Definition of Management

According to Henri Fayol, "to manage is to forecast and to plan, to organise, to command, to co-ordinate and to control."

Fredmund Malik defines it as "the transformation of resources into utility."

Important Characteristics or Features of Management

1. Management is goal oriented process:

Management always aims at achieving the organisational objectives.

The functions and activities of manager lead to the achievement of organisational objectives; for example, if the objective of a company is to sell 1000 computers then manager will plan the course of action, motivate all the employees and organise all the resources keeping in mind the main target of selling 1000 computers.

2. Management is Pervasive:

Management is a universal phenomenon. The use of management is not restricted to business firms only it is applicable in profit-making, non-profit-making, business or non-business organisations; even a hospital, school, club and house has to be managed properly. Concept of management is used in the whole world whether it is USA, UK or India.

3. Management is Multidimensional:

Management does not mean one single activity but it includes three main activities:

i. Management of work

ii. Management of people

iii. Management of operations

(a) Management of work:

All organisations are set up to perform some task or goal. Management activities aim at achieving goals or tasks to be accomplished. The task or work depends upon the nature of Business for example, work to be accomplished in a school is providing education, in hospital is to treat patient, in industry to manufacture some product. Management makes sure that work is accomplished effectively and efficiently.

(b) Management of people:

People refer to Human resources and Human resources are the most important assets of an organisation. An organisation can win over competitor with efficient employees only because two organisations can have same physical, technological and financial resources but not human resources. Management has to get task accomplished through people only.

Managing people has two dimensions:

(i) Taking care of employee’s individual needs

(ii) Taking care of group of people

(c) Management of operations:

Operations refer to activities of production cycle such as buying inputs, converting them into semi-finished goods, finished goods.

Management of operations concentrates on mixing management of work with management of people, i.e., deciding what work has to be done, how it has to be done and who will do it.

4. Management is a continuous process:

Management is a continuous or never ending function. All the functions of management are performed continuously, for example planning, organising, staffing, directing and controlling are performed by all the managers all the time. Sometimes, they are doing planning, then staffing or organising etc. Managers perform ongoing series of functions continuously in the organisation.

Management always refers to a group of people involved in managerial activities. The management functions cannot be performed in isolation. Each individual performs his/her role at his/her status and department, and then only management function can be executed.

Even the result of management affects every individual and every department of the organisation so it always refers to a group effort and not the individual effort of one person.

6. Management is a dynamic function:

Management has to make changes in goal, objectives and other activities according to changes taking place in the environment. The external environment such as social, economical, technical and political environment has great influence over the management.

As changes take place in these environments, same are implemented in organisation to survive in the competitive world.

7. Intangible:

Management function cannot be physically seen but its presence can be felt. The presence of management can be felt by seeing the orderliness and coordination in the working environment. It is easier to feel the presence of mismanagement as it leads to chaos and confusion in the organisation.

For example, if the inventory of finished products is increasing day by day it clearly indicates mismanagement of marketing and sales.

8. Composite process:

Management consists of series of functions which must be performed in a proper sequence. These functions are not independent of each other.They are inter-dependent on each other. As the main functions of management are planning, organising, staffing, directing and controlling; organising cannot be done without doing planning, similarly, directing function cannot be executed without staffing and planning and it is difficult to control the activities of employees without knowing the plan. All the functions inter-dependent on each other that is why management is considered as a composite process of all these functions.

9. Balancing effectiveness and efficiency:

Effectiveness means achieving targets and objectives on time. Efficiency refers to optimum or best utilisation of resources. Managements always try to balance both and get the work done successfully. Only effectiveness and only efficiency is not enough for an organisation: a balance must be created in both.

For example, if the target of an employee is to produce 100 units in one month time and achieving the target by wasting resources and mishandling the machinery, will not be in the interest of organisation. On the other hand, if the employee spends lot of time in handling the machine carefully and managing the resources carefully and fails to complete the target on time, it will also not be in the interest of organisation. Manager sees to it that this target is achieved on time-and with optimum use of resources.

