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SYSTEM APPROACH
OPERATIONAL APPROACH
QUANTITATIVE APPROACH
CONTINGENCY THEORY
THEORY Z
TOTAL QUALITY MANAGEMENT
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
OPERRATIONAL APPROACH
Production – oriented field of management
dedicated to improving efficiency and cutting waste
QUANTITATIVE APPROACH
A problem is expressed in the form of quantitative or mathematical model
Different variables in management can be quantified and expressed in the form of an equation
Management =decision making, organization=decision making unit
CONTINGENCY THEORY
There is no universal or one best way to manage
Wide range of external and internal factors must be considered and the focus should be on the action that best fits for the situation.
THEORY Z Theory Z has been called a sociological description of the
humanistic organizations
“Theory Z is an approach to management based upon a combination of American and Japanese management philosophies”. Proponents of Theory Z suggest that it leads to improvements in organizational performance.
TOTAL QUALITY MANAGEMENT APPROACH Wide effort to improve quality of products and services
People and organizations mainly focus on quality given by
Quality = results of work efforts
total costs
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 commonpurpose.
TYPES OF SYSTEMS:1)Open system.2)Closed system.
KEY TERMS
• SUBSYSTEM : parts of system that depends on each other.
• Internal subsystem.• External subsystem.
• SYNERGY : cooperation between subsystems.
• SYSTEM BOUNDARY:separationb/n internal and external subsystems.
COMPONENTS OF A SYSTEM
• Inputs • Transformation process• Outputs • Feedbacks• environment
• Subsystems have proper order and communication b/n them.
• Decisions are based on impacts on various subsystems.
LEVELS OF SYSTEMS
THREE FUNCTION SYSTEMS MODEL• Benchmarking• Leadership• Employee involvement• Process involvement• Customer focus
FEATURES OF SYSTEM APPROACH
• Dynamic• Adaptive • Multilevel and multidimensional• Managers will have a good view• Gives importance to interdependence of different parts
• Forecasts consequences and plans actions
Closeness to reality.
The approach may be utilised by any of the other approaches.
Complex when used in large organisations.
Increased difficuilty for managers.
ADVANTAGES
DISADVANTAGES
What is operational approach?
Systematic management of all processes to achieve world class performance by:
Efficient utilisation of tools
Optimisation of resources
Elimination of process wastes/inefficiencies
By following the above three conditions, there is a continuous improvement and standardization in a process.
CHARACTERISTICS:
Draws together concepts, principles, techniques and knowledge from other fields and managerial approaches.
The conceptual framework of management can be constructed on the basis of the analysis of management process and identification of management principles.
ADVANTAGES:
Increase in Productivity.
Improvement in Quality.
Potential savings.
Simplification of Tasks.
Operational Approach emphasises static conditions whereas the organizations have to function in dynamic conditions.
It claims universality or management principles while management differs from organization to organization and from level to level.
Quantitative techniques are thosestatistical and programming techniques,which help decision makers solve manyproblems, especially those concerningbusiness and industry
Quantitative techniques are thosetechniques that provide the decisionmakers with systematic and powerfulmeans of analysis, based on quantitativedata, for achieving predetermined goals
1) Statistical Techniques
2) Programming 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.
Formulate the problem
Convert all inequalities to equations
Plot the graph of all inequalities
Find out the feasilble region
Find out the corner points
Substitute the objective function
Arrive at the solution
A special kind of optimization problem in which goods are transported from a set of sources to a set of destinations subject to the supply and demand constraints. The main objective is to
minimize the total cost of transportation.
A flow of customers from finite/infinite population towards the service facility forms a queue due to lack of capacity to serve them all at a time.
The decision making environment
Under certainity
Under uncertainity
Under risk
Laplace Criterion
Maxmin Criterion
Minmax Criterion
Maximax Criterion
Minmin Criterion
Hurwicz Criterion
Inventory is vital to the successful functioning of manufacturing and retailing organizations. They may be raw materials, work-in-progress, spare
parts/consumables and finished goods.
It involves developing a model of some real phenomenon and then performing experiments on the model evolved. It is descriptive in nature and not an optimizing model.
Definition of the problem
Construction of an appropriate model
Experimentation with the model
Evaluation of the results of simulation
A project is a series of activities directed to the accomplishment of a desired objective.
PERT
CPM
CONTINGENCY APPRAOACH
OF
MANAGEMENT
Contingency approach states that there is “no
one best way” to manage an organisation.
