MANAGEMENT THEORIES

EVOLUTION OF
MANAGEMENT- AN
OVERVIEW

1
Content
s
 Rationale of Studying Management Thought
 Early Milestones in Management
 Practices in Management
 Evolvement of Theories in Management
 Significance of Studying Management Thought

2
1.1. RATIONALE STUDYIN
OF MANAGEMENT G
THOUGHT
• Management has been around as long as there has been a
need for decision making. Even though scientific management
began and established itself in the early twentieth century,
references to planning and organization are found in ancient
Greek and Biblical literature, and in histories of the Roman
Empire. Imagine building ancient monuments such as the
Great Pyramid, and consider what that would have required in
terms of planning, work allocation, organizing, directing and
decision making.

• Management does not have a unique body of knowledge. The

theories and precepts of management have been adopted
from other disciplines and applied to real life situations, with a
clear focus on performance of managerial roles. 3
Conti
.
• Management has evolved and changed considerably over a
period of time. It has continuously adopted new theories and
practices and replaced old ones so as to make management
activity increasingly efficient. The universal theory of
management evolved in the early twentieth century has been
replaced by a number of contingency theories currently in
vogue. In the early twentieth century, the focus was on
physical factors, viewed from industrial, engineering and
economic perspectives. Subsequently, the focus shifted to
productivity, with an emphasis on human factors.

4
1.2. EARLY MILESTONES IN
MANAGEMENT
Many authors agree that there is evidence that effective
management of very complex social groups has existed for well
over 6,000 years.
It is obvious to the student that early civilizations such as the
Egyptians, the Greeks and even the Roman Empire could not
have existed for the centuries they did if it had not been for
some very well developed administrative organizations and
procedures. Even before these civilizations, there is reason to
believe that thought and efforts have been expended on
formulating a basic management process.
History and progress of management thinking
• Both theory and history are indispensable tools for managing
contemporary organizations.
• A theory is a conceptual framework for organizing
5
knowledge that provides a blueprint for various courses of
action
6
7
8
9
10
11
1.3. PRACTICES IN
MANAGEMENT
• Although the systematic study of management is
relatively new, essentially the product of the beginning of
the twenty-century, the concept and practice of
management is not new. had existed and
It practiced since the been of man’s
beginning
action and may be traced back to cooperative
the earliest records of
history.
• However, there are various evidence about the existence
of management practices in the antiquity.

12
Conti
. SUMERIANS:
• One of the earliest civilization know to man and
employed the concept of management is that of the
Sumerians. The famous contribution of Sumerians was
the development of a written language in response to
their need for managerial control was caps process
around 3000BC. For centuries writings were a managerial
tool for commerce, a matter of contract and bills of
shipments and receipts, an instrument of religious
records, an attempt to preserve magic formulas,
ceremonial procedures, scared legends, and prayers. All
these writing provide illustrations of managerial control
since 3000BC. 13
Conti
.
THE EXODUS OF ISRAELITES (BIBLE EVIDENCE)
• Additional evidence to illustrate the fact that interest in
management as a process existed in antiquity can be found in
the Bible. Exodus 18, verses 13 through 26, describes how
Jethro, who was Moses' father-in-law, provided Moses with
several recommendations which are the early forerunners of
our management concepts.
• For example, following some observations, Jethro advised
Moses that what he was doing was entirely too much for one
person and suggested several specific steps which should be
taken to relieve Moses of this burden. One of
recommendations was that, as the Bible his certain
14
ordinances and laws should be taught to the people.
says,
Conti
. • THE ANCIENT EGYPT:
• Structures: the Egyptians built great pyramids
from 500-525 BC. The pyramids were built with a
technology comparable with modern standards.
This indicates a mute testimony of the
managerial and organizational abilities of ancient
Egypt. Egyptians understood the importance of
planning, organizing, controlling, division of
labor, and the use of staff-advise as a valuable
means for constructing magnificent structures.
They also recognized and appreciated the values 15
of spelling our job description and assignment of
authority and responsibility.
Conti
.
• Government: The study of the Egyptian
government in the old, middle kingdom and in
the new empire illustrates how they applied the
principles of control. They exercised a highly
decentralized government from 2160-1788 BC
and a highly centralized government from 1530-
1050 BC.
•

