MGT 541: Emerging Concepts in Management

Unit 1
The Nature of Organization and Management

Presented by:
Bal Ram Chapagain
August 15, 2017 balram.chapagain@gmail.com 1
August 15, 2017 balram.chapagain@gmail.com 2
 Concept of Organization
An organization is defined as a group of people who
combine their resources and efforts to achieve some
common goals.
Wherever they live, whatever they do, organizations
are part of peoples everyday lives.
Organizations, however, differ in their size and nature.
It may be large or small, formal or informal, profit-
making or not-for-profit and so on.

August 15, 2017 balram.chapagain@gmail.com 3

Concept of Organization
Customers

ORGANIZATION:
Group of
PEOPLE performing
various ACTIVITIES
with deliberate
STRUCTURE in order
to achieve some
common GOALS

Competiors

August 15, 2017 balram.chapagain@gmail.com 4

Characteristics of Organization
Group of People
Various Activities
Deliberate Structure
Goal Orientation
Coordination of Efforts
Transformation Process
Influence of Environment

August 15, 2017 balram.chapagain@gmail.com 5

Types of Organization
Types of Organization Based on their Primary Objectives
S.N. Types Primary Objective Common Examples
1. Business Earn profit Banks, Airlines, Restaurants, Transport Services,
Organizations Newspapers, Textiles, Departmental Stores etc.
2. Government Satisfy public needs Government Ministries, Government Departments
Organizations and Police Offices, Municipalities etc.
3. Service Render service Public Schools & Hospitals, Charities, Social
Organizations welfare agencies etc.
4. Political Influence public Political parties and their sister organizations
Organizations policies and practices
5. Religious Promote spiritual Churches, Monastery, Temples and allied
Organizations belief organizations
6. Associative Satisfy members Labor unions, Cubs, Cooperatives etc.
Organizations needs
7. Professional Protect and promote Management Association of Nepal, Nepal
Organizations professional rights Engineers Association, Nepal Bar Association etc.
and interests
8. International Promote collective World Trade Organization (WTO), United Nations
Organizations interests of member Development Organization (UNDP), European
countries and the Union (EU), South Asian Association for Regional
world at large Cooperation (SAARC) etc.
August 15, 2017 balram.chapagain@gmail.com 6
 Concept of Management
The term management has variety of applications and
interpretations.
However, simply stated, management is what managers
do.
It involves planning, organizing, leading and controlling
human and other resources in the best possible way in
order to achieve desired or stated organizational goals.
Thus the key aspects of management are efficiency (i.e.,
optimum utilization of resources) and effectiveness (i.e.,
attainment of goals).
August 15, 2017 balram.chapagain@gmail.com 7
 Concept of Management

Planning

Organizing
GOALS
Controlling
& Staffing

Leading
August 15, 2017 balram.chapagain@gmail.com 8
Characteristics of Management
Group Activity
Continuous Process
Optimum Utilization of Resources
People as a Key Resource
Goal Orientation
Pervasive function
Dynamic and Situational
Both Science and Art
Profession
Separate discipline
August 15, 2017 balram.chapagain@gmail.com 9
Functions of Management

Functions of
Management

A. Main/ Basic Functions B. Subsidiary Functions

1. Planning 1. Decision Making
2. Organizing & Staffing 2. Motivation
3. Leading 3. Communication
4. Controlling 4. Supervision, etc.

