• What is the Quantitative Approach to Management?

The quantitative
approach applies statistics, optimization models, information
models, computer simulations, and other quantitative techniques to
the management process. Central to the quantitative approach is the
principle that organizations are decision-making units
What are the essential features of quantitative
technique?
• Its main characteristics are:
• The data is usually gathered using structured research instruments.
• The results are based on larger sample sizes that are representative of the population.
• The research study can usually be replicated or repeated, given its high reliability.
• The researcher has a clearly defined research question to which objective answers are sought.
• All aspects of the study are carefully designed before data is collected.
• Data are in the form of numbers and statistics, often arranged in tables, charts, figures, or
other non-textual forms.
• Project can be used to generalize concepts more widely, predict future results, or investigate
causal relationships.
• The researcher uses tools, such as questionnaires or computer software, to collect numerical
data.
• Definition. Quantitative methods emphasize objective
measurements and the statistical, mathematical, or numerical
analysis of data collected through polls, questionnaires, and surveys,
or by manipulating pre-existing statistical data using computational
techniques.
• Additionally, how today's managers use the quantitative approach?
The quantitative approach has contributed directly
to management decision making in the areas of planning and control.
When managers make budgeting, scheduling, quality control, and
similar decisions, they typically rely on quantitative techniques.
• Here are some example of quantitative data:
• A jug of milk holds one gallon.
• The painting is 14 inches wide and 12 inches long.
• The new baby weighs six pounds and five ounces.
• A bag of broccoli crowns weighs four pounds.
• A coffee mug holds 10 ounces.
• John is six feet tall.
• A tablet weighs 1.5 pounds.
• (a) Management Science
• Management science theory is an approach to management that
focuses on the use of rigorous quantitative techniques to help
managers make maximum use of organizational resources to produce
goods and services. In essence, management science theory is an
extension of scientific management, which, as developed by Taylor, also
took a quantitative approach to measuring the worker-task mix to raise
efficiency. There are many branches of management science, and once
again, IT, which is having a significant impact on all kinds of
management practices, is affecting the tools managers use to make
decisions.
• Operations & production management: OPM focuses on the operation and control
of the production process that transforms resources into finished goods and
services. It has its roots in scientific management but became an identifiable area
of management study after World War II. It uses many of the tools of management
science.
• * Operations management emphasizes productivity and quality of both
manufacturing and service organizations. W. Edwards Deming exerted a
tremendous influence in shaping modern ideas about improving productivity and
quality. Major areas of study within operations management include capacity
planning, facilities location, facilities layout, materials requirement planning,
scheduling, purchasing and inventory control, quality control, computer integrated
manufacturing, just-in-time inventory systems, and flexible manufacturing systems.
• Quantitative management: Quantitative management utilizes
mathematical techniques—such as linear and nonlinear
programming, modeling, simulation, queuing theory, and chaos
theory—to help managers decide, for example, how much inventory
to hold at different times of the year, where to locate a new factory,
and how best to invest an organization’s financial capital. IT offers
managers new and improved ways of handling information so that
they can make more accurate assessments of the situation and better
decisions.
• Total Quality Management: Total quality management (TQM) is a philosophy or approach to
management that focuses on managing the entire organization to deliver quality goods and
services to customers. This approach to management was implemented in Japan after World
War II and was a major factor in their economic renaissance. TQM has at least four major
elements. Employee involvement is essential in preventing quality problems before they occur. A
customer focus means that the organization must attempt to determine customer needs and
wants and deliver products and services that address them. Benchmarking means that the
organization is always seeking out other organizations that perform a function or process more
effectively and using them as a standard, or benchmark, to judge their own performance. The
organization will also attempt to adapt or improve the processes used by other companies.
Finally, a philosophy of continuous improvement means that the organization is committed to
incremental changes and improvements over time in all areas of the organization. TQM has been
implemented by many companies worldwide and appears to have fostered performance
improvements in many organizations. Perhaps the best-known proponent of this school of
management was W. Edwards Deming.
• (b) Management Information System – MIS
• Management information systems (MIS) help managers design systems that provide
information about events occurring inside the organization as well as in its external
environment—information that is vital for effective decision making. Once again, IT
gives managers access to more and better information and allows more managers at all
levels to participate in the decision making process.
• All these subfields of management science, enhanced by sophisticated IT, provide tools
and techniques that managers can use to help improve the quality of their decision
making and increase efficiency and effectiveness.
• MIS focuses on providing needed information to managers in a useful format and at the
proper time. Decision support systems (DSS) attempt to integrate decision models, data,
and the decision maker into a system that supports better management decisions.
 Theory Contributors Area of application
Decision Theory R.M. Thrall, C.I. Bernard, H.A. Determination of objectives of firm,
Simon, N. Weiner assessment of group conflicts and
interaction, organization analysis
Inventory Control F.W. Harris, T. Harris, J.F. Economic lot size and inventory control
Magee
Game Theory J. Von Newman, Shubik Timing and pricing in a competitive
market, military strategy
Queuing Theory A. K. Erlang, L.C. Edie, P.M. Inventory control, traffic control, radio
Morse, M.G. Kendall communication, telephone trunking
system
Linear Programming W. Leontiff, G.B. Dantzig, P.A. Assignment of equipment and
Samuelson personnel, scheduling, input-output
analysis, product mix
Sampling Theory E. Deming, H.F. Dodge Quality control, Simplified accounting
and auditing, consumer surveys and
product preferences in marketing
research
Probability Theory R.A. Fisher, T.C. Fry, W. Feller Almost all areas of application
Statistical Decision Theory A. Wald, E.C. Molina, W. Estimation of model parameters in
Shewhart probabilistic models
Symbolic Logic G. Boole, B. Russell, A. N. Circuit design, legal inferen
Whitehead
Origin & Development of contingency
approach
• The Contingency approach is the outcome of research studies conducted by Tom Burns,
G.W.Stalker, John Woodward, Lawrence, Lorsch and others. Through their analysis they co-
related the structure of an organization to the surrounding environmental conditions. In the
Fifties of the last century Burns and Stalker (both from UK) analyzed the environments and
structures of several British and Scottish firms. In their pioneering work "Management of
innovation" (1968) and they identified two types of organizational structures-