16
Conti
.
• BABYLONIANS (200-1700 BC)
• The most significant contribution of the Babylonians was king
Hammurabi’s code. Which contained 285 laws, to keep peace
along the valleys of Tigris and Euphrates. These laws cover
personal property, family, real estate, and trade. The
Babylonians recognized some of the laws applicable to
business and guide managerial Look at the
decisions. following:-
• Developed control mechanisms:
• Introduced the concept of responsibility:
• Set minimum wage rate:
17
Conti
. • ROMANS
• Empire Structure: Romans had been able to
manage very large territory and people during
their time. They built such giant government and
military structure that were so successful and
operated for so many years. They gained control
over 50 million people extending from Great
Britain to Syria including Europe and North
Africa. They reinforced decentralized
government by centralized army as the most
effective way to organized and control their 18
colonies.
Conti
. • The Roman Catholic Church: This was the most
effective formal organization in the western
civilization and it has survived the test of time.
The church has made significant contributions
to management theories in the following areas.
• Hierarchy of authority
• Specialization of activities along the functional
lines and the development of the idea of job
descriptions.
• The staff concept was developed from the 19
advisory services performed by various
individuals and committees.
Conti
. • CHINESE:
• The Chinese also made contributions to
management thought. One of the most
famous is found in the ancient records of
Mencious and Chow written around 1100-
500 BC. It indicates that the Chinese were
aware of certain principles bearing on
planning, organizing, directing, and
controlling.
20
Conti
. • GREEKS:
• Greeks exhibit a real management skill and capacity in
the operation of trading companies. They introduced the
science and art of management. They recognized the
means to maximize output through the use of uniform
methods and motion study. They introduced standard
motions, rhythm system of work and work tempos in
harmony with music. Individuals, such as Xenophon
recognized management as a separate art in 400 BC.
Socrates showed the universality of management, the
importance of employee selection, specialization of
labor, and delegation of authority in 400BC. Plato also
described specialization further in 350BC. 21
1.4. EVOLVEMENT OF THEORIES
IN MANGEMENT
• The Industrial Revolution provided the
impetus for developing various
management theories and principles. Pre-
classical theorists like Robert Owen,
Charles Babbage, Andrew Ure, Charles
Dupin, and Henry R. Towne made some
initial contributions that eventually led to
the identification of management as an
important field of inquiry. This led to the 22

emergence of approaches to management.

Conti
.
• The schools of management thought are theoretical
frameworks for the study of management. Each of the schools
of management thought are based on somewhat different
assumptions about human beings and the organizations for
which they work. Since the formal study of management
began late in the 19th century, the study of management has
progressed through several stages as scholars and
practitioners working in different eras focused on what they
believed to be important aspects of good management
practice. Over time, management thinkers have sought ways
to organize and classify the voluminous information about
management that has been collected and disseminated. These
attempts at classification have resulted in the identification of 23
management schools.
24
1.5. SIGNIFICANCE OF
STUDYING MANAGEMENT
THOUGHT
• Management theory is important because it is
the study of how to make all the people in your
organization more productive. If you are self-
employed and have others working for you, or
you outsource certain jobs you are unable to do,
then you know how hard it is to find qualified
competent professionals to provide you a service
or work for you. You want to maximize labor
productivity and learning how to manage
people is key. 25
Conti
. • The key to business management is to maximise
productivity. However, while management theory
does aim towards getting a group of entities to
achieve a certain goal, it does not necessarily
achieve in making people more productive
towards this cause. Times are shifting rapidly and
the loss of key gurus, like Peter Drucker, in recent
times, bears certain implications. The key
contribution in having management theory lies in
what has been achieved by the differing schools
of thought within our history. This may serve as a
guide, but one must also bear in mind that
26
management is not just a science, but also an
• art.
Conti
. • There are many benefits to knowing
management theory. First of all management
theory doesn't just teach someone how inspire
employees to be more productive, it also shows
managers how to be good bosses. It is key for
them to know how to deal with issues that may
exist in the workplace. Managers have to
efficiently deal with these issues and
simultaneously maintain a stable or improving
level of productivity. With management, you
have to balance a multitude of tasks daily and 27
being familiar with management theory can help
greatly.
 CHAPTER TWO
FORERUNNERS TO SCIENTIFIC
MANAGEMENT

