Chapter 2

Perspectives
in
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Management 1
 Management in Antiquity
D Greeks

C Babylonians G Venetians

B Egyptians E Romans

A Sumerians F Chinese

3000 B.C. 2500 B.C. 2000 B.C. 1500 B.C. 1000 B.C. 500 B.C. A.D.500 A.D.1000 A.D.1500

A Used written rules and regulations for governance E Used organized structure for communication and control

B Used management practices to construct pyramids F Used extensive organization structure for government
agencies and the arts
C Used extensive set of laws and policies for governance
G Used organization design and planning concepts to
D Used different governing systems for cities and state
control the seas

1/23/2012 1–2
 Early Management Pioneers

• Adam Smith
– A renowned economist
– Writer of the book – Wealth of Nations
(1776)
– Division of work for economic
advantage
– Increasing individual worker’s skill and
dexterity
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 Early Management Pioneers

• Robert Owen (1771–1858)

–British industrialist who was
one of the first managers to
recognize the importance
of human resources and
the welfare of workers.
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 Early Management Pioneers

• Charles Babbage (1792–1871)

–English mathematician who
focused on creating efficiencies of
production through the division of
labor, and the application of
mathematics
to management problems.

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 An Integrative Framework
of Management Perspectives
Systems Approach Contingency Perspective
• Recognition of • Recognition of the
internal situational nature of
interdependencies management
• Recognition of • Response to particular
environmental characteristics of situation
influences
Classical Behavioral Quantitative
Management Management Management
Perspectives Perspectives Perspectives
Methods for Insights for moti- Techniques for
enhancing vating performance improving decision
efficiency and and understanding making, resource
facilitating individual allocation, and
planning, behavior, groups operations
organizing, and and teams, and
controlling leadership

Effective and efficient management

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Approaches to Management theories:

• Different approaches to management theories evolved

• can be classified as:
1. Classical Theory
a. Scientific management theory
b. Administrative management theory
2. Behavioral Science Theory
3. Management Science Theory
4. Decision Theory
5. Systems Theory
6. Contingency Theory

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1. Classical Theory:
• emerged in the early year of the twentieth century to
increase efficiency and productivity due to evolution of large
scale business.
• constitutes the discipline & process of management in an
organization.
• also referred to as the traditional theory,
• includes two different approaches
i. scientific management
ii. administrative management

A. Scientific Management Theory:

• developed to increase productivity through labor
efficiency in
the early 20th century.
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1. Classical Theory (contd.) :
A. Scientific Management Theory (contd.) :
• prominent contributors of scientific management theory
were Frederick W. Taylor, Frank & Lillian Gilbert and Henry
Gantt.
• F.W. Taylor was the greatest contributor and played the
dominant role.

F.W.Taylor’s Scientific Management Theory:

• F.W Taylor known as the “Father of Scientific

Management”.
• worked at the Midvale steel company, Philadelphia and
Bethlehem Steel company, Pennsylvania.
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1. Classical Theory (contd.) :
A. Scientific Management Theory (contd.) :
F.W.Taylor’s Scientific Management Theory (contd.) :

• Observed (in these companies) that production & pay were

poor, inefficiency existed, wastage was high, workers put into
job without matching their abilities and the workers used
different techniques to perform the same work.
• realized that work efficiency was low due to lack of order and
system
• This led him to come out with “The principle of scientific
management” in 1911 A.D. in which the explained the
principles of scientific management.
• emphasized one best method of doing work to increase
efficiency & productivity.

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 A. Scientific Management Theory (contd.) :
F.W.Taylor’s Scientific Management Theory (contd.)
Taylor’s Principles:
concluded his studies by laying down certain principles :
Standardization
• referring to the speed & rate at which work should be done
• Using standard & right equipments and tools for the jobs.
• development of true science of doing work by studying the
nature of work and replacing rule of thumb.
Time and task study:
• required to determine one best method of doing work.
Systematic selection & Training:
• scientific selection of employees and providing proper training
and developing them to undertake the task assigned
• not letting workers choose the work but rather placing

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A. Scientific Management Theory (contd.) :
F. W.Taylor’s Scientific Management Theory (contd.)
Taylor’s Principles (contd.) :

