Every manager must know well the popular management approaches to manage the organization well.
The difference between a manager and a leader is that the leader leads his people, but the manager manages the resources well. Reference: https://bvop.org/journal/manager-vs-leader/ “Manager or Leader: What are the differences and similarities” By Louise Dupont (The Business Value-Oriented Principles Journal, VOL 2, 2021)
The management approach expresses the position, the point of view of the subject of management and gives the direction in the development of the management process. It also determines how the systems are managed.
The management approach is a set of theoretical and methodological positions that serve as a basis for managers. Based on them, the management process is realized. Reference: “Fundamentals of management and classification of management functions”, https://www.libraryofmu.org/fundamentals-of-management/
The management approach has some more important characteristics:
- Objective necessity – without a starting position of the rulers the management process cannot be carried out;
- Abstractness – only specifies the position of the subject of management;
- Comprehensiveness – finds manifestation in both the rulers and the ruled;
- Relative constancy – practically does not change for a relatively long period of time.
Management approaches are of the following types:
System management approach
This management approach is widely used not only in management science but also in technology, public life, and others. This approach is associated with the thesis that the object of knowledge can be approached as a system.
Based on a systems management approach, the organization can be considered as a system that consists of interconnected and interdependent elements. The organization as a system has an input and an output.
At the entrance are the production costs, and the exit is associated with the goal. The elements form the internal environment, and there is feedback. The management approach makes it possible to take into account all the necessary relationships and interactions in the management system.
The management approach allows the formulation of the goals and the restrictive conditions to indicate the management mechanism.
Modern socio-economic systems are distinguished by a number of features, namely:
- Increasing aggressiveness of the environment towards the system;
- Continuous and dynamic interaction of the elements that make up the system;
- Significantly increase and complicate the relationships between the elements;
- A continuous complication of the problems to be solved;
- Significant reduction of time for making management decisions;
- Increasing competition;
- Increasingly correct assessment of the place and importance of the human factor;
- Defining a new philosophy of development;
- Resource constraints, etc.
All this requires adequate changes in management approaches and in particular a systems approach. The main mistake that was made was that the system was studied as a simple, mechanical sum of individual elements.
With the general theory of systems, these problems are overcome, because the system is considered as a set of elements. The main tasks of the theory are:
- Formulation of the general principles and laws of the system regardless of their specific type, nature of their constituent elements, and relations between them.
- By analyzing objects as systems of a special type, establishing strict and precise laws.
- Creating the foundations for the synthesis of modern scientific knowledge.
The systems management approach helps to make informed management decisions
Ultimately, a systematic management approach helps to make informed management decisions. It can be considered as a system of two components:
The external environment, including input and output of the system and connections to the external environment;
Internal structure – a set of interconnected elements, ensuring the process of impact by the subject of management on the site and achieving the goals of the system.
In order to clarify the content of a systematic approach and its implementation, it is necessary to clarify the content of:
System – a set of elements that are connected in a certain way and the connections between them. Each of them contributes to building the overall characteristics of the system.
The system is a subjective category, and objectively only its elements exist.
Different criteria can be used to classify systems:
According to the degree of complexity:
simple systems – they do not stand out complex connections between the individual elements;
complex systems – there are complex connections between the individual elements;
Depending on the degree of accuracy:
deterministic systems – the behavior of their constituent elements can be determined quite accurately;
probability systems – the behavior of the system cannot be predicted;
According to their dependence on the environment:
closed systems – they have well-defined boundaries and do not depend on the external environment;
open systems – they interact with the external environment;
Depending on the changes that occur in the system:
static – they almost do not change the state of the system;
dynamic – there are significant changes, both in the elements that make up the system and in it.
Based on these criteria, the modern organization can be defined as a complex, probabilistic, open, and dynamic system.
Structure of the system – it reflects the individual parts of the elements of the system, which are in a certain dependence and combine local goals in connection with the achievement of the main goal.
Content of the system – is built by the factors of production.
Elements of the system – the smallest, indivisible parts of the whole. They exist independently but within the totality. Each element has a specific purpose, which is determined by the functions and activities it performs.
Subsystem – two or more elements in the system that have common characteristics.
Relationships – a form of manifestation of the relationship, ie. exchange of information between the individual elements.
Purpose of the system – the final state to which it seeks to be achieved over a period of time.
Relations in the system – the relationships between its elements, determined by the implementation of the strategic goal.
Development of the system – a process of interaction between the elements, aiming at achieving the main goal, in accordance with the action of objective laws.
System behavior – a way of interaction between the elements that make up the system and creating connections between them and the system and the environment.
