Modern Organization Theory

Quantitative and Analytical

Management Tools
Operations-Management Tools
The Systems Viewpoint
The Contingency Viewpoint
Quality Control and Assurance
Evidence-Based Management
 Quantitative and Analytical Management Tools

Many quantitative and analytic tools are available for managers

to better understand workflow processes, financial management,
and employee efficiency.

A decision tree is a decision support tool that uses a tree-like

graph or model of decisions and their possible consequences,
including chance event outcomes, resource costs, and utility.

Simulation is the imitation of a real-world process or system over

time.
 Trend charts are often used in management to display data over
time to explore any potential trends, either positive or negative,
that require additional attention by management. It is important to
use statistical confidence intervals when utilizing this type of
forecast.

Benchmarking allows a manager to see how different aspects of a

business are performing compared to national, regional, and
industry standards. It also allows management to explore how the
company is performing compared to its competitors.

Financial projections and net-present-value (NPV) analyses are

also commonplace when deciding upon new operations
quantitativelywhere the company predicts profitability in today's
dollars.
 Operations-Management Tools
The main tools of operations management come from two popular
theories of organizing business: Six Sigma and Lean.

Six Sigma relies on particular quality-management methods, such as

statistical analytics, and creates a special infrastructure of employees
within an organization (e.g., "Black Belts," "Green Belts") who are
experts in these methods.

Lean is a production theory that considers the expenditure of

resources for any goal other than the creation of value for customers
wasteful, and thus a good target for elimination.

By leveraging operational paradigms constructed to deliberately

capture value through maximizing efficiency, managers can lower
costs for companies and prices for consumers.
 The Systems Viewpoint
Systems thinking is an approach to problem solving that views
problems as part of an overall system. This is opposed to problem-
solving strategies that only focus on specific parts or outcomes of a
problem.

Systems thinking approaches problems as a set of habits or

practices within a framework. It is based on the belief that the
component parts of a system are best understood in the context of
their relationships with each other rather than in isolation.

Systems thinking is opposed to fragmented thinking, which involves

thinking about specific problems without considering the context,
environment, and effects of similar problems.
 The Contingency Viewpoint

The contingency viewpoint is a more recent

development in organizational theory that
attempts to integrate a variety of management
approaches, proposing that there is no one best
way to organize a corporation or lead a
company.

Debating which one of the previous approaches

to management is the "best" approach is
irrelevant in contingency theory, since the heart
of the contingency approach is that there is no
"one best way" for managing and leading an
organization.
The contingency viewpoint focuses on management's
ability to achieve alignments and good fits between
employees and circumstances by considering multiple
solutions to determine the best one for each particular
problem.
The focal point, and modern relevance, of this
perspective is the concept of adaptability. Technology
and globalization evolve the business environment so
rapidly that adaptable strategies are more appropriate
than static ones, making contingencies key to success.
 Quality Control and Assurance
Quality assurance (QA) refers to planned and systematic activities
implemented in a quality system to fulfill the quality requirements for a
product or service.

Quality control (QC) is a process by which products are tested to uncover

defects and the results are reported to management, which makes the
decision to allow or deny product release.

Quality control and quality assurance work together to make sure that a
company's products have the lowest possible error rate.

As global markets expand, and as outsourcing becomes common practice,

QC and QA are increasingly important strategic initiatives. When companies
do not control their manufacturing process, they must invest in controlling the
quality of their vendors.
 Evidence-Based Management
Evidence-based management is rooted in evidence-based
medicine, a movement to apply the scientific method to
medical practice. Evidence-based management is an
emerging movement to explicitly use current best
practices in managerial decision-making.

Evidence-based management bases managerial

decisions and organizational practices on the best
available scientific evidence.

While there is a rich body of academic literature pertaining

to tried-and-true managerial strategies, real-world
application of such resources is relatively rare.
Promoting evidence-based management is challenging
because it can conflict with traditional definitions and
expectations of management.

Little shared terminology exists between managers of

different companies, which makes it difficult for
managers to hold discussions on evidence-based
practices. The adoption of evidence-based practices is
likely to be organization-specific instead of happening
across organizations.