The contemporary theories of management justify and interpret the change in the nature of organizational environments today. They also tend to give guidelines on how to run organizations. Some of these theories have been effective on the ground while others have made little impact. Management theories that have made an impact in practice include the following:
The contingency theory
This theory asserts that whenever management is making decisions, they have to take into account all the aspects that are involved in the current situation. They must then act on those aspects which seem to affect the situation they are dealing with. This means that the style in which to deal with a particular situation depends on that particular situation. The implication is that if for instance one is dealing with a situation that concerns a learning institution, then the person has to use a participative method. The theory however, concerns any of several theories of management. The proponent of this theory was Joan Woodward. His argument is that some attributes of an organization are determined by technologies. Some of these attributes include centralization of authority and the making of rules and procedures in an organization (Fiedler, Blanchard & Yetton and McNamara).
Allen (1994) adds that the theory argues that there is no best way to run an organization as management is based on the situation at hand. A style of management might be effective in one situation and not in another. External and internal limitations affect the style of management. Such limitations may include the size of an organization, the resources available and technology, operational systems and adaptation of the environment to its environment. Hence, the main ideas of the theory are that there in no best way to manage an organization. Secondly, how the organization is designed, its systems and subsystems must fit in with the environment. In addition, the subsystems must be in harmony with each other. For the needs of the organization to be met also, the style of management must be suitable to the task and nature of employees undertaking that task.
Contingency theory of leadership
The success of any management is a function of a variety of unforeseen events. The demands of a certain situation dictate how effective a pattern of behavior of management will be. The psychological orientation of a leader determines the effectiveness of group performance. This is coupled with the atmosphere of work, the duty and power of the leader. Therefore, the model is dependent on the style of leadership and factors surrounding the situation (Allen, 1994).
Contingency theory of decision-making
This is a theory by Vroom and Yetton. It argues that for a decision to be effective, the surrounding aspects have to be considered. These aspects are the importance of that decision’s quality and its acceptance, quantity of information the leader and other employees have, whether the subordinates will contribute or not and anticipated disagreements (Allen, 1994).
The participative nature of the contingency theory makes the employees feel appreciated and acts as motivation for them. In addition, by considering all aspects surrounding a situation before dealing with it, the management is able to make unbiased decisions. The two factors have worked in seeing to the success of this theory and organizations have embraced the fact that there is no one best way of management (Fiedler, Blanchard & Yetton).
The systems theory
A system is a set of parts that work together to accomplish a common goal. If then one component of that system is withdrawn, the system is changed entirely (Boulding and McNamara). If for instance a piece of furniture is removed from a room, the usefulness of the remaining furniture is unaffected. If a wheel is removed from a car though, that car can not move. The components of a car are therefore a system but furniture in a room is not. A system has inputs, outputs, processes and outcomes. The four aspects function together.
An organization is a system. Input in an organization includes raw materials, employees and funds. The process involved is planning, organization, motivated and controlled with the aim of meeting the goals of that company. The output is products that are released to the market. The outcome of the organization is either improved quality of life or level of productivity. The organization has to receive feedback from its clients or the external environment like society and government (Allen, 1994).
The different parts of a system are in communication with one another. The system also keeps on changing to suit new conditions. In addition, all systems share characteristics. Every part of a system functions specially but all the parts make one whole (Boulding, 1956 and Allen, 1994).
The theory has not been in use for a long time. It only came to use when organizations were faced with great changes. The approach then altered the way that organizations operate. This theory of management has helped originations in that external factors like writers, consultants and educators have stepped in. They are now assisting managers to regard the organization in a new perspective. The theory has made managers understand events in the organization in a new perception. Managers can now recognize the different components of the organization as well how these parts work together. For example, managers in a construction firm can now understand how supervisors coordinate their work with the workers or programs synchronize with administration (Boulding, 1956).