When considering a systems approach, space should be given to the properties of systems, as they affect the quality of management decisions. In general, they can be formed into four main groups:
Properties characterizing the nature and complexity of the system:
Determining the importance of the system – the functioning of the elements is determined by the development and functioning of the system;
Independent development – the properties of the system are not a sum of the properties of the elements that make it up;
Dimensionality – includes the number of elements and the connections between them;
The complexity of the structure of the system – is determined by the possible states of the elements and the connections between them, as well as the constantly growing volume of information;
Relative stability – the elements that make up the system retain their number and properties for a relatively long period of time;
Vertical integrity – is determined by the number of hierarchical levels, the degree of interaction between them, the influence of the subject of management on the object;
Horizontal separation – the number of connections between the individual elements, located on a hierarchical level;
Hierarchy – each element can be considered as a subsystem of a larger system.
Properties characterizing the system’s connections with the external environment
Interconnection of the system with the external environment – the system functions and manifests its properties only in the process of interaction with the external environment;
Relative independence – despite the influence of environmental factors, the system exists independently, without changing the basic parameters of its appearance;
Openness – there is an exchange between the system and the external environment;
Compatibility – the system is compatible with other environmental systems.
Properties characterizing the targeting methodology of the system:
Purposefulness – each system is built in connection with pre-set goals. Determining is the preservation of the main, strategic goal;
Heredity – the patterns in the development of the individual elements and the system as a whole from the past and present have an impact on their future functioning;
Important for the development of a system are the qualities of the elements that make it up;
Reliability – this property is associated with the security of the system and depending on its type manifests itself in various aspects;
Optimality – characterizes the realization of the set goals, as well as the creation of optimal conditions for the use of the potential of the system;
Multiplicity – under certain conditions some properties of the system can be enhanced;
Emergence – the system may exhibit properties that are different from those of the elements that make it up.
Properties characterizing the parameters of the functioning and development of the system:
Continuous functioning and development of the system – the processes that take place in it are interconnected and conditioned. Its development depends on the functioning of the elements that make it up. The system exists as long as it works;
Alternative possibilities for functioning and development of the system – in front of each system there are different possibilities for development;
Synergy – the effect of the functioning of the system is not equal to the effect of the functioning of its elements;
Inertia – the so-called inertial forces, i.e. the past and the present have a stronger influence on the near future and a weaker influence on the more distant one;
Adaptability and mobility – the system must adapt and adapt to dynamic changes in the environment;
Organization – is associated with the dynamics of the behavior of the system and the elements that make it up and leads to sustainability;
Striving for innovation – the system should strive to create and implement innovations that ultimately have a positive impact on its effectiveness.
When following a systematic approach, it is necessary to follow certain rules:
The system forms its elements, not the other way around.
The properties of the system are decisive in terms of the properties of the elements.
The number of elements of the system must be minimal, but sufficient to achieve the set goals.
In connection with the simplification of the structure of the system, the hierarchical levels, the connections between the elements of the system, etc. should be shortened.
The system must be set up in such a way as not to impede the movement of information both from top to bottom and from bottom to top.
The structure of the system must be built to respond to the dynamic changes of the system and the environment in which it develops.
The connections in the system need to be minimal and properly directed so that the information flows can flow as fast as possible.
The construction of the hierarchical levels begins with the definition of the highest management level, ie. it starts from the top down.
When determining the impact of the external environment on the system, all factors are taken into account.
The system needs to be built in such a way that it depends as little as possible on the external environment.
The organization should be such that it is possible to exchange information with other systems.
In order to design and operate an effective structure of the system, it is necessary to build the so-called. goal tree.
When providing the system with resources, it is necessary to look for opportunities where efficiency is greatest.
The interests of the system take precedence over its elements.
The operation of each element must be subordinated to the general functioning of the system.
In the search for efficiency it is necessary to take into account not only economic but also social, technological, environmental, and others.
For the formation of the properties of the system the internal structure of the whole is important, ie. the relationship between the elements and their order.
The application of a systematic approach contributes to the correct definition of the tasks and to the derivation of the essential dependencies.
The system approach is realized through system analysis, and for this purpose, the following stages can be indicated:
Every organization, process, or phenomenon is considered a system.
Revealing the internal characteristics and patterns in its development.
Accurate determination of the influence of the external environment.
Based on complex analysis, models of system behavior are developed.
Building a unit to predict the future development of the system and changes in the external environment.
Concretizing the possibilities for the impact of the environment on the system.
Search for opportunities for effective system development.