Systematic selection & Training (contd.) :

right person on the right job.
Pay Incentives:
• referring to the increment in the payroll in accordance with
the amount of work done in order to increase productivity.(
paid according to piece produced)
• employees motivated by economic incentives
• greater pay for greater output and vice versa
Cooperation between managers and operatives:
• referring to harmony between the employer and employee to
accomplish work by dividing the work scientifically and
systematically.
• managers involved in planning the work, determining the
working procedure, time of doing work etc & supervising
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 A. Scientific Management Theory (contd.) :
F.W. Taylor’s Scientific Management Theory (contd.)
Taylor’s Principles (contd.) :

Cooperation between managers and operatives (contd.):

the employees
• employees executing the plans as per the instructions
• a mental revolution to be created by establishing
understanding between employer and employees

Taylor’s Followers:
1. Henry Gantt
• One of the followers of F.W. Taylor
• a mechanical engineer who worked as a close
associate of
Taylor at the Midvale steel company.
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 Scientific Management Theory (contd.) :
Taylor’s Followers (contd.):
1. Henry Gantt
• replaced Taylor’s differential piece rate system by combining a
guaranteed day rate (minimum wage) with an above standard
bonus.
• however, known for originating a Graphic chart (Gantt Chart)
as a scheduling device for planning & controlling work & this
is his contribution to scientific management.
• emphasized on the recognition of human factor and service
rather than profits.

2.Frank and Lillian Gilbert

• A team of husband and wife
• Frank a construction contractor and Lillian a psychologist who
too followed Taylor’s footsteps.
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Scientific Management Theory (contd.) :
Taylor’s Followers (contd.):
2.Frank and Lillian Gilbert
• used motion pictures to study hand and body motion by use
of micro chronometer that recorded the time to determine
the time spent on motion in doing a task.
• conducted motion and fatigue study with the (help of) brick
layering experiment
• suggested economical motion (decrease unnecessary
motions) to upgrade performance of each individual.
• Developed performance efficiency techniques (scientific
training, selection & development)
• Improved working conditions by redesigning various machines
& tools to fit people thereby reducing fatigue.
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Scientific Management Theory (contd.) :
Contributions:
developed performance efficiency techniques ( like scientific
training, selection, development etc.)
improved working conditions by redesigning various
machines
and tools to fit people for efficiency of work
emphasized over specialization and standardization for
smooth flow of work
Limitations
• viewed worker as undimensional beings interested in more
money and motivated them i.e. Men were considered as
machine.
• Assumed that environment of organizations were predictable,
stable & simple which is not realistic.
• focuses on production, ignoring other sectors of management
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no one best way of doing work 16
 2. Administrative Management Theory
• also referred to as the universalist or functional approach
• focuses on the management of total organizations
effectively; especially larger organizations
• assumes that management process remains the same across
all organizations
• Prominent administrative theorists are
Henri Fayol and Max Weber

Henri Fayol
• A French engineer, an industrialist as well as a successful
administrator in a French mining company
• Published a book in 1916 A.D. that was translated into
English in 1929, entitled “General and Industrial
Administration”
• conceptualizes management functions & principles for the
successful management of all types of organizations
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B. Administrative Management Theory
i. Henri Fayol (Contd.)
• believed that a manager's job could be divided into five
functions
planning
organizing
commanding essential for managerial success
coordinating
controlling
• also stated a series of principles of management to guide
managers resolve problems in a particular situation and carry
out their functional duties.

Functions of Management
• Emphasized that all managers must perform functions as
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 B. Administrative Management Theory
i. Henri Fayol (Contd.)
Functions of Management
1. Planning
Managers forecasting the events and developing an operating
plan to guide future decisions
2. Organizing
Determining appropriate combination of resources (machine,
material and human) to accomplish task.
3. Commanding
Directing the activities of subordinates through two-way
communication
4. Coordinating
Arranging and integrating group efforts towards unity of
action
5. Controlling
Ensuring actual activities are according to the plan
set
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 B. Administrative Management Theory (contd.)
i. Henri Fayol (Contd.)
• activities to be accomplished in industrial organizations:
1. Technical:
activities concerned with production.
2. Commercial:
activities like buying,selling and exchange functions.
3. Financial:
obtaining capital and optimum utilization of capital
4. Security:
protection of persons and property.
5. Accounting:
financial transactions recording.
6. Managerial:
activities of management like planning, organizing,
commanding and controlling
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B. Administrative Management Theory (contd.)
i. Henri Fayol (Contd.)