Importance of Management

1. It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.

2. Optimum Utilization of Resources - Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use

in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources.

3. Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.

4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). To establish sound organizational structure is one of the objective of management which is in tune with objective of organization and for fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone.

5. Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in touch with the changing environment. With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing demand of market / changing needs of societies. It is responsible for growth and survival of organization.

6. Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society.

Functions of Management

Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management

given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

1. Planning

It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:

Identification of activities.

Classification of grouping of activities. Assignment of duties. Delegation of authority and creation of responsibility. Coordinating authority and responsibility relationships.

3. Staffing

It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”. Staffing involves:

Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).

Recruitment, Selection & Placement. Training & Development. Remuneration. Performance Appraisal. Promotions & Transfer.

4. Directing

It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements:

Supervision Motivation Leadership Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.

5. Controlling

It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has following steps:

o Establishment of standard performance. o Measurement of actual performance. o Comparison of actual performance with the standards and finding out

deviation if any. o Corrective action.

Levels of Management

The term “Levels of Management’ refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases when the size of the business and work force increases and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories:

1. Top level / Administrative level 2. Middle level / Executory 3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below:

LEVELS OF MANAGEMENT

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions.

The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the enterprise.

b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc.

c. It prepares strategic plans & policies for the enterprise. d. It appoints the executive for middle level i.e. departmental managers. e. It controls & coordinates the activities of all the departments. f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction. h. The top management is also responsible towards the shareholders for the

performance of the enterprise.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as -

a. They execute the plans of the organization in accordance with the policies and directives of the top management.

b. They make plans for the sub-units of the organization. c. They participate in employment & training of lower level management. d. They interpret and explain policies from top level management to lower

level. e. They are responsible for coordinating the activities within the division or

department. f. It also sends important reports and other important data to top level

management. g. They evaluate performance of junior managers. h. They are also responsible for inspiring lower level managers towards better

performance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. In other words, they are concerned with direction and controlling function of management. Their activities include -

a. Assigning of jobs and tasks to various workers. b. They guide and instruct workers for day to day activities. c. They are responsible for the quality as well as quantity of production. d. They are also entrusted with the responsibility of maintaining good relation

in the organization. e. They communicate workers problems, suggestions, and recommendatory

appeals etc to the higher level and higher level goals and objectives to the workers.

f. They help to solve the grievances of the workers. g. They supervise & guide the sub-ordinates. h. They are responsible for providing training to the workers. i. They arrange necessary materials, machines, tools etc for getting the things

done. j. They prepare periodical reports about the performance of the workers. k. They ensure discipline in the enterprise. l. They motivate workers. a.m. They are the image builders of the enterprise because they are in

direct contact with the workers.

5 Main Functional Areas of Management

Some of the major functional areas of management are as follows:

It is also called operational management or functional areas of management. As being management, a social and universal process, its area is very wider. Inter disciplinary approach of management widens the functional areas.

There are five main functional areas of management viz., human resource, production office, finance and marketing; which have been discussed below.

Nowadays, some new and emerging dimensions are also considered areas of management as: time management, environment management, transport management, international management, forex management.

In time management, the emphasis is given on achieving the target in minimum time. By the nature, only one thing time is allotted equally to every creature as 24 hours in a day. But the person, who knows the art of time management, ranks first. Japanese time management is regarded best in the world.

In environment management, the efforts are made to check the different types of industrial pollution viz., air, water and noise. It is the responsibility of general manager to plan for congenial ecology to plant, animal and human being. Transport management is the specialized branch for arranging efficient and cheaper transport facility.

In the age of multinational corporations (MNCs), the primary concern of international management is with the management of people, material and money of the international environment.

It is the extension of simple management process itself, but across national frontiers. A manager while dealing with different nations must take into account the legal, political, social, economic and technical aspects in the global perspective. Forex (foreign exchange) management is the application of management principles for earning more and more foreign money.

1. Human resource management:

Human resource development or personnel management or manpower management is concerned with obtaining and maintaining of a satisfactory and satisfied work force i.e., employees. It is a specialized branch of management concerned with ‘man management’.