Situational management approach
For this management approach, the specific situation is decisive. What is important for him is the given situation, ie. the specific variables that affect the organization at a specific time and place. The specific situation has a strong impact on overall governance.
The situational approach is a concept of management in which the management process is determined depending on the specific situation (specific external and internal factors that characterize and influence the system) in order to achieve the set goals with the least undesirable deviations, in the shortest possible time. terms and at the lowest cost.
In the situational approach, the importance of the subjective factor is decisive, as there are no “recipes” for effective management in different situations.
Here the more important situational variables and their influence on the development and functioning of the organizations are determined. When solving each problem inside and outside the organization, the specific situation must be taken into account.
According to Michael Mescon, Michael Albert, and Franklin Fedora, the situational approach can be seen as a four-step process:
The manager must know the means of professional management that have proven their effectiveness.
This imposes the need for additional knowledge about the management process, individual and group behavior, systematic analysis, methods of planning and control, and quantitative methods for management decisions.
Management concepts have strengths and weaknesses
Each of the management concepts has strengths and weaknesses or comparative characteristics in cases where they adapt to a specific situation. Therefore, the manager must be able to anticipate the likely consequences – positive or negative.
The manager must be able to correctly interpret the situation. It is necessary to determine exactly which factors are most important in a given situation and what is the probable effect that can lead to changes in one or more variables. Reference: “The profession of the manager: How to become one”, https://scrumtime.org/profession-of-the-manager/
The manager must be able to attach any techniques that would cause the slightest negative effect. In specific situations, he should ensure the achievement of the goals of the organization in the most effective ways in the current situation.
The situational approach determines the internal and external variables that affect the organization. In order to carry out effective management, the government should take into account the specific situation.
Program-targeted management approach
A program-targeted management approach can be defined as a system for planning, programming, and budgeting.
This approach is based on the thesis that the potential of a system is used significantly better if the relevant goals are set in advance.
The approach under consideration can be defined as a system of three units, consisting of the following parts:
Objectives – planning, forecasting a certain result or desired state of the organization, which it must achieve over a certain period of time.
The goals stem from the mission of the organization. Based on them, the corporate and functional strategy and the means for their achievement are determined.
The goals are the starting points of planning, are the basis for building organizational relationships and structures, they are based on the system of stimulation, control, and evaluation of work results.
The setting of goals is carried out under the influence of different interests, which can be classified on the basis of different criteria. Some of them are: economic, social, environmental, interests of owners, interests of consumers.
Objectives can be classified on the basis of various criteria, eg: strategic, tactical, operational, long-term, short-term, significant, insignificant, functional, objectives related to financial resources, etc.
Management is always characterized by a multitude of goals. For effective management, it is imperative that they be analyzed, evaluated, and ranked in order of importance in order to optimize the use of resources.
Program – is a set of activities that are related to specific contractors and are distributed over time in connection with the achievement of the set goal.
The program covers a long period of time and helps to link objectives to resources. As a result of the program, the individual sub-goals are implemented.
Program-target structure – it connects to the matrix structure. Using its advantages is crucial for the implementation of the approach.
Economic management approach
An economic management approach is built on the use of objective economic laws and categories. It applies the methodological provisions of business management, which aim at optimal use of material incentives. Although he relies on economic means, he does not reject others such as administrative, psychological, and others. Today, the economic approach is crucial to our reality.
The main task of this approach is for the impact to reflect the operation of objective economic laws. It should also contribute to the building of economic thinking and behavior.
The scarcity of resources, the dynamic changes in the organization, the relations between organizations, the state, etc., the way of distribution of goods, commodity-money relations, etc. necessitate an economic approach.
The economic approach is too abstract to address practical issues. It only indicates the positions of the rulers.
And in order to put it into action, concretization is needed. It is realized through the economic mechanism.
The economic mechanism can be considered as a set of economic “instruments” (principles, methods, etc.), which regulate the relationship between organizations in order to function effectively.
The main goal of the economic mechanism is the practical implementation of the economic approach in connection with the effective development of individual organizations.
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Dependence between the economic management approach and the economic mechanism
There is an interdependent connection and dependence between the economic approach and the economic mechanism. That is: the practical realization of the approach is carried out through the economic mechanism, and on the other hand the mechanism cannot exist without the starting position of those in power.
Apart from similarities, there are also differences between the economic approach and the economic mechanism.
The first defines the basic principles and methods to which the formation of the relevant farm management mechanism should be subject.
And the second covers the immediate forms, levers, and means (economic categories) used according to the economic approach. Ie the approach determines the way of managing the economy, and the mechanism – the means by which this process is carried out.
At this stage, the application of different management approaches is extremely important.