28
Content
s
• Early contributors to Scientific
Management
• Early works & Contributions of Charles
Babbage
• Times of Robert Owen & the
management era
• Other influential early thinkers &
Practitioners in Management

29
2.1 Early contributors to
Scientific Management:
• Many theorists and practitioners in pre-classical
the
period in the middle and late 1800s contributed valuable
ideas that laid the basis for subsequent,
broader into the nature of the management. Five
inquiries
principal pre-classical of
contributors
thought in the early era: Robert Owen, Charles
management
Babbage,
Andrew Ure, Charles Dupin and Henry Robinson Towne.

30
2.2 Early works & Contributions of Charles
Babbage:
• One of the fore-runners of scientific management was Charles
Babbage (1792-1871), Father of modern computing, an
English mathematician, and focused his on
efficiencies
attention of production.
• His first contribution stressed the importance of dividing and
assigning labor on the basis of skill. The second contribution
provided a means for determining the feasibility of replacing
manual operations with automatic machinery.

31
32
Conti
• The first contribution, the division of labor. In 1832,
. Charles Babbage wrote about the “economy of
machinery and manufacturers”. In this writing, he offered
convincing and complete data to show that the division
of labor by its level of skill, and the fact that learning
time is therefore reduced. Since any one worker has to
learn only one skill rather than all the skills, there is an
obvious advantage.
• Secondly, in regard to the actual process of
manufacturing, there is also a savings because less time
is lost as a result of changing from one set of skills to
another. Babbage was also quick to point out that a very
high degree of precision or specialization can be acquired 33
by each worker because that worker is learning only one
task and repeating it many times.
Conti
.• Another important point that Babbage noted was
that, since the job is broken down into various
components on the basis of skills required, he
observed that there is a possibility of developing
specialized tools and equipment to further aid
the process.

34
35
2.3 Times of Robert Owen & the
management era
• Robert Owen (1771-1858), a British Industrialist,
reformer, and was one of the first manager to
recognize the importance of an organization’s
human resource. Until his era, factory workers
were generally viewed in the same way that
machinery and equipment were. He was
primarily interested in employee morale

36
1

37
Management
Contributions
• Founded famous New Lanark Mills in Scotland.
• Was one of the foremost management thinkers
during the industrial revolution well before the
advent of the Scientific Management School
• Can be called World’s first enlightened (and
first personnel) manager and the Father of the
Cooperative Movement
• Established the Grand National Consolidated
Trade Union in 1834
38
Conti
.
• Stopped employing children below 10 in factories
• Reduced working hours from 14 to 10
• Built houses for workers with proper sanitation
• Nursery for children
• Showed higher wages increased profits through
higher
productivity
• Unique incentive schemes
• Informal workers participation in management

39
2.1.3 Other influential early thinkers &
Practitioners in Management:
• In addition to the above visionaries, there are few other
early pioneers.
• Andrew Ure (1778-1857), French engineer and was one
of the world’s first professor to teach
principles, at Anderson’s Colleger in Glasgow, during the
management
early seventeenth century.
• Charles Dupin (1784-1873), an academician soon follo
wed suit in France
• They were early proponents in the study of
management
• They published various papers regarding principles and 40
concepts of manufacturing.
Conti
.
• Henry R. Towne, (1844-1924), a mechanical engineer
Key ideas
• There is a need to consider management as a separate
field of knowledge
• His writings have influenced Henry Fayol's contributions
to the theory of management.

