MODULE 1- CONTEMPORARY

THEORIES
By – Prof. Pavankumar R.
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THEORIES OF MANAGEMENT -
CONTEMPORARY MANAGEMENT APPROACHES

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 Contemporary management approaches
 It is a class of behavioral theory that claims that
there is no best way to organize a corporation, to
lead a company, or to make decisions.
 Instead, the optimal course of action is
contingent (dependent) upon the internal and
external situation.
 The contemporary approaches to management
include:
 1.The Systems Theory
 2.The Contingency Theory
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THE SYSTEM THEORY

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 The view of organizations as open social systems
that must interact with their environments in
order to survive is known as the systems theory
approach.

 System theory provides approach to

understanding, analyzing and thinking about
organizations

 Systems theory views an organization as an

organism made up of numerous parts
(subsystems) that must work together in
harmony 3
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MEANING OF SYSTEM

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 A system is a set of inter connected and inter
related elements or components parts which are
arranged in order to operate together to achieve
certain goals.
 One of the most important characteristics of a
system is that it is composed of hierarchy of sub-
systems.
 For Example: The major system of national
economy has various industries as sub systems.

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DEFINITION OF A SYSTEM

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 Richard A Johnson defined “a system is an
organized or complex whole, an assemblage or
combination of things or parts forming a complex
unitary whole”.

 Manmohan Prasad defined, “a system is an

established arrangement of components which
leads to the accomplishment of particular
objective as per plan”.

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PARTS OF A SYSTEM

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 A system has three parts:
 Input: A system is operated to achieve the
specified objectives. The nature of input is based
on the objectives to be achieved. Hence the inputs
may be raw materials or information.
 Process: A mechanical process is carried on to
convert the shape or form of raw materials. An
information is to be interpreted and analyzed in a
systematic way to get clear idea or conclusion.
 Output: The input raw materials is available as
finished goods in output. The input of
information is available as alternatives or
conclusions in output. 6
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KINDS OF SYSTEM

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 The are four types of system:
1. A Closed System:
 a system is operated without any interaction from the
outside environment.
 The closed system does not require any element from
outside to operate.
 The closed system approach was represented by
principles such as unity of command, span of control
and equal authority and responsibility and
concentrated on internal relationship and
consistency.
 The closed system approach ignores the effect of the
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external environment.
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KINDS OF SYSTEM

Pavankumar R.
Module 1- Principles of Management | By: Prof.
2. A Open System:
 The operation of a system is dependent on the
external environment for survival.
 All organization systems depend upon the external
environment for feedback, resources and for supply of
finished goods.
 The management must analyze the external factors
of resources availability, current technology, trends,
market trends and social changes.

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KINDS OF SYSTEM

Pavankumar R.
Module 1- Principles of Management | By: Prof.
3. General System:
 The general system approach to management has a
relation with formal organization and technical socio-
psychological and philosophical concepts.

4. Specialized Systems:
 The specialized system includes the area of
organization structure, job design, computerized
information.
 The system analysts are required to have the
knowledge about modern organization concepts due
to actual occupation position
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ELEMENTS OF SYSTEM APPROACH

Pavankumar R.
Module 1- Principles of Management | By: Prof.
1. An organization is a unified and a purposeful
system. It consists of several interconnected and
interdependent parts.
2. The parts and sub-parts of a system have
mutual relationship with each other . The
nature of mutual relationship may be more or
less, direct or indirect. Therefore a change in
one part affects on the other parts according to
nature of relationships.
3. An organization system has a boundary that
determines which parts are internal and which
are external. 10
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ELEMENTS OF SYSTEM APPROACH

Pavankumar R.
Module 1- Principles of Management | By: Prof.
4. The parts and sub-parts of a system are
arranged in an orderly manner. The reason is
that system approach is oriented towards the
accomplishment of objectives.
5. A sub- system gets its strength by its
association and interaction with other sub-
systems. As a result, the contribution of whole
organization is greater than aggregate or
individual contribution of its sub-system.
6. System transforms input into outputs. This
transformation has three process. They are
inputs, mediator and outputs. 11
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ELEMENTS OF SYSTEM APPROACH

Pavankumar R.
Module 1- Principles of Management | By: Prof.
7. The reaction of the outputs environment is
known as feedback. Feedback is useful in
evaluating and improving the functioning of the
system.
8. The attention is paid towards the overall
performance of the system rather than the sub-
systems.

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FEATURES OF MANAGEMENT AS SYSTEM

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 (i) A system consists of interacting elements. It is
set of inter-related and inter-dependent parts
arranged in a manner that produces a unified
whole.

 (ii) The various sub-systems should be studied in

their inter-relationships rather, than in isolation
from each other.

 (iii) An organizational system has a boundary

that determines which parts are internal and 13
which are external.
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FEATURES OF MANAGEMENT AS SYSTEM

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 (iv) 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 a system and
leave the system as output to other systems.

 (v) An organization is a dynamic system as it is

responsive to its environment. It is vulnerable to
change in its environment.

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EVALUATION OF SYSTEM APPROACH:

Pavankumar R.
Module 1- Principles of Management | By: Prof.
 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 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.
 It cannot be easily applied to large and complex
organizations. Moreover, it does not provide any
tool and technique for managers. 15
THE SYSTEMS APPROACH TO MANAGEMENT

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IS DIAGRAMMATICALLY REPRESENTED AS
FOLLOWS:

Pavankumar R.
Module 1- Principles of Management | By: Prof.
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 Module 1- Principles of Management | By: Prof.
11/7/2022
Pavankumar R.
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THANK YOU