S. R. Shakya 52
 Modern Management Theories
• The systems approach is considered both general and
specialized systems.
• The general systems approach to management is
– mainly concerned with formal organizations and
– the concepts are relating to technique of sociology,
psychology and philosophy.
• The specific management system includes the analysis of
organizational structure, information, planning and control
mechanism and job design, etc.
• A system view point may provide the impetus to unify
management theory.

Dr. S. R. Shakya 53
 Modern Management Theories
• By definitions, it could treat the various management
approaches such as
– the process of quantitative and behavioral ones as sub-
systems in an overall theory of management.
– Thus, the systems approach may succeed where the process
approach has failed to lead management out of the theory of
jungle.

Dr. S. R. Shakya 54
 Modern Management Theories
Characteristics of System Approach
• A system consists of interacting parts.
• It is set of inter related and inter-dependent parts arranged in a
manner that produces a unified whole.
• The various sub-systems should be studied together rather than in
isolation from each other.
• An organizational system has a boundary that determines which
parts are internal and external.
• A system does not exist in a vacuum.
– It receives information, material and energy from other systems
as inputs.
– These inputs undergo a transformation process within the
system and
– leave the system as output to other systems.
Dr. S. R. Shakya 55
 Modern Management Theories
Evaluation of System Approach
• The systems approach assists in studying the functions
of complex organizations and has been utilized as the
base for the new kinds of organizations like project
management organization.
• It helps to unify different theories to be applied to
organization.
• It is possible to bring out the inter-relations in various
functions like planning, organizing, directing and
controlling.
• This approach has an edge over the other approaches
because it is very close to reality.
Dr. S. R. Shakya 56
 Modern Management Theories
• This approach is called abstract and vague. It cannot be
easily applied to large and complex organizations.
• Moreover, it does not provide any tool and technique
for managers.

Dr. S. R. Shakya 57
 Modern Management Theories
Contingency Approach
• This is the latest approach to the existing management
approaches. It is also known as Situational Approach.
• During the 1970’s, contingency theory was developed by J.W.
Lorsch and P.R. Lawrence, who were critical of other approaches
presupposing one best way to manage.
• Management problems are
➢ different under different situations and
➢ any one theory does not work to solve the organizational
problems.
➢ Therefore, require to be tackled as per the demand of the
situation.
• The contingency theory aims at integrating theory with practice
in systems framework. Dr. S. R. Shakya 58
 Modern Management Theories
Contingency Approach

https://www.fuste.pt/blog/poems-about-food-poverty/the-contingency-management-theory-and-management-theories.php

Dr. S. R. Shakya 59
 Modern Management Theories
• In 1980s, it is recognized as a key to effective management.
• This approach accepts the dynamics and complexities of the
organization structure.
➢ An organization is affected by its environment and
environment is composed by physical resources, climate,
persons, culture, economic and market conditions and their
laws.
• Theorists of all other approaches 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.

Dr. S. R. Shakya 60
 Modern Management Theories
• This approach argues that there is no one universally applicable
set of rules by which to manage organization.
• Contingency theory builds on the major premises of the 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 organizations, define objectives and
formulate policies and plans according to the prevailing
environmental conditions.
– Managerial policies and plans must respond to changes in
environmental conditions.

Dr. S. R. Shakya 61
 Modern Management Theories
• 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 organization,
– 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 organization with its environment.

Dr. S. R. Shakya 62
 Modern Management Theories
• 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 incorporated
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.
• Contingency views are ultimately directed towards suggesting
organizational designs situations. Therefore, this approach is also
called situational approach.

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 Modern Management Theories
Characteristics of Contingency Approach
• Firstly, 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.
• Secondly, managerial policies and practices to be effective, must
adjust to changes in environment.
• Thirdly, it should improve diagnostic skills so as to anticipate and
ready for environmental changes.

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 Modern Management Theories
• Fourthly, managers should have sufficient human relations skill
to accommodate and stabilize change.
• Finally, 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, programmes and practices. Thus,
contingency approach looks to hold a great deal of promise for
the future development of management theory and practice.

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 Modern Management Theories
Evaluation of Contingency Approach
• This approach takes a realistic view in management and
organization.
• It discards the universal validity of principles.
• Executives are advised to be situation oriented and not stereo-
typed. So executives become innovative and creative.
• On the other hands, this approach does not have theoretical
base.
➢ An executive is expected to know all the alternative courses
of action before taking action in a situation which is not
always feasible.

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 Thank you !
Email: shreerajshakya@ioe.edu.np

Dr. S. R. Shakya 67