Entropy is a universal property of systems and refers to their tendency to run down and die. If a system does not receive fresh inputs and energy from its environment, it will eventually cease to exist. Organizations must monitor their environments adjust to changes and continuously bring in new inputs in order to survive and prosper. Managers try to design the organization / environment interfaces to reduce entropy.

Synergy means that the whole is greater than the sum of its parts. When an organization is formed, something new comes into the world. Management coordination and production that did not exist before are now present. Organizational units working together can accomplish more than those same units working alone.

Subsystems are parts of a system that depend on one another. Changes in one part of the organization affect other parts. The organizations must be managed as a coordinated whole. Managers who understand subsystem interdependence are reluctant to make changes that do not recognize subsystem impact on the organization as a whole. For example, at Buckman Laboratories international the successful implementation of a new knowledge sharing network required changes in organizational structure, job design, work processes, and cultural, values. Buckman’s vertical hierarchy was dismantled and replaced by coordinated teams focused on horizontal work processes. Cultural values had to be shifted to emphasize collaboration and sharing rather than hoarding information. A change of this nature might take quite some time because of the interconnection of the organization’s subsystems.

Contingency View:

An extension of the humanistic perspective in which the successful resolution of organizational problems depend up on manager’s identification of key variations in the situation at hand.

A second contemporary extension to management thinking is the contingency view. The classical perspective assumed a universal view. Management concepts were thought to be universal, that is, whatever worked – leader style bureaucratic structure in one organization would work in another. In business education, however, an alternative view exists. This is the case view, in which each situation is believed to be unique. There are no universal principles to be found, and one learns about management by experiencing a large number of case problem situations. Managers face the task of determining what methods will work in every new situation.

To integrate these views the contingency view has emerged as illustrated in Exhibit. Here neither of the other views is seen as entirely correct. Instead certain contingencies or variables exist for helping management identify and understand situations. The contingency view means that a manager’s response depends on identifying key contingencies in an organizational situation. For example a consultant might mistakenly recommend the same management by objectives (MBO) system for manufacturing firm that was successful in a school system. The contingency view tells us that what works in one setting might not work in another. Management’s job is to search for important contingencies. When managers learn to identify important patterns and characteristics of their organizations they can then fit solutions to those characteristics.

Important contingencies that managers must understand include industry, technology, the environment and international cultures. Management practice in a rapidly changing industry for example will be very different from that in a stable one.

The quality movement in Japan emerged partly as a result of American influence after World War II. The ideas of W Edward Deming known as the father of the quality movement were initially scoffed at in America but the Japanese embraced his theories and modified them to help rebuild their industries into world powers. Japanese companies achieved a significant departure from the American model by gradually shifting from an inspection oriented approach to quality control towards an approach emphasizing employee involvement in the prevention of quality problems.

Source: The New Era of Management