The recruitment, placement, induction, orientation, training, promotion, motivation, performance appraisal, wage and salary, retirement, transfer, merit-rating, industrial relations, working conditions, trade unions, safety and welfare schemes of employees are included in personnel management. The object of personnel management is to create and promote team spirit among workers and managers.

2. Production management:

Production management refers to planning, organization, direction, coordination and control of the production function in such a way that desired goods and services could be produced at the right time, in right quantity, and at the right cost. Some authors treat material, purchase and inventory management as part of production management. Production management involves the following functions:

(a) Product planning and development,

(b) Plant location, layout and maintenance,

(c) Production systems and machines,

(d) Management of purchase and storage of materials,

(e) Ensuring effective production control.

3. Office management:

Office management can be defined as, “the organization of an office in order to achieve a specified purpose and to make the best use of the personnel by using the most appropriate machines and equipment, the best possible methods of work and by providing the most suitable environment.”

The main topics of office management are: office accommodation, layout and environment, communication, handling correspondence and mail, typing and duplicating, record management and filing, indexing, forms and stationary, machines and equipments, O & M, office reporting, work measurement and office supervision.

4. Financial management:

Financial management can be looked upon as the study of relationship between the raising of funds and the deployment of funds. The subject matter of financial management is: capital budgeting cost of capital, portfolio management, dividend policy, short and long term sources of finance. Financial management involves mainly three decisions pertaining to:

1. Investment policies:

It dictates the process associated with capital budgeting and expenditures. All proposals to spend money are ranked and investment decisions are taken whether to sanction money for these proposed ventures or not.

2. Methods of financing:

A proper mix of short and long term financing is ensured in order to provide necessary funds for proposed ventures at a minimum risk to the enterprise.

3. Dividend decisions:

This decision affects the amount paid to shareholders and distribution of additional shares of stock.

5. Marketing management:

Philip Kotler views marketing as a social and managerial process by which individuals and group obtain what they need and want through creating and exchanging products and values with others. American Marketing Association defines marketing management as the “process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy individual and organizational objectives.”

The course content of marketing management generally includes: marketing concept, consumer behaviour, marketing mix, market segmentation, product and price decisions, promotion and physical distribution, marketing research and information, international marketing etc.

Modern marketing management is bridging the gap of demand and supply through de-marketing, remarketing, over-marketing and meta- marketing. Modern marketing, from societal point of view, is the force that harnesses a nation’s industrial capacity to meet the society needs and wants.

The main function of modern management is to organize human and physical resources and direct them toward efficient performance and higher productivity at the minimum costs. The same line of thinking can be applied in various functional areas viz., personnel, production, office finance and marketing. Modern managers are the harbinger of cooperation, fellow feeling, mutual understanding and growth.

1. Figurehead Role of Manager

Managers perform the duties of a ceremonial and symbolic in nature such as welcoming official visitors, signing legal documents etc as head of the organization or strategic business unit or department.

Duties of interpersonal roles include routine, involving little serious communication and less important decisions. However, they are important for the smooth functioning of an organization or department.

2. Leadership Role of Manager

All managers have a leadership role. The manager, as in charge of the organization / department, coordinates the work of others and leads his subordinates.

This role includes hiring, training, motivating and disciplining employees. Formal authority and functional authority provides greater potential power to exercise and get the things done.

3. Liaison Role of Manager

As the leader of the organization or unit, the manager has to perform the functions of motivation, communication, encouraging team spirit and the like. Further, he has to coordinate the activities of all his subordinates, which involves the activity of liaison.

This role also requires the manager to interact with other managers outside the organization to secure favours and information. In this role, the manager represents his organization in all matters of formality.

4. Monitor Role of Manager

As a result of the network of contacts, the manager gets the information by scanning his environment, subordinates, peers and superiors.

The manager seeks and receives information concerning internal and external events so as to gain understanding of the organization and its environment. Typically this is done through reading magazines and talking with others to learn the changes in the public’s tastes, what competitors may be planning, and the like.

