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Business Management Notes.docx
Organizational Leadership (Texas A&M University-Commerce)
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Business Management Notes:
Learning Unit 1: Composition of the Management Environment
Chapter 4
Theme 1: Making Management Decisions
Discuss the importance of the management environment when making
management decisions.
Explain the concepts of the process, systems and contingency
approaches in management.
The importance of the management environment and its impact on decision making:
Change in management environment after cold war – became increasingly
rapid and turbulent
Globalisation signalled a radical transformation of the world
Information technology have caused structural changes in the world economy
Growth in interdependence between politics, economics, social dimension
and technology
The pace of events and the speed with which effects are transmitted between
parts of the management environment create difficulties in terms of the
managers comprehension
In this environment, managers must sort what is important to his/her specific
organisation
Managers require the means to identify strengths, weaknesses, opportunities
and threats within the environment correctly to empower them to make better
choices in their managerial functions (POLC)
Management theories and the management environment:
1. The Process approach
This approach is based on the 4 main functions of Management.
Planning.
Organising
Leading
Controlling
These functions are seen as circular and continuous.
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2. The Systems approach
A system of interrelated and interdependent parts all working together to
achieve a common goal
Systems can be open or closed (closed systems do not interact with its
environment)
The organization, which is a system is therefore in constant interaction with its
environment and is influenced by both industry specific and general
environments
When individual systems or sub-systems combine well together to produce
something that they could not produce individually, it is called synergy.
Entropy is a word used to describe systems that are in disintegration.
Study section 3.2 in your textbook - concept of systems theory and the four
concepts of: open system, sub-systems, synergy and entropy.
3. The Contingency approach
This system is based on the systems approach
Its basic premise is that the application of management principles depends on
the specific situation that managers face at a given point in time
Managers need to sum up a situation and act on it using his/her management
toolkit and resolve the situation with the best possible outcome being a win-
win situation
This approach acknowledges that each organisation is unique, with its own
staff, values, goals and culture.
Downloaded by Sinenkosi Mthembu ()
Business Management Notes.docx
Organizational Leadership (Texas A&M University-Commerce)
StuDocu is not sponsored or endorsed by any college or university
Downloaded by Sinenkosi Mthembu ()
, lOMoARcPSD|4568621
Business Management Notes:
Learning Unit 1: Composition of the Management Environment
Chapter 4
Theme 1: Making Management Decisions
Discuss the importance of the management environment when making
management decisions.
Explain the concepts of the process, systems and contingency
approaches in management.
The importance of the management environment and its impact on decision making:
Change in management environment after cold war – became increasingly
rapid and turbulent
Globalisation signalled a radical transformation of the world
Information technology have caused structural changes in the world economy
Growth in interdependence between politics, economics, social dimension
and technology
The pace of events and the speed with which effects are transmitted between
parts of the management environment create difficulties in terms of the
managers comprehension
In this environment, managers must sort what is important to his/her specific
organisation
Managers require the means to identify strengths, weaknesses, opportunities
and threats within the environment correctly to empower them to make better
choices in their managerial functions (POLC)
Management theories and the management environment:
1. The Process approach
This approach is based on the 4 main functions of Management.
Planning.
Organising
Leading
Controlling
These functions are seen as circular and continuous.
Downloaded by Sinenkosi Mthembu ()
, lOMoARcPSD|4568621
2. The Systems approach
A system of interrelated and interdependent parts all working together to
achieve a common goal
Systems can be open or closed (closed systems do not interact with its
environment)
The organization, which is a system is therefore in constant interaction with its
environment and is influenced by both industry specific and general
environments
When individual systems or sub-systems combine well together to produce
something that they could not produce individually, it is called synergy.
Entropy is a word used to describe systems that are in disintegration.
Study section 3.2 in your textbook - concept of systems theory and the four
concepts of: open system, sub-systems, synergy and entropy.
3. The Contingency approach
This system is based on the systems approach
Its basic premise is that the application of management principles depends on
the specific situation that managers face at a given point in time
Managers need to sum up a situation and act on it using his/her management
toolkit and resolve the situation with the best possible outcome being a win-
win situation
This approach acknowledges that each organisation is unique, with its own
staff, values, goals and culture.
Downloaded by Sinenkosi Mthembu ()