It is also known as situational approach.
“THE BEST WAY TO ORGANIZE DEPENDS ON
THE NATURE OF THE ENVIRONMENT TO
WHICH THE ORGANIZATION RELATES.” -
William Richard Scott
In 1970s, it is recognized as a key to effective
management.
CONTRIBUTORS:
L.W. Lorsch
Joan Woodward
Burns
George Stalker
Paul R.Lawrence
Joan Woodward (1916-1971)– “Management and Technology”, 1958,
”Industrial
Organization”, 1965
– Studied a large number of firms (100) in the
South Essex area
of England in the 1950s
– Found that organizational form varied, and
correlated with
production technology
– Concluded that there was not ”one best way”
to organize – the
nature of the production process would
determine which form
that would be most suitable.
Tom Burns (1913-2001) and G. M. Stalker
– “The Management of Innovation” (1961)
– Studied the introduction of electronics in Scottish
industry
– Described two ideal types of organization on each
side of a
continuum – the mechanistic and the organismic
(organic)
organization
– The organization as a result of the simultaneous
working of (at
least) three different social systems:
• Formal authority: aims, technology, relations with
the environment
• Cooperative systems of people with different
aspirations
•The political system – the competition and
cooperation for power
Paul R. Lawrence (1922-2011) and Jay W. Lorsch (1932 )
– “Organization and Environment: Managing Differentiation and Integration” (1967)
– Question: Why do people seek to build organizations?
Answer: In order to find better solutions to the environmental problems faced by
them.
– Therefore:
• It is people who have purposes, not organizations
• People come together to coordinate their different activities into an organization
structure
• The organization’s effectiveness is judged from the extent to which the members’
needs are satisfied
through the planned transactions with the environment
– In order to cope with the environment, organizations develop units and formal
structures
suited to the particular environment(s) they operate in.
What you do “depends” on the
“situation”.
-internal contingency factors
-external contingency factors
Internal Contingency Factors
Purpose
SizePeople
Technology
Structure
External Contingency Factors
Socio-cultural
Factors
Legal
/Political
Factors
Economic
Factors
Technological
Factors
General Environment of Coca Cola
Sociocultural
•Concerns about health
•Easier access to refrigeration
•Baby boomers drinking less
•Immigrants drink less
•Concerns about recycling
•Increased acceptance in China
and India
Government
•Increased health standards
for bottling
•Stricter liability legislation
Economic
•Slow economic growth
•Prospect of economic recovery
Technological
•New recycle friendly canning tech.
•New promotional opportunities
via the internet
•Threat of substitute drinks
Coca Cola
Instead of propagating universally applicable
organisation-management principles, this theory tries
to demonstrate that different circumstances require
different organisational structures
What works for one organisation may not work for
the other.
Managers need to understand the key contingencies
that effect the management practice for a given
situation.
EXAMPLE OF A SHOE MANUFACTURING COMPANY:
A shoe manufacturing company is faced with the problem of decreasing
profits;
Solution can be:
May establish a committee of sales and production personnel to
coordinate the production and distribution of goods under the assumption
that large inventories are responsible for the decline in profits
- (Systems theory)
By application of a contingency perspective:
Would enable to examine the situation and to determine the cause of
decreased profits before a new procedure or program is implemented.
Example of a super market manager:
Problem:
Customers Are complaining that queing lines and time for
billing are high.
Solution:
Manager identifies that,
1)The waiting times and queue lengths are always changing.
2)So a flexible approach is required.
Then he observes the customers and assings duty to the
workers according to the changing situation.
Studies show that companies that operate in less structured
environments are more successful with a flexible approach to
management, while companies in a more stable environment
do better with a more rigid and structured management style
of operations.
When the uncertainity of environment is high, an organic
structure(more flexible one) is suitable and when
uncertainity is low a mechanistic structure is suited.
Contingency theory is designed to provide the manager with the
capabilities to examine numerous possible solutions to a
problem.
Adapting to changing circumstances- No two situations are
absolutely identical, therefore each situation requires its own
unique solution.
To adopt this approach managers must sample all the past and
present ideas, some refer this to the ‘smorgasbord approach’.
The way you manage should change depending on the
circumstances.
Sometimes a bureaucratic organization is most effective,
sometimes a more loosely structured one; sometimes a
more classical approach is best, sometimes a more modern
one.
The most effective management style will vary depending
on the type of organization, its size, its environment, and
the particular situation/problem it faces at the time.