Principles of Management
1. Division of work
• specialization to increase output.
2. Authority
• the right flowing from responsibility.
3. Discipline
• follow rules and regulations (being obedient).
4. Unity of command
• report and receive orders from only one superior.
5. Unity of direction
• similar activities grouped under one plan and directed by one
superior.
• efforts focused and coordinated in same direction
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B. Administrative Management Theory (contd.)
i. Henri Fayol (Contd.)

Principles of Management
6. Subordination of individual interests to the general interest
• organizational interest must be given priority over individual
interest.
7. Remuneration
• fair wage service to the employees (performance based)
8. Centralization
• the final decision making power retained by the top level
• maintaining balance between centralization and
decentralization.
9. Scalar chain
• flow of work authority and communication in a chain from top to
bottom.
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B. Administrative Management Theory (contd.)
i. Henri Fayol (Contd.)

Principles of Management
10. Order
• resources kept in right place.
11. Equity
• just and fair towards subordinates.
• leads to devotion and loyal service
12. Stability of staffs
• reducing high absenteeism and turnover of staffs.( as people
need time to learn their jobs)
13. Initiative
• employees taking initiative and being creative.
14. Esprit de corps
• harmonious relation and promote team spirit
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B. Administrative Management Theory (contd.)
i. Henri Fayol (Contd.)

Conclusion
• argued management as a continuous process beginning with
planning and ending with controlling
• a framework for analyzing management process
• theory is useful as it specifies what managers should do [but
not why & how]
• Fayol's concept is a skeleton that is to be fleshed out
with
concepts, techniques and situational refinements

ii. Max Weber

• A German sociologist who developed a theory of authority
structure, the ideal model for management i.e. the
bureaucracy approach
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B. Administrative Management Theory (contd.)
ii. Max Weber
• Bureaucracy is efficient and effective way of
– division of labor,
– hierarchy of authority,
– framework of rules and regulations and
– impersonality

• Recommended bureaucratic organization model for doing

work in groups for large organization

• however recognized that it didn't exist in reality

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 Max Weber’s Theory
Features of Bureaucracy Structure
1. Division of Labor Complex work broken down into simple jobs

2. Hierarchy of Accepted chain of command to direct individual's effort

Authority towards organizational goal accomplishment

3. Framework of Rules Effort directed and coordinated by rules

4. Impersonality Hiring and promoting people on the basis of objective merit

rather than favoritism (on the basis of what they know, and
not who they know)

5. Formal Selection Technical competence members selected accordingly on the

basis of training, qualification, education etc.

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B. Administrative Management Theory (contd.)
ii. Max Weber

Conclusion
• Every systematically managed organization regardless of its
size and purpose has to some extent a moderate degree of
bureaucracy to enhance organizational efficiency
• However, taken too very high bureaucracy can hinder
efficiency far can hinder the efficiency
• The bureaucratic system, however, is a very rigid system to
be followed in practice

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B. Administrative Management Theory (contd.)

Contributions
 Foundation for the development of other management
theories
 Identified important management aspects as a frame of
reference and basis of management in organization
Limitations
 Prescribed universal procedures to be applied in organization
ignoring the situation, complexity and environment in which
organization operate
 Ignored the human element in the organization and viewed
them as tools.

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 Behavioral Perspective
• Hawthorne Studies
• Human Relations Movement
• Emergence of Organizational Behavior

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 Behavioral Management Perspective
• Behavioral Management
– Emphasized individual attitudes and behaviors, and
group processes, and recognized the importance
of behavioral processes in the workplace.
• Hugo Munsterberg (1863–1916)
– A German psychologist, considered the father of
industrial psychology, who advocated the practice of
applying psychological concepts to employees
selection and motivation industrial settings.
• Mary Parker Follett (1868 –1933)
– Recognized the importance of the role of human
behavior in the workplace.
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 2. Behavioral Science Theory (contd.)
A. Human Relations Approach (contd.)

The Hawthorne Studies (contd.)

 Illumination Programme
 Experiment carried out to study the relationship
between the intensity of light and productivity over a
selected group of employees
 result showed illumination did not affect output
 Relay Assembly Room Programme
 Manipulation of physical surroundings to study the
effect on productivity
 working conditions changed to observe its effect on
productivity
 concluded that team feeling, recognition and social
settings important for higher productivity
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2. Behavioral Science Theory (contd.)
A. Human Relations Approach (contd.)

The Hawthorne Studies (contd.)