Managers, mostly collect information in verbal form often as gossip, hearsay, speculation and through grapevine channels.

5. Disseminator Role of Manager

Manager disseminates the information, he collects from different sources and through various means. He passes some of the privileged information directly to his subordinates, peers and superiors who otherwise have no access to it. This information is gathered by him from his environments and from his own equals in the organization.

The manager will play an important role in disseminating the information to his subordinates, when they don’t have contact with one another.

6. Spokesman Role of Manager

Managers also perform a spokesperson role when they represent the organization to outsiders. Manager is required to speak on behalf of the organization and transmit information on organization’s plan, policies and actions.

The manager has to keep his superior informed of every development in his unit, who in turn inform the insiders and outsiders. Directors and shareholders must be informed about the financial performance, customers must be informed about the new product developments, quality maintenance, government officials about implementation of law etc.

7. Entrepreneurial Role of Manager

As an entrepreneur, the manager is a creator and innovator. He initiates and oversee new products that will improve their organization’s performance.

He seeks to improve his department, adapt to the changing environmental factors. The manager would like to have new ideas, initiates new projects and initiates the developmental projects.

8. Disturbance Handler Role of Manager

As a disturbance handler, managers take corrective action to response to previously unforeseen problems. Disturbance handler role presents the manager as the involuntarily responding to pressures. Pressures of the situation are severe and highly demand the attention of the manager and as such the manager cannot ignore the situation.

For example, worker strike, declining sales, bankruptcy of a major customer etc. The manager should have enough time in handling disturbance carefully, skilfully and effectively.

9. Resource Allocator Role of Manager

The most important resource that a manager allocates to his subordinates is his time. As a resource allocator, managers are responsible for allocating human, physical and monetary resources. Accordingly, setting up of a time schedule for the completion of an operation or approval of expenditure on a particular project, etc., are the functions which the managers perform in the role of a resource allocator.

The manager should have an open-door policy and allow the subordinates to express their opinions and share their experiences. This process helps both the manager and his subordinates in making effective decisions. In addition, the manager should empower his subordinates by delegating his authority and power.

10. Negotiator Role of Manager

In this tole, the manager represents the organization in bargaining and negotiations with outsiders and insiders, in order to gain advantages for his own unit. He negotiates with the subordinates for improved commitment and loyalty, with the peers for cooperation, coordination and integration, with workers and their unions regarding conditions of employment, commitment, productivity, with the government about providing facilities for business expansion etc.

These negotiations are integral part of the manager’s job for only he has authority to commit organizational resources and has nerve centre of information.

What skills does a manager need?

There are three fundamental skills of a manager:

1. TECHNICAL

The manager should be proficient at specific tasks. This in turn helps to provide the credibility or knowledge to persuade people to do certain things.

2. HUMAN

The manager has to know how to work with people.

3. CONCEPTUAL

The manager can see the organisation as a whole. In other words, there has to be some knowledge of the organisation and what it does and how it interacts with other organisations.

The most important skill of a manager

For more specific skills, here is a list compiled by management experts in decreasing order of importance:

1. People skills 2. Strategic thinking (planning ahead and predicting what was going to happen) 3. Visionary 4. Flexible/adaptable to change 5. Self-management 6. Team player 7. Solve-complex problems and make decisions 8. Ethical/high personal standards

Hence the most important skill of a manager is to understand people and what makes them motivated to do the work in the achievement of certain goal(s).

The contribution of F.W.Taylor to scientific management

Frederick Taylor (1856-1915), developer of scientific management. Scientific

management (also called Taylorism or the Taylor system) is a theory of management

that analyzes and synthesizes workflows, with the objective of improving labor

productivity. The core ideas of the theory were developed by Frederick Winslow Taylor

in the 1880s and 1890s, and were first published in his monographs, Shop Management

(1905) and The Principles of Scientific Management (1911). Taylor believed that

decisions based upon tradition and rules of thumb should be replaced by precise

procedures developed after careful study of an individual at work. Its application is

contingent on a high level of managerial control over employee work practices.