41
 Chapter-III
The Era of
Classical
Management

42
Contents

• Scientific Management Theory

• Classical organizational theory and Henry
Fayol.
• Bureaucratic management theory.
• Total appraisal of the classical theory.

43
Scientific Management
Theory
• Productivity emerged as a serious problem
during first years of this century. Business was
expanding and capital was readily available, but
labor was in short supply. Therefore, managers
begin to search for different ways to utilize the
existing labour more efficiently. In response to
this need, experts began to focus their research
on ways to improve the performance of
individual works and this leads to the
development of scientific management. 44
• Scientific is concerned with improving the
management
performance of individual workers. Some of the
earliest advocates of scientific management include:
• Fredrick Winslow Taylor (1856-1915)
• Henry L. Gantt (1861-1919)
• Frank Gilbreth (1868-1924) and Lillian Gilbreth (1878-
1972)
• These people have looked at determining the
scientifically best methods for performing any task, for
selecting, training and motivating workers. Among these
Taylor has played dominant role. 45
46
Scientific Management

• The systematic study of the relationships

between people and tasks for the purpose of
redesigning the work process for higher
efficiency.
• Defined by Frederick Taylor in the late
1800’s to replace informal rule of thumb
knowledge.
• Taylor sought(wanted) to reduce the
time a worker spent on each task by 47

optimizing the way the task was done.

Taylor ’s contribution to
management
 Frederick Winslow Taylor (20 March
1856- 21 March 1915), widely known as
F. W. Taylor, was an American
mechanical engineer who wanted to
improve industrial efficiency.
 He is regarded as the father of scientific
management, and was one of the first
management consultants.
 He is also called as “Father of Scientific
Management”. 48
SCIENTIFIC
MANAGEMENT
 It is the art of knowing what exactly you want
from your men to do & then seeing that it is
done in best possible manner.
 In simple words it is just an application of
science to management
Scientific Management
The systematic study of the relationships between
people and tasks for the purpose of redesigning
the work process to increase efficiency.

49
Taylor ’s view about
management
 Taylor believed that the industrial
management of his day was unprofessional,
that management could be formulated as an
academic discipline.
 Best results would come from the partnership
between trained and qualified management
and a cooperative and innovative workforce.
 Each side needed the other and there is no
need for trade unions.

50
Pr inciples of scientif ic
management
 Science not the rule of thumb: scientific
investigation should be used for taking
managerial decisions instead of basing
on opinion, institution or thumb rule.
 Harmony not discard/ cooperation
between employers and employees:
Harmonious relationship between
employees and employers. Cooperation
of employees that managers canensure
that work is carried in accordanc e with 51
standards.
CONTD
…
 Scientific selection training and
development of employees: selection
means to choose the best
employee according to the need. d
Their skill an experience must
match the requirement of the job.
 Scientific development refers to
criteria for promotions, transfers etc..
So that work is done with full
efficiency. 52
CONTD.
.. Division of work/ responsibility: The
responsibility of workers and
management should be properly divided
& communicated so that they can
perform them in an effective way and
should be reward for the same.
 Mental revolution: Acc. To Taylor, the
workers and managers should have
a complete new outlook; a mental
revolution in respect to their mutual 53
relations.
□ Workers should be considered as a
His principles
of management
The four principles of management.
1.The development of a true science.
2. The scientific selection of the workman.
3.The scientific education and development of
the workman.
4.Intimate and friendly cooperation between
the management and the men.