• Mechanistic, and
• Organic;
• Against two categories of environment -
• Stable, and
• Dynamic.
• Elaborating this theory in their treatise "Organization and
Management of Health Care"(Main Contributor: Katie Enock, Public
Health Specialist, Harrow Primary Care Trust -
www.healthknowledge.org.uk) it is stressed that there is no 'one best
way' to structure an organization. An organization will face a range of
choices when determining how it should be structured. Successful
organizations adopt structures that are an appropriate response to a
number of variables, or contingencies, which influence both the
needs of the organization and how it works.
• Overall Contingency theorists have found that three contingencies are
particularly important in influencing an organization’s structure. These
are:
•* its size
•* the technology it uses
•* its operating environment.
Implications of contingency theory
• if there is no 'one best way', then even apparently quite similar
organisations, for example, two nearby colleges, may choose
significantly different structures and still survive, be reasonably
successful in achieving their missions, and so on
•* if different parts of the same organization are influenced in
different ways by the contingencies bearing upon them, then it may
be appropriate for them to be structured differently, for example, one
university department may have a functional structure, whilst another
may have a matrix structure
Popular contingency variables
• Organization size: As size increases, so do the problems of coordination.
• * Routine-ness of task technology: It requires organizational
structures, leadership style and control systems that differ from
customized technology.
• * Environmental uncertainty: Environmental changes influence the
management process, it being rapidly changing and unpredictable.
• * Individual differences: Each one is different in terms of their desire
for growth, autonomy, tolerance of ambiguity and expectation and
accordingly managers select motivation techniques style and designs
Basic principles of contingency theory
• Management is essentially situational. Consequently the techniques of management is contingent on the situation. If it
properly conforms to the demands of the environment, the technique is effective and fruitful. In other words the diversity
and complexity of the external situation with which the organization interacts alone should determine which measure or
technique is to be chosen to be effective.

• * Management should therefore adopt its approach and strategy in tune to the requirements of each particular
situation. Management policies and practices that spontaneously are responsive to environmental changes alone would
be effective. To meet this, the organization should design its structure, leadership style, and control systems should all be
oriented to the situation prevailing.

• * Since management effectiveness and success are directly related to its ability to cope up with the environment and to
the changes overtaking therein, it should sharpen its diagnostic skills to be proactive and to anticipate and comprehend
environmental changes.