 Mass Interviewing Programme
 20,000 workers interviewed to find out factors responsible
for human behavior at work
 social relations and interrelationship among employees
influenced the group to enhance performance
 Bank Wiring Observation Room Programme
 to find out the functioning of small
groups over individuals
 importance of informal group highlighted that set their
norms and protect the employees or workers

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 The Hawthorne Studies (1927–1932)

• Conducted by Elton Mayo and associates at Western

Electric
– Illumination study—workplace lighting adjustments affected
both the control and the experimental groups of production
employees.
– Group study—implementation of piecework incentive plan
caused production workers to establish informal levels of
acceptable individual output.
• Over-producing workers were labeled “rate busters” and under-
producing workers were considered “chiselers.”
– Interview program—confirmed the importance of human
behavior in the workplace.
– Bank Wiring Observation Room Program
14 workers were formed into a work group and observed for
seven months

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2. Behavioral Science Theory (contd.)
A. Human Relations Approach (contd.)
The Hawthorne Studies’ conclusion:
• Productivity was much affected by the attitudes of the worker
(Relationship between members of a work group and
between members and their supervisors) rather than working
condition and incentive plan (like hours of work, wage
incentives, etc.)
• the informal work group formed at the work places,
determined the worker behavior by setting the group norms,
standard worker output, hierarchy of member, creating group
security and group sentiments, thereby exercising strong
control over the behavior of the workers
• emphasized more on humanistic and realistic view of social
man from economic man
• Group or social factors played a dominant and significant role
in the functioning of the organization in achieving their goals,
since it provided the members the feeling of acceptance and
dignity and satisfied employees
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 Behavioral Management Perspective (cont’d)
• Human Relations Movement
– Grew out of the Hawthorne studies.
– Proposed that workers respond primarily
to the social context of work, including
social conditioning, group norms,
and interpersonal dynamics.
– Assumed that the manager’s
concern for workers would lead to
increased worker satisfaction and
improved worker performance.

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 The Human
Source: Van Fleet, David D.,
Relations View of Contemporary Management,
Management Second Edition. Copyright ©
1991 by Houghton Mifflin
Company.
Used with permissions.

1/23/2012 36
 Behavioral Management Perspective
(cont’d)
• Abraham Maslow
– Advanced a theory that employees are motivated
by a hierarchy of needs that they seek to satisfy.
• Douglas McGregor
– Proposed Theory X and Theory Y concepts
of managerial beliefs about people
and work.

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 Need Hierarchy Theory
• Unlimited needs – when one need is fulfilled,
another arises
• Unfulfilled needs creates anxiety which leads
to motivation
• Needs arise in order
– Classification of needs:

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 Classification of Needs:
Self Desire to become what one is
Actualization capable of
Needs

Self respect, autonomy, etc.

Esteem
Needs
Affection, acceptance,
friendship
Social
Needs Physical, financial, psychological

Security
Needs Food, shelter, clothing, sex,
maternal need.
Physiologica
1/23/2012 l Needs 39
1/23/2012 40
 Theory X and Theory Y
• Developed by Douglas McGregor
• Theory X Assumptions
– People do not like work and try to avoid it.
– People do not like work, so managers have to
control, direct, coerce, and threaten employees to
get them to work toward organizational goals.
– People prefer to be directed,
to avoid responsibility, and
to want security; they have
little ambition.
Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960
by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies.
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 Theory X and Theory Y (cont’d)
• Theory Y Assumptions
– People do not dislike work; work is a natural part of
their lives.
– People are internally motivated to reach objectives to
which they are committed.
– People are committed to goals to the degree that they
receive rewards when they reach their objectives.
– People seek both seek responsibility and accept
responsibility under favorable conditions.
– People can be innovative in solving problems.
– People are bright, but under most organizational
conditions their potentials are underutilized.

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 Two Factor Theory
• Developed by – Frederick Herzberg for work
motivation.

• Hygiene Factors = Dissatisfaction vs no

Dissatisfaction

• Motivation Factors = No satisfaction vs

Satisfaction
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 Organizational Behavior
• A contemporary field focusing on behavioral
perspectives on management.
– Draws on psychology, sociology, anthropology,
economics, and medicine.
• Important topics in organizational behavior
research:
– Job satisfaction and job stress
– Motivation and leadership
– Group dynamics and organizational politics
– Interpersonal conflict
– The structure and design of organizations

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 Behavioral Management
Perspective…Today
• Contributions
– Provided important insights into motivation,
group dynamics, and other interpersonal
processes.
– Focused managerial attention on these critical
processes.
– Challenged the view that employees are tools
and furthered the belief that employees are
valuable resources.