54
C R I T I C I S M F O R S C I E N T I F I C MANAGEMENT
 The main argument against Taylor is this
reductionist approach to work towards
dehumanizes the worker.
□ The allocation of work "specifying not
only what is to be done but how it is to
done and the exact time allowed for doing it"
is seen as leaving no scope for the
individual worker to excel or think.
 1. The belief that increased output would
lead to less workers.
 2. Inefficiencies within the management
control system such as poorly designed 55
How do today’s managers use
Scientific Management
 1. It was important because it could
raise countries’ standard of living by
making workers more productive and
efficient.
 2. Also it’s important to
remember that many of the tools
and techniques developed by the
scientific.

56
Applic atio n in the modern workplace

 Assembly Line Plants as Prototypical Examples

 “Prisoners of Taylorism”
 System of Remuneration (quotas - commission)
 Re-Design - Reengineering
 Benchmarking
 Data are used to refine, improve, change,
modify, and eliminate organizational processes
 Lean Manufacturing

57
Henry
Gannt
• Worked with Taylor at Midvale Steel
Company
• Specialized in incentive wage plans
• Introduced a differential piece rate
system – Task work with a bonus
• Permitted workers to improve the
production system
• Introduced a bonus for foremen based on
the number of their workers who earned
58
bonus
Gannt Chart
Information

• Developed to help industrial

age managers plan for mass
production
• Utilized to coordinate WWI
shipbuilding
• Visual display used to
schedule based on time

59
Frank and Lillian Gilbreth

-Associates of Fredrick
Winslow Taylor, their work
was intertwined with his and
their motion studies
predated Taylor’s system
first published in 1903.
-Developed the laws of
human motion from
which evolved the
principles of motion
economy
 Frank and Lillian Gilbreth

• Pioneers in the field of motion studies and provided the

foundation for job simplification, meaningful work, and incentive
wage plans.
• Analyzed each motion of work for wasted efforts in an attempt
to reduce each task to the smallest amount of expended time and
energy.
• Professed: effective training, effective work methods,
improved work environment, positive psychological
perspective.
• Made the connection between standardization and
efficiency
• Believed that time could not be separated from motion; the
two were intertwined.
 Frank and Lillian Gilbreth
 Systematically examined how repetitive tasks were
performed
 These repetitive tasks were broken down into Therbligs,
which are systems for analyzing the motions involved in
performing a task. This consisted of identification of
individual motions, as well as moments of delay in the
process, designed to find unnecessary or inefficient
motions and to utilize or eliminate even split seconds of
wasted time.
 Invented and refined Therbligs roughly between 1908 and
1924.
Each Therblig had a mnemonic symbol and standard
color for charting
Henri Fayol (1841-
1925)
Fayol’s Five Functions of Management
1. Forecasting and Planning
2. Organization
3. Command
4. Coordinate
5. Control
Fayol’s 14 Principles of
Management
1. Division of work – There will be specialists in
positions
2. Authority – over employees and in making
decisions
3. Discipline – obedience and respect is required
4. Unity of command – 1 supervisor per employee
5. Unity of direction – everyone working towards
the same goals
6. Subordination of individual interests to general
interests 64

• – the group comes before the individual

8. Centralization – how much power held by
specific managers is defined
9. Scalar chain – who reports to who is clearly
defined for everyone to see and communication
must follow
10. Order – everything has a specific place
11. Equity – everyone will be treated the same
12. Stability – personnel planning is necessary
13. Initiative – everyone should try their best
14. Esprit de corps – harmony and unity within 65

the organization needs to be built

Max
weber
 Weberian Model of Bureaucracy
 Division of Labor and
Specialization
 Impersonal Orientation
 Hierarchy of Authority
 Rules and Regulations
 Career Orientation

66
DEFINING
BUREAUCRACY

 What is Bureaucracy?
 A complex, hierarchically arranged
organization composed of many small
subdivisions with specialized functions
 Bureaucracy means “rule by administrative
system”
 Bureaucracy is complex
 Bureaucracy is hierarchical

