MBA and class notes

Sunday, 2 September 2012

Modern Management theory in principle of management,

MBA and class notes

Modern Management Theory

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
  • Contingency Approach

Quantitative 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.

It helps the management for improving their decision making by increasing the number of alternatives and giving faster decisions on any problem. Management can easily calculate the risk and benefit of various actions.

Major contributors in Quantitative Approach are-
Johan MacDonald
George R. Terry
Andrew Szilagyi

System approach:

System approach was developed inlate1960s. Herbert A. Simon is the father of system theory. A  System is defined as a set of regularly interacting or inter - dependent 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”.

Characteristics of system approach:
  • A system must have some specific components, units or sub units.
  • A Change in one system affects the other subsystems.
  • Every system is influenced by super system.
  • All systems along their subsystem must have some common objectives.
  • A system is a goal-oriented.
  • A system cannot survive in isolation.

Major contributors in system theories are-
  1. Daniel Katz,
  2. Robert L. Khan,
  3. Richard A. Johnson.

Contingency Approach:

Contingency Approach also knows as situational approach. In 1980s, it is recognized as a key to effective management. This approach accepts the dynamics and complexities of the organization structure. An organization is affected by its environment and environment is composed by physical resources, climate, persons, culture, economic and market conditions and their laws.
 This approach argues that there is no one universally applicable set of rules by which to manage organization.  

Major contributors in the contingency theories are-
  1. G.M. Stalker,
  2. Joan Woodward,
  3. Tom Burns,
  4. Paul R. Lawrence,
  5. L.W. Lorsch.

Modern management theory depends upon System approach and Contingency approach. 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.

Nb: In near future I will be sharing a post on “Objectives of management”.

Note: This post shared here are base on my study in case you find anything wrong and missing points than please bring it to my notice.


  1. the above information was very useful please keep writing such subject related articles :)

  2. great job, very useful. Thankyou!

  3. Can u give examples where early management approaches and modern management approaches are used?