Comtemporary viewpoints
While the classical, behavioural, and quantitative approaches continue to make contributions to managements, other viewpoints also have emerged. These are contemporary in the sense that they represent recent major innovations in thinking about management. Two of the most important contemporary viewpoints are the systems and contingency theories.
The systems theory approach is based on the notion that organizations can be visualized as systems. A system is a set of interrelated parts that operate as a whole in pursuit of common goals.
Major Components. According to the systems approach, an organizational system has four major components:
Input
Transformation
process
Output
Feedback from
environment
Inputs are various human, material, financial, equipment and informational resources required to run the organization. Transformation processes are the organizations managerial and technological abilities that are applied to convert inputs into outputs. Outputs are the products, services and other outcomes produced by the organization. Feedback is information about results and organizational status relative to the environment.
One advantage of the systems approach is that it can be used to analyze systems at different levels – from an individual human cell up to a supranational system consisting of two or more societies. Another advantage is that it provides a frame work for assessing how well the various parts of an organization interact to achieve a common purpose. Then it emphasizes that a change in one part of the system may affect other parts. Finally another advantage is that it considers how an organization interacts with its environment – the factors outside the organization that can affect its operations.
Systems can be open or closed. An open system is one that operates in continual interaction with its environment. In contrast a closed system does little or no interacting with its environment and receives little feedback. From a practical point of view, all organizations are open systems to some extent, since it’s virtually impossible for organizations to operate for a significant period of time without some interaction with the environment.
Contingency theory is a viewpoint that argues that appropriate managerial action depends on the particular parameters of the situation. Hence, rather than seeking universal principles that apply to every situation, contingency theory attempts to identify contingency principles that prescribe actions to take depending on the characteristics of the situation.
One of the major pioneering studies that helped establish the contingency viewpoint was conducted in the 1950-s by a research team headed by Joan Woodward, an industrial sociologist in Great Britain.
Sometimes research and managerial practice encourage emerging new promising approaches. One recent perspective that has gained attention can best be termed Japanese management approach, since it focuses on aspects of management in Japan that may be appropriate for adoption in the US.
On the basis of his research of both American and Japanese management approaches, management expert William Ouchi has outlined Theory Z. Theory Z combines positive aspects of American and Japanese management into a modified approach aimed at increasing US managerial effectiveness while remaining compatible with the norms and values of American society and culture. The theory Z approach involves giving workers job security; including them in some decision-making; emphasizing group responsibility; increasing quality; establishing gradual-advancement policies; more informal controls and broader career paths; and showing greater concern for employee’s work and non-work well-being.