Lecture 10.11.12
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Transcript of Lecture 10.11.12
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Lecture6 (10.11.12)Open System and Contingency Management Theories,
Discussion on Planning & Organizing
Chandrasen KumarM.Sc. (DU), MPA (LKYSPP, Singapore)
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Todays overview
1) Minor Exams: Discussion on nature of paper
2) More about Open System Theory of Management
3) More about Contingency Theory of Management
4) Planning and Organising: Basic discussion today
and details shall continue
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Open System Theory
This theory is different from the rest we havediscussed earlier
It saysthere is no one best way to run the
organization or limited number of immutable
principles uniformly applicable in all situations Emphasizes situational analysis:
Identification and
Analysis
of multiple variables affecting and determiningorganizational behaviour and effectiveness
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Open System Theory
A system is a set of interrelated units The whole is greater than the sum of all units
example?
Traditional theories viewed organizations as closed
systems:It regarded the enterprise as sufficiently independent to allow
most of its problems to be analyzed with reference to its internal
structure and without reference to its external environment
Whereas OST views organisations as: Entities existing in dynamic and interdependent
relationship with environment receiving resources and
transforming into outputs and transmitting them to
environment, reactions are then fed-back to the system
as input, and cycle is maintained
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Open System Theory
Survival is the primary goal and in order to do that Organizations must acquire and developVe entropy
because closed systems experience chaos, eg. Wearingout of parts, breakdown etc.
Open systems have differentiation and elaboration of
roles through specialization and equifianlity Open systems amy achieve purposes/goals through
diverse sets of inputs and different configuration ofsystem componenets
Environment emerges as crucial variable Managing requires constant monitoring of
environment to overcome complacency andobsoletness
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Open System Theory
Thus OST: Provides a framework analyzing and understanding an
organization and required management system/practices
Does not negate other theories we have studied
Merely encourages to recognize all organizations aresame but they are all different
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Contingency Theory
This theory is also different from the rest we havediscussed earlier and
Provides another framework analyzing and understanding
an organization and required management
system/practices
Does not negate other theories we have studied
Emphasizes the differences among organizations and
seeks to identify variables contingencies affecting
Organizational structure
Performance and
Effectiveness
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Contingency Theory
Environment affects organizational behavior JamesThomson identified stability and homogeneity are
crucial contingencies for structure
Organizations adapt to unstable heterogeneous
environment through Decentralization
Increase in monitoring units and
Complex divisional structure
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Contingency Theory
Different contingencies have different impact Laurence and Lorsch Stability impacts differentiation,
formalization and centralization
Organizational technology Basic work flow, process and
methods
Fred Fiedler Leadership styles: Different situations with
different leders would give different outputs
Thus Contingency Theory
Substituted it all depends for One best way
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10
PlanningLearning overview
How do managers plan?
What types of plans do managers use?
What are the useful planning tools and techniques?
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How do managers plan?
Planning The process of setting objectives and determining how
to best accomplish them.
Objectives
Identify the specific results or desired outcomes thatone intends to achieve.
Plan
A statement of action steps to be taken in order to
accomplish the objectives.
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How do managers plan?
Steps in the planning process: Define your objectives.
Determine where you stand vis--vis objectives.
Develop premises regarding future conditions. Analyze and choose among action alternatives.
Implement the plan and evaluate results.
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The roles of planning and controlling in the
management process.
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How do managers plan?
Benefits of planning: Improves focus and flexibility.
Improves action orientation.
Improves coordination. Improves time management.
Improves control.
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A sample means-ends chain for total quality
management.
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What types of plans do managers use?
Short-range and long-range plans Short-range plans = 1 year or less
Intermediate-range plans = 1 to 2 years
Long-range plans = 3 or more years
People vary in their capability to deal effectively withdifferent time horizons.
Higher management levels focus on longer timehorizons.
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What types of plans do managers use?
Strategic and operational plans Strategic plans set broad, comprehensive, and
longer-term action directions for the entireorganization.
Operational plans define what needs to be donein specific areas to implement strategic plans. Production plans
Financial plans
Facilities plans Marketing plans
Human resource plans
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What types of plans do managers use?
Policies and procedures Standing plans
Policies and procedures that are designed for repeated use.
Policy
Broad guidelines for making decisions and taking action in
specific circumstances. Rules or procedures
Plans that describe exactly what actions are to be taken inspecific situations.
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What types of plans do managers use?
Budgets and project schedules Single-use plans
Only used once to meet the needs and objectives of a well-defined situation in a timely manner.
Budgets
Single-use plans that commit resources to activities, projects, orprograms.
Fixed, flexible, and zero-based budgets.
Projects
One-time activities that have clear beginning and end points.
Project management and project schedules.
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What are the useful planning tools and
techniques?
Forecasting Making assumptions about what will happen in the
future.
Qualitative forecasting uses expert opinions.
Quantitative forecasting uses mathematical and
statistical analysis.
All forecasts rely on human judgment.
Planning involves deciding on how to deal with the
implications of a forecast.
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What are the useful planning tools and
techniques?
Contingency planning
Identifying alternative courses of action that can be
implemented to meet the needs of changingcircumstances.
Contingency plans anticipate changing conditions.
Contingency plans contain trigger points.
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Study Question 3: What are the useful
planning tools and techniques?
Scenario planning A long-term version of contingency planning.
Identifying alternative future scenarios.
Plans made for each future scenario. Increases organizations flexibility and preparation for
future shocks.
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What are the useful planning tools and
techniques?
Benchmarking Use of external comparisons to better evaluate current
performance and identify possible actions for the future.
Adopting best practices of other organizations thatachieve superior performance.
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What are the useful planning tools and
techniques?
Use of staff planners
Coordinating the planning function for the total
organization or one of its major components.
Possible communication gaps between staff planners and
line management.
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What are the useful planning tools and
techniques?
Participation and involvement
Participatory planning requires that the planning
process include people who will be affected by theplans and/or will help implement them.
Benefits of participation and involvement:
Promotes creativity in planning.
Increases available information.
Fosters understanding, acceptance, and commitment to the
final plan.
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How participation and involvement help
build commitments to plans.