The theory has made organizations take a leap into development as in the past, managers would take one component of the organization and direct all focus on it. Afterwards, they would move that attention to another part of the organization as Boulding explains. Eventually, some subsystems would be neglected for a long period of time and problems would go unnoticed until it was too late. In a learning institution for instance, there would be an excellent set of teachers. The administration would also be perfect. However, each of these departments worked separately and there would be no harmony.
One of the contributors in this theory was Jay W. Forester. He was a member of the MIT Sloan School of Management. He founded the System Dynamics which is a method he used to understand the dynamic behavior projected by complex systems. He argued that the structure of a system is as important as individual components in the determination of its behavior.
Computing and technology adopted the systems theory through John Von Neumann (Larry Constantine, Ton Demarco and Ed Yourdon). It was the foundation for software engineering. Vaughn Frick and Albert F. used the general systems theory to develop the link between system analysis and system design (Fran Tarkenton and James Martin).
The Living systems theory was developed from general system theory whose proponent was Bertalanffy. The original contributor to the theory however was James Miller. In ‘living systems’, Miller looks at into systems in order of size and goes on to identify subsystems. The systems theory in organizations relies on attaining productivity by employing honesty and feedback. It is integrative. It does not look at individual regulations but goes beyond them to create a common system. The theory gives emphasis on the interrelation and not the individual elements of a system (Boulding, 1956 and Allen, 1994).
On the other hand, there have been theories that have not been effective in the practical running of organizations.
The world is chaotic. So are organizations. Managers however assume that the chaos in an organization can be controlled. The theory of chaos however argues differently. Proponents and supporters of chaos theory who include Blair and Gleick suggest that with time, systems become more complex. As they become complex, they also turn unstable and demand more effort to maintain. More structures are also required in order to maintain stability. Eventually, the system that was in operation comes apart or combines with another complex system (Blair).
Blair, in ‘What is chaos theory?’ argues that chaos is the unexpected results of small actions that seem insignificant. The chaos theory insinuates that we have an influence on our reality and to some extent actually create that reality. The simplified statement summarizing the theory is that if a butterfly flaps its wings in Tokyo, it causes a tornado in Texas (Blair and Gleick). In organizations the application of this theory is that what managers might perceive as the smallest actions might turn out to have adverse effects on that organization. Every human interaction is therefore important as it impacts on the general activities of that organization.
The chaos theory is applicable in the example of a remark made by the president of Harvard University which Blair writes about in his article “What is chaos theory and how does it apply to your organization?” Lawrence Summers commented that men are better in sciences and math than women. Blair says that in the history of the university, Summers is remembered by the fact that he claimed girls are not up to the challenge. This is despite the fact that he did not actually put it that way. The long-term effect was that Mr. Summers was forced to resign from his position. Prior to that, he was censored by faculty and the public protested against him.
Another example which Blair gives is that of a manager that came back to his organization after a visit abroad. He had the habit of visiting managers’ offices and employees and chatting with them on the progress of the institution. He took such opportunities to answer questions and get feedback. On this occasion, he was tired from his flight. He encountered a group of employees poring over a Wall Street Journal. He was happy that he could at least talk to the group at once. He joined the group and their discussion. The employees were discussing deregulation of industries that dealt with utilities like theirs. The concern of these employees was how this would impact on the organization as Blair writes.
Blair adds that the organization’s productivity was low and this manager was distracted from his conversation with the managers. He was therefore bored by this discussion and commented that it was professional whining. The group was stunned. He took an embarrassing exit. The effect of this comment was his ultimate dismissal, the reason being that he had been influenced by fatigue and in that unguarded moment earned his dismissal.
Chaos theory hence recognizes some factors in management. One of these is that everything one does is closely monitored. Secondly, an individual must monitor all their actions no matter how insignificant they seem and think about the consequences they might have. The theory is a reflection on Gestalt theory which suggests that a whole is greater than its parts. It paints the picture of organizations as unpredictable due to the relationship between the systems (Gleick).