• * In short the successful manager should recognize that there is no one best way or thumb rule to manage. They must
not consider particular management principles and techniques as applicable to all time and all needs. There are no
solution of universal applicability, as two situations may not be identical.
Bureaucratic Management Theory

Bureaucracy is an administrative system designed to

accomplish large-scale administrative task by
systematically co-ordinating the work of many individuals.
Bureaucratic management is a theory set forth by Max
Weber, a German sociologist and political economist. His
theory contained two essential elements:-structuring the
organization into a hierarchy and having clearly defined
rules for governing the organization and its members.
This approach also known as bureaucratic management
approach or Weberian bureaucracy.
Principles of Bureaucratic Management
• Works of specialization: It decomposed works into different kinds of simple, daily,
and detailed tasks.
•* Hierarchy of authority: Responsibilities and positions were organized by
hierarchy. Each low-grade position was monitored and controlled by the high-grade
position.
•* Formal selection: All organizational members were selected on the basis of
qualification of technique, which certified by training, education, formal
examinations.
•* Impersonality: When applying rules and regulations, it was required to avoid
involvement of character and personal preference.
•* Orientation of occupation: Managers were professional leaders. They worked
for steady salary and developed their careers within the organization.
Ideal Bureaucratic model
Advantages of Bureaucratic Management

•* Hierarchy of authority.
•* Employment is based on the technical efficiency.
•* Eliminate managerial inconsistencies.
•* A well understood system.
•* Maintain the consistency of working.
•* Rules and regulation of the duties are followed by the employees.
•* Records are kept for future references.
•* People are given authority according to their position in organization.
Limitations of Bureaucratic Management
• It emphasizes only in rules and regulations by ignoring human
element
• * Unnecessary delay will occur due to vast formalities
• * Coordination and co-operations will surely be hampered
• * Informal groups are ignored
• * Technical qualifications are emphasized rather than employee
commitment
• * It provides a window for ‘red-tapism’
• * It only can solve problems of traditional administrative systems
Hawthorne Experiments
Elton Mayo (1880-1949), the “Father of the Human Relations
Approach,” led the team which conducted a study at Western
Electric’s Hawthorne Plant between 1927 and 1933 to evaluate the
attitudes and psychological reactions of workers in on-the-job
situations. The researchers and scholars associated with the
Hawthorne experiments were Elton Mayo, Fritz Roethlisberger, T.N.
Whitehead and William Dickson. The National Research Council
sponsored this research in cooperation with the Western Electric
Company. The study was started in 1924 by Western Electric’s
industrial engineers to examine the impact of illumination levels on
worker productivity. Eventually the study was extended through
the early 1930s. The ground-breaking Hawthorne studies carried
out in the Hawthorne plant of the Western Electric Company (USA)
1927 - 32.
• Experiments
• Stage 1 (1924 -27) – ‘Illumination experiments’
• Study of the physical surroundings (lighting level) on productivity of workers. Control group and experimental
group previously had similar productivity before study began
• Control Group = constant lighting level
• Experimental Group = varied lighting level
• Result
• Both groups productivity increased - even when experimental group was working in dim light. Product leader
called Mayo and colleagues to explain

• Stage 2 (1927 - 29) - 'Relay assembly room stage'

• Still analyzing effect of physical surroundings (rest, pauses, lunch break duration, length of working week) on
output
• Result
• Output increased even when worsening conditions. Hypothesis was now that it was the attitudes of subjects
at work and not the physical conditions. This gave rise to the 'Hawthorne Effect' - employees were responding
not so much to changes in the environment as to the fact they were the centre of attention - a special group.
• Stage 3 (1928 - 30) – ‘Mass interviewing program’
• A Total of 20,000 interviews were collected with the workers on employee
attitudes to working conditions, their supervision and their jobs.

• Stage 4 (1932) - 'Bank wiring observation room'

• This time the new subjects (14 men) put in separate room for six months
• Result
• Productivity restricted due to pressure from peers to adopt a slower rate to
circumvent company wages incentive scheme to generally adopt own group
rules and behavior
 Pre-judgment Findings

Job performance depends on the individual The group is the key factor in job performance.
worker.

Fatigue is the main factor affecting output. Perceived meaning and importance of the work
determine output.

Management sets production standards. Workplace culture sets its own production
standards.
Summary of the Hawthorne Experiments
• Motivation: Employees are not motivated by only money (bonus scheme and
incentive).
•* Communication: By proper communication, management can easily
identified the problem faced by its employees and can easily solve out.
•* Social factors: Social factors are responsible for deciding the level of output.
•* Behavior of workers: workers are not as individual identity but as members
of a group in an organization and they have their own norms and beliefs.
•* Relationship: Employees do not like order and command. They want co-
operative attitude from their superiors.
•* Production level: Teamwork and Group psychology increases productivity.