The sociotechnical approach works well in the internal environment because it’s focus is on the workers and their tools, training and knowledge. The quantitative approach works well in all three environments. Since it pulls and analyzes all types of data it can be used as a tool to develop and improve all three environments. The organizational approach puts its focus on the behaviors of the employees of the organization, so it fits in best with the internal environment. Systems theory looks at an organization as an open system which involves all three environments. It can be effectively used to consider the internal, external and macro-environments because all affect the organization. All the approaches have their place in a system and an organization would be best suited to always consider each in their analysis of
Contemporary Approaches to Management
Article shared by : ADVERTISEMENTS: Contemporary Approaches to Management provides a framework of management practices based on more recent trends, such as globalization, theory Z concepts, McKinsey’s 7-S approach, excellence models, productivity and quality issues, etc. With the appearance of global entities like the World Trade Organization [WTO] and the European Economic Community [EEC], we are all now operating in a global economy. Our managers now need to think globally even while operating in the domestic market. We are losing our market shares even in our domestic market because of competition from foreign companies. Hence, understanding management with a global perspective has now become important. Theory Z concepts pioneered by Ouchi and Jaeger [1978] incorporate Japanese and American management culture and emphasize on the need to study and adopt appropriate management practices from other countries. The concept can be understood from the information in Table 2.4.1. Theory Z Concepts:
2. McKinsey’s 7-S Framework:
McKinsey’s 7-S framework identified seven independent organizational factors that need to be managed by today’s managers.
These factors are:
1. Strategy—to determine allocation of scarce resources and to commit the organization to a specific course of action
2. Structure—to determine the number of levels [in hierarchy] and authority centres
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3. Systems—to determine organizational processes, procedures, reports, and routines
4. Staff—to determine key human resource groups in an organization and describe them demographically
5. Style—to determine the manner in which managers should behave for achieving organizational goals
6. Super-ordinate goals [shared vision]—to determine the guiding concepts that an organization needs to instil in its members
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7. Skills—to determine the abilities of people in an organization
The 7-S framework suggests that any change in any S factor may result in adjustment of other S factors. Now, however, the concept of 8-S has been introduced by adding one more S—Streaming. Streaming includes those areas that either directly or indirectly influence or shape all the 7-S.
For example, governmental regulations have an impact on organizational strategy. Certainly, the competition has an influence on structure, systems, and even vision. Another example would include what is happening in the global economy.
All of these factors exist outside of the organization in an area called the stream. Companies, in order to ensure alignment and development, need to take into account not only internal components, but also what is happening outside of the organization. Peters and Waterman [1982] in their pioneering work In Search of Excellence identified some common characteristics of excellent organizations.
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The characteristics have now become important management principles:
1. A bias for action—Excellent firms make things happen.
2. Closeness to the customer—These firms know their customers and their needs.
3. Autonomy and entrepreneurship—They value these in each employee.
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4. Productivity—They achieve this through people, based on trust.
5. Hands-on, value-driven management—They make it mandatory.
6. Stick to the knitting—They always deal from strength.
7. Simple form, lean staff—They develop cost-effective work teams.
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8. Simultaneous loose-tight properties—They decentralize many decisions but retain tight overall control.
Global competition has also accentuated the need for enhancing quality and productivity. These two are the basic requirements to retain competitive advantage for any organization. Hence, management practices should focus on these by developing human resources to sustain their competitive advantage.