modern view

1. THE MODERN VIEW:
SYSTEMS AND CONTINGENCY CONCEPTS
Organization theory and management
practice are evolving continually.
Traditional /classical theories had
been modified and evolving rapidly as
human relationist argued that
humanitarian principles are a must in
organization management. In the
parlance of organization theories an

2. approach emerges that offers an
opportunity for convergence in
organization and management. These
approaches are systems and contingency
concepts.
To understand the system Approach, let us
define what is a system?
System is an organized, unitary whole
composed of two or more interdependent
parts, components, or subsystems and
delineated by identifiable boundaries
from its environmental supra-system.

3. The term system covers a broad spectrum of
our physical, biological, and social
world.
In the Universe there includes: galaxial
system, geophysical systems, and molecular
systems.
In biology, let us consider an organism.
It is a system of mutually dependent
parts, which includes many subsystems.
Considering a human body, which is a
complex organism, it is composed of
systems namely: skeletal system,

4. Circulatory system, digestive system,
nervous system and others.
In the social world we have:
transportation system, communication
system, digital system, economic
system, budgeting system, and many
others.

5. SYSTEMS APPROACH
AND ORGANIZATION THEORY
Before we proceed, let us understand what is
a closed system.
Closed system has firm boundaries between
the organization and the outside environment.
When we think our organizations are closed,
we don't believe dynamics outside
the organization impact the dynamics inside.
In a closed system, control is possible
because the number of variables remains
static.

6. WHILE, Open System is a system that
regularly exchanges feedback with its
external environment. Open systems
are systems, where inputs, processes,
outputs, goals, assessments and
evaluations, and learnings are all
important.

7. The classical and Traditional Theories used a
highly structured, closed-system approach.
However the Modern view/theory has moved
toward an open system approach.
“The distinctive qualities of modern
organization theory are its conceptual-
analytical base, its reliance on empirical
research data, and, above all, its
synthesizing, integrating nature”. These
qualities accepts that the meaningful study
of organization is to view it as a system.

8. The historical root of a system view
is from the writings and the concepts
expressed by Mary Parker Follet
indicative of a system approach. She
viewed organization as a social
system and described management as a
social process as she considered the
psychological and sociological aspect
of management.

9. Chester Barnard was one of the first
management writers who utilize the system
approach.
Herbert Simon and his associates viewed
organization as a complex system of
decision-making processes. He NOT ONLY
emphasizes system approach for the
behavioral view of organizations but also
stresses its importance in management
science.

10. The development of Planning-
Programming-Budgeting Systems (PPBS)
represents one of the most important
and comprehensive examples of the
application of the systems approach
to the management of complex
organizations. PPBS is a budgeting
approach/technique/system that
attempts to establish goals, develop
programs for their accomplishment,

11. consider the cost and benefits of
various alternative approaches, and
use as a budgetary process that
reflects program activities over the
long run. This was primarily used
by the American Military
Organization until it was enacted as
the budgeting system to be used in
the nation’s budgeting approach.

13. We view the organization as an open,
sociotechnical system composed of a number of
subsystems, as illustrated the figure I have
shown you.
The major subsystems that
composed an organization:
a) Goals and values sub-system
b) Technical sub-system
c) Structural sub-system
d) Psycho-social sub-system
e) Managerial sub-system

14. CONTINGENCY VIEWS OF ORGANIZATION
System concepts provide us with a macro
paradigm for the study of organizations,
But they involve a relatively high degree
of generalization.
Contingency views tends to be more
concrete and to emphasize more specific
characteristics and patterns of inter-
relationship among sub-systems.

15. The Contingency view of organizations and
their management suggest that an
organization is a system composed of a sub-
systems and delineated by identifiable
boundaries from its environmental supra-
system.
It seeks to understand the inter-
relationships within and among subsystems
as well as between the organization and its
environment and to define patterns of
relationships or configurations of
variables.

16. It emphasizes the multivariate
nature of organization and attempts
to understand how organizations
operate under varying conditions
and in specific circumstances.
Contingency views are ultimately
directed toward action most
appropriate for organizational
design and for an specific
situation.

17. In summary, the underlying
assumption is that there should be a
congruence between organization and
its environment and among the
various sub-systems.
Therefore the primary managerial
role is to maximize this congruence
(consistency).

18. Meaning there are appropriate
patterns of relationships for
different types of organization
and that we can improve our
understanding on how this
relevant variables interact.

19. Contingency patterns
of relationship
1)The Stable Mechanistic Organization
form. This is appropriate when:
a) the environment is relatively
stable and certain
b) the goals are well defined and
enduring

20. c) the technology is fair
d) there are routine activities
and productivity is the major
objective
e) decision –making is
programmable and coordination and
control processes tend to make a
tightly structured, and
hierarchical system possible.

21. 2. The Adaptive-Organic Organization Form
This is more appropriate when:
a) the environment is relatively
uncertain and turbulent.
b) the goals are diverse and changing.
c) the technology is complex and
dynamic.
d)there are many non-routine
activities in which creativity and
innovation are important.

22. e) Heuristic decision-making
processes are utilized and
coordination and control occur
through reciprocal adjustments.
The system is less hierarchical
and more flexible.

23. Sample Contingency View
of Management
Often thoughts of a Manager:
“the theory may be appropriate in
general, but our organization is
different”
*Contingency view of management
offset this claim of manager by
providing appropriate guidelines for

24. action.
Contingency concepts facilitate more
thorough understanding of complex
situations and increase the
likelihood of appropriate managerial
actions.