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Business Jargons

A Business Encyclopedia

Modern Theory

Definition: The Modern Theory is the integration of valuable concepts of the classical models with the social and behavioral sciences. This theory posits that an organization is a system that changes with the change in its environment, both internal and external.

There are several features of the modern theory that make it distinct from other sets of organizational theories, these are:

  1. The modern theory considers the organization as an open system. This means an organization consistently interacts with its environment, so as to sustain and grow in the market. Since, the organization adopts the open system several elements such as input, transformation, process, output, feedback and environment exists. Thus, this theory differs from the classical theory where the organization is considered as a closed system.
  2. Since the organization is treated as an open system, whose survival and growth is determined by the changes in the environment, the organization is said to be adaptive in nature, which adjusts itself to the changing environment.
  3. The modern theory considers the organization as a system which is dynamic.
  4. The modern theory is probabilistic and not deterministic in nature. A deterministic model is one whose results are predetermined and whereas the results of the probabilistic models are uncertain and depends on the chance of occurrence.
  5. This theory encompasses multilevel and multidimensional aspects of the organization. This means it covers both the micro and macro environment of the organization. The macro environment is external to the organization, while the micro environment is internal to the organization.
  6. The modern theory is multi-variable, which means it considers multiple variables simultaneously. This shows that cause and effect are not simple phenomena. Instead, the event can be caused as a result of several variables which could either be interrelated or interdependent.

The scientists from different fields have made major contributions to the modern theory. They emphasized on the importance of communication and integration of individual and organizational interest as prerequisites for the smooth functioning of the organization.

Related terms:

  1. Organizational Theory
  2. Modern Theories of Inflation
  3. Cognitive Learning Theory
  4. NeoClassical theory
  5. Theory X and Theory Y

Reader Interactions

Comments

  1. murshid says

    April 29, 2019 at 3:37 pm

    dear sir

    i would like to get PDF copy if you dont mind shows the modern theory author just to reference the book.

    thank you

    Reply
    • SMMakvana says

      March 27, 2020 at 6:54 pm

      Yes, it is very much useful

      Reply
      • Naiwumbwe Hellen says

        October 3, 2022 at 11:24 pm

        It really helped me in my research. Thank you.

        Reply
    • Binta Bojang says

      June 5, 2021 at 9:58 am

      It is indeed useful and helps me a lot with my research. Thank you

      Reply
  2. Oyigbo blessing says

    May 3, 2019 at 7:40 pm

    Sir pls I need the assumptions of modern theory…….. Thanks

    Reply
  3. Mwila Sekeskeke says

    April 2, 2021 at 5:54 pm

    Good day, may I request for the PDF document for the prupose of reference

    Reply
  4. Julius ADEOYE says

    January 6, 2022 at 10:33 am

    I really enjoyed the materials, it enriches my knowledge and widen my horizon

    Reply

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