August 15, 2017 balram.chapagain@gmail.com 10

 Approaches to Management
(Evolution of Management Thoughts)

Approximate Before 1900 1900s-1920s 1930s-1940s During 1940s During 1950s 1960s- 1990s 2000s- Till date
Time Frame AD
Theories/ Early Classical Behavioral Management Systems Contingency Evidence-based
Approaches Contributions Science
Main F. W. Taylor, Elton Mayo, A. Statisticians & Chester Tom Burns, Jeffrey Pfeffer
Contributors Egyptians, H. Fayol, and Maslow, Mc. Mathematicia Bernard, G. M. Stalkar, and Robert I.
Chinese, Max Weber Gragor etc. ns during Ludwig Paul Sutton
Adam Smith etc. world war II Bertalanffy Lawrence,
etc. etc. Jay Lorsch
Central Systematic Achieving Socio- Use of Organizations Best way of Decisions and
theme approach as high Psychological mathematical as open (or doing things actions should be
opposed to efficiency & aspects of models in closed) is determined based on
trial-and-error productivity human at work solving systems by the empirically tested
management situation evidence rather
problems than on logic

August 15, 2017 balram.chapagain@gmail.com 11

Modern Approaches to Management

1. Systems Theory/ Approach

2. Contingency Theory/ Approach
3. Evidence-based Management/ Approach

August 15, 2017 balram.chapagain@gmail.com 12

Systems Theory
Developed during 1950s by Chester Bernard, Herbert
Simon, Robert Weinus and Ludwig Bertalanffy.
According to this theory, organizations are systems
having input-process-output components.
External Environment

Inputs (Resources) Transformation Process Outputs

Human Planning Products
Physical Organizing & staffing Services
Financial Leading Profits
Informational Controlling Satisfaction etc.

Feedback

August 15, 2017 balram.chapagain@gmail.com 13

Systems Theory
Furthermore, they are mostly the open systems and
thus influenced by the external environment.
Any organizational system has different interdependent
sub-systems within its system.
For instance, a manufacturing company itself is a
system having different interdependent subsystems
such as production, human resource management,
finance and marketing.
Thus, managers are required to anticipate the
consequences of certain decisions & actions not only
on their own subsystem but also in other subsystems
within the organizational system.
August 15, 2017 balram.chapagain@gmail.com 14
Systems Theory
Following are the important features of organizations
from systems perspective.
Goal orientation
Sub-systems
Open and closed systems
Synergy
Flow
System boundary
Feedback

August 15, 2017 balram.chapagain@gmail.com 15

 Contingency Theory
Paul Lawrence and Jay Lorsch (USA), and Tom Burns
and G. M. Stalker (UK) popularized this theory though
it was emerged from the experiences of many other
managers and practitioners in the field.
According to this theory, there is no only one best way
of doing things or managing resources. It depends
upon situational characteristics or contingencies.
For instance, there is no one best way to provide
effective leadership and motivate people.
Managers are required to identify individual differences
first, and then apply appropriate approach or style to
lead and motivate people.
August 15, 2017 balram.chapagain@gmail.com 16
Contingency Theory
Application of contingency theory involves:
Identifying the contingency/situational variables (such as the
size of the firm, degree of environmental uncertainty, individual
differences, type of technology etc.);
Evaluating them; and
Applying appropriate technique in managing people and
other resources
Classical theories believe that there are universally
accepted principles/guidelines to best manage people
and other resources.
Whereas contingency theory believes that there are
many ways to manage the appropriateness of certain
approach depends upon the prevailing situation.
August 15, 2017 balram.chapagain@gmail.com 17
 Evidence Based Management
Contingency theory assumes that there is no only one best way
of doing things or managing resources it depends upon
situation.
The premise of contingency theory is true but it is based on
generalized impressions. For example, large organizations
require high degree of decentralization.
Evidence-based management (EBM) is one step ahead in this
direction.
It believes that there are different ways of doing things, but
the best way is the one which is evidence-based, i.e.,
empirically tested in a particular context.
The credit to this approach goes to Harvard professors Jeffrey
Pfeffer and Robert I. Sutton.
August 15, 2017 balram.chapagain@gmail.com 18
Evidence Based Management
Best available Managerial expertise
scientific evidence and judgement

Evidence-based
decisions and
actions

Organizational facts Stakeholders' value

and characteristics and concerns

August 15, 2017 balram.chapagain@gmail.com 19

August 15, 2017 balram.chapagain@gmail.com 20
August 15, 2017 balram.chapagain@gmail.com 22