Management is one or the other form has existed in every nook and corner of the world since the dawn of civilization. Modern Management has grown with the growth of social-economics and scientific institution. Modern view consists that a worker does not work for only money. They work for their satisfaction and happiness with good living style. Here Non- financial award is most important factor. Modern management theories started after 1950s. Modern management theory focuses the development of each factor of workers and organization. Modern management theory refers to emphasizing the use of systematic mathematical techniques in the system with analyzing and understanding the inter-relationship of management and workers in all aspect. It has following three Streams - Quantitative Approach, System Approach and Contingency Approach.
Quantitative approach also called Operation Research. Quantitative approach is a scientific method. It emphasizes the use of statistical model and systematic mathematical techniques to solving complex management problems. Its helps the management to making decisions in operations. It can only suggest the alternatives based on statistical data. It cannot take final decision.
Characteristics of Quantitative Approach:
* Decision-making focus - The primary focus of the quantitative approach is on problems or situations that require some direct action, or decision, on the part of management. * Measurable criteria - The decision-making process requires that the decision maker select some alternative course of action. The alternatives must be compared on the basis of some measurable criteria. * Quantitative model - To assess the likely impact of each alternative on the stated criteria, a quantitative model of the decision situation must be formulated. * Computers - Computers are quite useful in the problem-solving process.
* It helps the management for improving their decision making by increasing the number of alternatives and giving faster decisions on any problem thus the management can easily calculate the risk and benefit of various actions. * It has contributed significantly in developing orderly thinking in management which has provided exactness in management discipline. * Various Mathematical tools like sampling, linear programming, games theory, time series analysis, simulation, waiting line theory etc. have provided more exactness in solving managerial problems. * This approach is a fast developing area in analyzing and understanding management.
* Managerial activities are not really capable of being quantified because of involvement of human beings who are governed by many irrational factors also. * More expertise and technical skills are required to formulate mathematical models
Major contributors in Quantitative Approach are:
1. Johan MacDonald
2. George R. Terry
3. Andrew Szilagyi
System approach was developed in late 1960s. Herbert A. Simon is the father of system theory. A System is defined as a set of regularly interacting or interdependent components that create as a whole unit. The system concept enables us to see the critical variables and constraints and their interactions with one another. According to Cleland and King; “A system is composed of related and dependent elements which when in interaction from a unity whole”.
* Open systems must interact with the external environment to survive. * Closed systems do not interact with the environment.
Properties of Systems
* Synergy - When all organizational subsystems work together making the whole greater than the sum of its parts. * Entropy - The tendency for systems to decay over time.
Characteristics of System Approach:
* A system must have some specific components, units or sub units. * A change in one...