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 Behavioral Management
Perspective…Today (cont’d)
• Limitations
– Complexity of individuals makes behavior difficult
to predict.
– Many concepts not put to use because managers
are reluctant to adopt them.
– Contemporary research findings are not often
communicated to practicing managers in an
understandable form.

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Quantitative Perspectives

Management Science
Operations Management
 Quantitative Perspectives
• Developed during World War II
• Mathematicians, Physicists, and Other
Scientists helped in war techniques
• Quantitative approach to management
involves use of quantitative techniques like:
– Statistics
– Information models
– Computer simulations etc.

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 Management Science
• Primarily concerned with decision making.
• Emphasis on application of mathematics and
statistics for decision making and problem
solving.
Techniques of Management Science:
• Linear Programming
• Game Theory
• Sampling Theory
• Probability Theory
• Simulation etc.

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 Operations Management Theory
• Concerned with managing the process of
converting the inputs (raw-materials) into
outputs (finished products)
• Concerned with quality, customer service and
competition.
Techniques of Operations Management:
• Quality Control
• Total Quality Management
• Just In Time Technique
• Six sigma etc.

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 Quantitative Management
Perspective
• Contributions
– Developed sophisticated quantitative techniques to
assist in decision making.
– Application of models has
increased our awareness
and understanding of
complex processes and
situations.
– Has been useful in the
planning and controlling
processes.

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 Quantitative Management
Perspective
• Limitations
– Quantitative management cannot fully explain or
predict the behavior of people in organizations.
– Mathematical sophistication may come at
the expense of other managerial skills.
– Quantitative models may require
unrealistic or unfounded assumptions,
limiting their general applicability.

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 Integrating
Perspective
s
• Systems Perspective
• Contingency Perspective

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 System Perspective (Theory)
• A system is a set of inter-related and inter-
dependent parts, arranged in such a way that
produces a unified whole.

Feedback of
System

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 Elements of Systems Theory
• Goal Orientation
• Subsystem
• Synergy
• System boundary
• Flow
• Feedback
• Open or closed

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 Contributions and Limitations
• Contributions of system theory:
– Provides conceptual framework for meaningful
analysis and management of an organization
– Emphasis on interrelations- interdependence
– Helps in problem solving
– It integrates various management theories by
emphasizing on physical aspect, behavioral
aspect, and environmental aspect

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 Limitations of Systems Theory
• Too abstract and difficult to apply
• Does not offer tools and
techniques
• It does not offer unified body of
knowledge.

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 Contingency Perspective (Theory)
• The theory focuses on situational factors.
• Main logic behind the theory:
– There is no one best method in all different
situations
• The best method to solve a problem
varies according to situation.
• Every organization is unique.
• There are four contingency variables that
determine management Practice:
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 Four Contingency Variables

• Organization size
• Routineness of Task
Technology
• Environmental
Uncertainty
• Individual
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 Contributions and Limitations:
• Contributions of Contingency Theory:
• Encourages innovation in problem
solving
• Requires the use of analytical, critical,
and multidimensional techniques
• Increased freedom to managers
• Required managers to be more sensitive
and alert
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Limitations of Contingency Theory
• Ignores universally applicable
principles
• Fails to enlist all contingency
variables
• Focuses only on situation and not on
tools and resources
• It ignores human behavioral aspects.
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 Emerging Management Issues and
Challenges
• Globalization
• Development of Environmentalism
• Quality and Productivity
• Ethics and social responsibility
• Workforce diversity
• Innovation and change
• Empowerment of employees
• Knowledge management
• Technological development
• Multicultural effects

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 Chapter 2: Outline
• Precursors:
– Management in Antiquity
– Early Management Pioneers
• Classical Perspective:
– Scientific Management: F.W. Taylor
– Administrative Management: Hanri Fayol
– Bureaucracy : max Weber
• Behavioral Perspective:
– Hawthorne studies, Human Relations Movement, Organizational Behavior
• Quantitative Perspective:
– Decisional Theory and Management Science and Operation Science Theory
• Integrating Perspective:
– System and Contingency Perspective
• Emerging Management Issues and Challenges

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 Thank You
Chapter Finish
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