67
CONCEPT AND CONTRIBUTION

 Communication and transportation policies

make more efficient administration possible

 Hierarchical organization

 Delineated lines of authority in a fixed area

of
activity

 Rules are implemented by neutral officials, not

the power elite
 Advancements depend on technical
68

qualifications from organizations not individuals

FUNCTION OF BUREAUCRATS

Five Functions of Bureaucrats

 Implement the law
 Provide expertise
 Provide research and information
 Quasi-judicial powers and responsibilities

69
70
BUREAUCRACY
 Hierarchy
 Division of Labor
 Authority
 Qualification
 Career Commitment
 Devotionto Purpose
 Advancement / Seniority

71
HIERARCHY
 Authority and its flow
 subordination
 “Such a system offers the governed the
possibility of appealing the decision of a
lower office to its higher authority”

72
DIVISION OF LABOR
Specialization
Separation of roles and duties
 “’higher’
authority [is not] authorized
to take over the business of the
‘lower’”

73
 Authority
Who has the right to make decisions
of varying importance at different
organizational levels

74
QUALIFICATIO
N
Training and qualification is the number one
requisite.
 How to manage
 How to carry out duties
 Knowledge of the rules

75
Career commitment
Both the employee and the
organization view themselves
committed to each other over the
working life of the employee

76
Rationality

 Theuse of the most efficient means available

to accomplish a goal.

77
Application in the modern workplace

 Large organizations guided by

countless rules are bureaucracies
 Linked with inefficient, slow-
moving organizations
 Organizations have several
characteristics of bureaucracies

78
LMITATIONS
□ His specific explanations for society
in his time are hard to generalize for
other circumstances in society

□ Failed to see all the positive aspects of

rationalization and deemed society to be
doomed and trapped in an “iron cage” of its
own making

□ Bureaucratic features of Weber’s ideal

society might actually be inefficient (argued 79
by Merton)
SUMMAR
Y
 Classical Theories of Organizations
 Taylor’s Theory of Scientific Management
 Weber’s Theory of Bureaucracy
 Two theories attempt to enhance
management’s ability to predict and
control the behavior of their workers
 Considered only the task function of
communication (ignored relational and
maintenance functions of communication)
 Designed to predict and control behavior
in organizations 80
 CHAPTER FOUR
THE HUMAN RELATIONS MOVEMENT

81
Contents
• Behavioural School
• Elton Mayo and the Behavioral Schools
• Pros and Cons of the Behavioral School
• The Hawthorn Study

82
BEHAVIOURAL
SCHOOL
• Itis also called Human Relations, Leadership
Behavioural Science Approach. It bears
or
existing the developed theories
and
methods of thenewly
relevantand
social sciences upon the
study of humanbehaviour ranging from
personality dynamics of individuals to the
relations of culture.

83
Features

• As management is the process of getting

things done by people, managers should
understand human behaviour.
• Emphasis is put on increasing productivity
through motivation and good human
relations.
• Motivation, leadership, communication,
participative management and group
84
dynamics are the central core of this
approach
Use
s
• It suggests how the knowledge of
human behaviour can be used in
making people more effective in the
organization. An individual’s
behaviour is not determined by
organization factors alone but also by
his attitude, pressure, conflicts of
cultural environment etc. Hence 85

these factors must be taken into

Pros and Cons of the Behavioral
School
• Pros:
• Behaviorism is based on observable behaviors, making
it easier to conduct and collect data and research.
• Can be applicable/helpful for therapy of children with
behavioral disorders
• Cons:
• Does not account for other ways of learning that do no
involve positive/negative reinforcement
• People can change their behavior when presented with new
information, even if they have previously established a
different behavior through reinforcement 86
 CHAPTER FIVE
THE MODERN ERA

87
Contents
• Characteristics of Modern Approaches to
Management
• System Approach
• The Quantitative Approach
• The Contingency Approach