Taylorism is a variation on the theme of efficiency; it is a late 19th and early 20th

century instance of the larger recurring theme in human life of increasing efficiency,

decreasing waste, and using empirical methods to decide what matters, rather than

uncritically accepting pre-existing ideas of what matters. Thus it is a chapter in the larger

narrative that also includes, for example, the folk wisdom of thrift, time and motion

study, Fordism, and lean manufacturing. It overlapped considerably with the Efficiency

Movement, which was the broader cultural echo of scientific management's impact on

business managers specifically.

In management literature today, the greatest use of the concept of Taylorism is as a

contrast to a new, improved way of doing business. In political and sociological terms,

Taylorism can be seen as the division of labor pushed to its logical extreme, with a

consequent de-skilling of the worker and dehumanisation of the workplace.

Evolution of Management Thought and Theory

2015 - Start of Management Knowledge Revision for the Year on 18 January 2016

Organization of human beings for the attainment of common objectives is ages old. But in

the scientific tradition, development of management theory is only around 100 years old.

Adam Smith did mention issues of entrepreneurship and increased efficiency due to

specialisation. Marshall also touched upon efficiency in industrial work. But serious

attention to individual firm issues in economics occurred only after 1840s.

Henry Varnum Poor discussed issues of managing a big business concern especially in

railroad business during the period 1850 to 1862 as editor of American Railroad Journal.

Charles Babbage documented some issues related to efficiency of manufactures. But it was

F.W. Taylor who gave the call for development of science by managers for all human

activities in production processes and by implication for all man-machine activity and laid

the foundation for development of theory in management in 1911. Following the scientific

method, subsequent to Taylor number of books and monographs appeared. Henri Fayol in

1916, came out with the explanation for management as an activity distinct from other

industrial activities - technical, commercial, financial, accounting and security.

Fayol came out with the list of functions of management as planning, organizing, command,

co-ordination and control. L. Gulick and L. Urwick expanded it to POSDCORB. Koontz and

O'Donnell suggested planning, organizing, staffing, directing and control. This approach of

explaining management theory is being called operational approach. Professor Narayana

Rao suggests planning, organizing, resourcing, executing and controlling as the

appropriate steps for operational approach.

Professors and researchers belonging to Psychology field have developed management

related theories practices related to human behavior in organizations. Sociologists also

brought in their knowledge of group behavior.

Statisticians found that management requires forecasting and statistical forecasting

techniques have application. Then they developed application of statistical samples in

process control and in reducing 100% inspection to inspections based on samples. Quality

management area has benefitted a lot form statistical thinking. Six sigma, a technique to

investigate the process to reduce its variance based on experiments and the statistical

analysis of resulting data has given significant benefits to organization to reduce defects and

costs.

Operations research is application of scientific method to business decision making thought

earlier to be complex. OR scholars formulated the complex decision making situations into

mathematical models involving objective functions and constraints and developed

procedures to find optimal combinations of decision variables. A large number of business

decisions became better and managers were forced to include quantitative methods in their

day to day functioning.

The advent of computers also brought a change in management practice. Commercial

transactions are being now done using computers at both ends. Data is being captured and

analyzed by the computer programs. Hence lot data processing earlier done human

component is now being done by computers. Hence there was a drastic reengineering of

business processes.

Contingency Approach

Contingency Approach definition

The contingency approach is a management theory that suggests the most appropriate style of management is dependent on the context of the situation and that adopting a single, rigid style is inefficient in the long term. Contingency managers typically pay attention to both the situation and their own styles and make efforts to ensure both interact efficiently.

The contingency approach contrasts with other forms of leadership, such as trait-based management, whereby personality and individual make-up predict patterns of management and responses to given situations over time. Another management approach is style-based app

Contingency theory is beneficial to organisations because of the potential for learning from specific situations and using these lessons to influence future management of the same or similar situations. The ability to adapt to external pressures and changes is also an advantage. Contingency theory may also produce more well-rounded leaders who are able to develop their skills in multiple areas.