Limitations of Contingency Approach: Difficulty in determining all relevant contingency
factors and showing relationship between them may be
complex. It is totally practical approach without support of
theoretical and conceptual frame work. Sometimes manager finds difficulties in analyzing the
situation and discovering appropriate management technique in absence of proper research and lack of proper understanding of the situation.
Theory Z has been called a sociological description
of the humanistic organizations
“Theory Z is an approach to management based upon a combination of American and Japanese management philosophies”. Proponents of Theory Z suggest that it leads to improvements in organizational performance.
American Organisations
Short-term employment
Individual decision making
Individual responsibility
Rapid evaluation & promotion
Explicit control mechanisms
Specialized career paths
Japanese Organisations
Lifetime employment Collective decision
making Collective
responsibility Slow evaluation &
promotion Implicit control
mechanisms Non-specialized career
paths
LONG-TERM EMPLOYMENT
CONSENSUAL DECISION MAKING
INDIVIDUAL RESPONSIBILITY
SLOW EVALUATION AND PROMOTION
INFORMAL CONTROL WITH FORMALIZED
MEASURES
MODERATELY SPECIALIZED CAREER PATH
HOLISTIC CONCERN
Type Z organizations generally make life-long commitments to their employees and expect loyalty in return, but Type Z organizations set the conditions to encourage this. This promotes stability in the organization and job security among employees.
The type-z organisation emphasizes communication,collaboration,consensus in
Decision making
Type z organizations retain the emphasis on individual contributions that are characteristic of most american firms by recognizing individual achievements,albeit within the context of the wider group
The type z organisation,conversely adopts the model of slow evolution and promotion
The type z organization relies on informal methods of cotrol,but does measure performances through formal mechanisms. This is an attempt to combine elements of both the Type A and Type J organisations.
The type z organization is characterized by concern of employees that goes beyond the workplace.This philosophy is more consistent with the japanese model than the U.S model
IBM
Procter and Gamble
Hewlett and packard
Eastman kodak
TOTAL QUALITY MANAGEMENT(TQM) is the
integration of all functions and processes
within an organization to achieve
continuous improvement of the quality of
goods and services.
The goal is customer satisfaction.
Quality is defined as conformance to
requirements, not goodness.
The system for achieving quality is prevention,
not appraisal.
The performance standard is zero defects, not
“That’s close enough”.
The measurement of quality is price of non
conformance, not indexes.
Different people interpret quality differently. Few can
define quality in measurable items that can be proved
operationalized. When asked what differentiates their
products of service
The banker will answer “Service”.
The health care worker will answer “Quality health
care”.
The hotel employee will answer “Customer
satisfaction”.
According to Phil Crosby, Quality is…..
An attitude:- zero defects- continuous improvement.
A measurement:- price of Conformance, plus- price of Non Conformance (defects)
A belief in employees ability to solve
problems.
A belief that people doing the work are
best able to improve it.
A belief that everyone is responsible for
quality.
- 22,000 checks will be deducted from the
wrong bank accounts in the next 60
minutes.
- 20,000 incorrect drug prescriptions will
be written in the next 12 months.
- 12 babies will be given to the wrong
parents each day.
Visible, committed and knowledgeable.
A Missionary zeal.
Aggressive Targets.
Strong Drivers.
Communication of values.
Customers Contact.
• Systems viewpoint
• Dynamic process of interaction
• Multilevelled and multidimensional
• Multimotivated
• Probabilistic
• Multidisciplinary
• Descriptive
• Multivariable
• Adaptive
• Management is influenced by Internal and external
environment.
• Appropriate techniques are determined by situation and
Environmental factors of an organization.
• Thus the conclusion is that there cannot be any fixed
universal principles of management and organizations.
• The ancient approaches to management namely the
scientific approach and the human relations thought can be
described as the sources of the modern day management
thought.
While the scientific management theory focus on the efficiency of the
production process and the motivation of the worker, the human
relations thought emphasizes on the importance of behavioral
elements in employee satisfaction and consequently the levels of
satisfaction.
The combination of these two traditional models therefore covers the
most important aspects of management albeit in a retracted form.
The modern approaches to management tend to build onto these
provisions by providing meaningful insights that enable management
practices to be relevant and more effective in the modern day.
The conveyor belt production which is still common can also be
traced to the scientific model.
It therefore must be concluded that modern approaches to
management reinforce rather than repudiate the traditional
approaches to management.
THANK YOU