The theory does not give much assistance in the management of organizations. All it does is explain the cause of events in an organization but the way to manage those events as proposed by Chaos theory is not effective (Gleick). Blair agrees with this argument and adds that a manager is likely to observe events that have ultimately led to chaos in the organization. He might then begin to analyze those events finding that they possibly originated from very trivial things. The manager may not be in a position to prevent such events from taking place. Situations that are complex and unpredictable are likely to arise even though the system might be sensitive to the preliminary conditions. Minute changes might take place in the initial conditions of an organization and result in entirely varied outputs from the system in question
Consider the case of the Titanic for instance which Gleick gives as an illustration in “What is chaos theory?” The ship had no access to binoculars that could spot icebergs in the ship’s path. In addition, reports say that the captain had cancelled plans for lifeboats. Though there was a belief that the ship could not sink, the two factors led to exactly that resulting in the deaths of more than one thousand people. Though the captain was responsible for the cancellation of lifeboats, he had no way of knowing the situation they would be faced with and therefore could not prevent it in any way. He might have thought about the consequence of his action but the appearance of the iceberg was unpredictable. The theory therefore fails to guide management clearly.
In conclusion, time is irreversible and if an event occurs, the same context does not appear twice. Management cannot predict the behavior of a system through looking at the behavior of its parts. According to Gestalt’s theory, reality cannot be seen objectively and the effect some behavior has on the organization is unpredictable (Blair and Gleick).
Bureaucracy refers to division of labor among management. An organization that is managed through bureaucracy runs through written documents. Weber, the proponent of this theory, aimed his focus at division of organizations into hierarchies. This meant that lines of authority had to be established. His suggestion was that all organizations come up with procedures of operation that would be standard for very task in those organizations. Through this theory, every structure is controlled by the one above it. Every position in that organization has its rights. The responsibilities are defined with every level having its field of competence (Hallpern and Peskin, 1969).
In Weber’s opinion, bureaucracies were stable. They would therefore be preferred over other approaches to management. However, he had one concern which was that all organizations would become similar because they would be sharing many structures. The result would be a new class of workers. This would be the professional bureaucrats.
McNamara explains that Michel Crozier, a French Sociologist, undertook the examination of bureaucratic organizations in 1964.He then came up with a theory of the dysfunction of bureaucracies after observing several case studies.
Michel discovered that in bureaucracies, outcomes are decided in advance. This leads to exploitation of uncertain zones by workers in an attempt to gain control over their lives. This exploitation becomes a competition among employees so that they can gain or in order to prevent other people from gaining. The organization then becomes an avenue for power struggles. The long-term effect is that such organizations do not learn from their mistakes (McNamara).
In an attempt to be democratic, the organizations try to develop impersonal rules that are made to cover each incident. Since the outcomes are predetermined, the hierarchies become insignificant. The management loses its power over other employees. In addition to this, to appear to be democratic in making decisions concerning the organization, such decisions are made by persons who are not likely to be influenced by the affected. Consequently, problems are solved by people who do not even have first-hand knowledge of them (Hallpern and Peskin, 1969). Moreover, since the departments are disjointed, all the structures of that organization are isolated. The employees therefore have to make efforts to conform to the culture of that organization regardless of the beliefs they hold and the goals of that business. This is the reasons that the bureaucratic theory of organization has failed. The organization becomes a disjointed set of structures and workers protest the exclusion from decision-making (Hallpern and Peskin, 1969).
Allen, J. (1994). Mutual control in the newly integrated work environments, the information society, vol. 10, (2), pp. 129-138.
Blair, Billie. What is chaos theory and how does it apply to your organization? Leading and Learning Inc.
Boulding, Kenneth. 1956. General systems theory: The skeleton of science, ECO Special Double Issue, vol. 6, (1-2), pp. 127-139.
Fiedler, Hersey, Blanchard, Vroom & Yetton. Contingency theory. Gleick, James. Chaos: What is chaos theory?
Hallpern, Osofsky & Peskin, M. (1989). Taylorism revisited for the 1990s, industrial management, vol. 31, (1), pp. 20-23.
McNamara, Carter. Brief overview of contemporary theories in management.