88
Introduction
• Modern management approaches respect the
classical and human resource approaches to
management. However, successful managers
recognize that although each theoretical school
has limitations in its applications, each approach
also offers valuable insights that can broaden a
manager's options in solving problems and
achieving organizational goals. Successful
managers work to extend these approaches to
meet the demands of a dynamic environment. 89
Conti
.
• Modern theories tend to be based on the concept that the
organization is a system which has to adapt to changes in its
environment. In modern theory, an organization is defined as a
designed and structured process in which individuals interact for
objectives (Hicks and Gullet, 1975). The contemporary approach to
the organization is multidisciplinary, as many scientists from
different fields have contributed to its development, emphasizing
the dynamic nature of communication and importance of
integration of individual and organizational interests. These were
subsequently re-emphasized by Bernard (1938) who gave the first
modern and comprehensive view of management. Subsequently,
conclusions on systems control gave insight into application of
cybernetics. The operation research approach was suggested in
1940. It utilized the contributions of several disciplines in problem
solving. Von Bertalanffy (1951) made a significant contribution by
suggesting a component of general systems theory which is 90
accepted as a basic premise of modern theory.
 Characteristics of Modern Approaches to
•Management:
Modern management approaches recognize that people are
complex and variable. Employee needs change over time; people
possess a range of talents and capabilities that can be
developed. Organizations and managers, therefore, should
respond to individuals with a wide variety of managerial
strategies and job opportunities.
• Some of the notable characteristics of the modern approaches to
the organization are:
• A systems viewpoint
• A dynamic process of interaction
• Multileveled and multidimensional
• Multi-motivated
• Probabilistic
• Multi-disciplinary
• Descriptive
• Multivariable, and 91
• Adaptive
SYSTEM
APPROACH
• Organization is a system consisting of four
subsystems task, structure, people and environment
• Subsystems are interconnected and interdependent
• Management regulates and modifies the system
to optimize performance

92
SYSTEM
APPROACH
• LUDWIG VON BERTALANFFY IS RECOGNIZED AS THE FOUNDER
OF GENERAL SYSTEM THEORY

• SYSTEM: A system is a set of INTERRELATED but separate parts

working towards a common purpose.
• TYPES OF SYSTEMS:
• 1)Open system.
• 2)Closed system.

93
94
KEY
TERMS
• SUBSYSTEM : parts of system that depends on each other.
• Internal subsystem.
• External subsystem.
• SYNERGY : cooperation between subsystems.
• SYSTEM BOUNDARY: separation between internal and external
subsystems.

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COMPONENTS OF A
SYSTEM
 Inputs
 Transformation process
 Outputs
 Feedbacks
 environment

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• Subsystems have proper order and communication b/n them.
• Decisions are based on impacts on various subsystems

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LEVELS OF
SYSTEMS

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THREE FUNCTION SYSTEMS
MODEL
• • Benchmarking
• • Leadership
• • Employee involvement
• • Process involvement
• • Customer focus

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FEATURES OF SYSTEM
APPROACH
1. Dynamic
2. Adaptive
3. Multilevel and multidimensional
4. Managers will have a good view
5. Gives importance to interdependence of different parts
6. Forecasts consequences and plans actions

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ADVANTAGES and
DISADVANTAGES
ADVANTAGES
• Closeness to reality.
• The approach may be utilised by any of the other approaches.

DISADVANTAGES
• Complex when used in large organisations.
• Increased difficulty for managers

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102
Definition and
Classification
Definition
• Quantitative techniques are those statistical and programming
techniques, which help decision makers solve many problems,
especially those concerning business and industry
• Quantitative techniques are those techniques that provide the
decision makers with systematic and powerful means of
analysis, based on quantitative data, for achieving
predetermined goals
Classification
• 1) Statistique
Techniques
• 2) Programming 103
Techniques
• It is a mathematical technique for optimum allocation of
scarce or limited resources to several competing activities on
the basis of given criterion of optimality, which can be either
performance, ROI, cost, utility, time, distance etc.

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THANK YOU