Contingency Theory- Jun Armas

8/6/2019 Contingency Theory- Jun Armas

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S U B J E C T : E C O L O G Y O F M A N A G E M E N T

P R O F E S S O R : M A R N I T O M U O ZR E P O R T E D B Y : D I O N I C I O A R M A S

D A T E : A U G U S T 0 6 , 2 0 1 1

Contingency Theory



Ov er v iew

y Definition

y Theories

y Principle

y Application, Weakness and Strength

y References



Tri v ia! Science with no formula?

y Management has a systematic body of knowledge butit is not as exact as that of other physical scienceslike biology, physics, and chemistry etc.

y Why?

y

The main reason for the inexactness of science of management is that it deals with human beings andit is v ery difficult to predict their beha v ior accurately.



Definition

y Contingency Theory

y (possibilities!!!)

y

Is part of situational analysis management andmanagement science.

y Is a class of beha v ioral theory that claims that there is no best way to organize a corporation, to lead a company, or

to make decisions. Instead, the optimal course of actionis contingent (dependent) upon the internal and externalsituation.



Theories

Contingency approaches were de v eloped concurrently in the late 1960s.

They suggested that pre v ious theories suchas ´Weber's bureaucracy and Taylor's scientificmanagement had failed because they neglected thatmanagement style and organizational structure were

influenced by v arious aspects of the en v ironment:the contingency factors´



Simplified Contingency Model



Who are they? Theorist«

y Joan Woodward (1958), who argued that technologies directly determine differences in such organizational attributes asspan of control, centralization of authority, and theformalization of rules and procedures.

y Gareth Morgan in his book Images of Organization describesthe main ideas underlying contingency in a nutshell: Organizations are open systems that need careful management to satisfy

and balance internal needs and to adapt to en v ironmental circumstances There is no one best way of organizing. The appropriate form depends on

the kind of task or en v ironment one is dealing with. Management must be concerned, abo v e all else, with achie v ing

alignments and good fits Different types or species of organizations are needed in different types

of en v ironments




y Stress is a key determinant of leadereffecti v eness (Fiedler and Garcia 1987;Fiedler et al. 1994), and a distinction is

made between stress related to the leader¶ssuperior, and stress related to subordinatesor the situation itself.

Fred Fiedler's contingency model focused onindi v idual leadership.




y William Richard Scott describes contingency theory in thefollowing manner: "The best way to organize depends on thenature of the en v ironment to which the organization mustrelate".

y Researchers Paul Lawrence, Jay Lorsch, and James D.Thompson belie v e that structural contingency theory was thedominant paradigm of organizational structural for most of the 1970s.

y A major empirical test was furnished by Johannes M Pennings who examined the interaction between en v ironmentaluncertainty, organization structure and v arious aspects of performance.



Principles of Contingency Theory

y There is no single best way of managementapplicable to all situations.

y

In order to be effecti v e, the internal functioning of anorganization should co-relate to the demands of external en v ironment.

y

The managers must regulate the organizationalfunctions in harmony with the needs of the people,i.e. members from within and customers and otherexternally.



Characteristics of Popular Management System

y Collecti v e decision making with ultimateresponsibility lying with one person.

y Close personal relationships.

y Trust

y Emphasis on interpersonal skills.

y Respect and v alue of employees

y

Long-term employmenty Community feeling at work.



Applications

y Aligning leadership style with situationalfa v orableness for the most effecti v e results.

y Can be applied in all body of science and studies.

Accounting

Information Technology

Psychology and Human Beha v ior

Planning

Etc«



Strength and Weakness

y It treats each organization as a unique entity.

y It identifies the exact nature of interdependenciesand their impact on organizational design and

managerial style.y It is more pragmatic, down to earth and action

oriented.

y It firmly rejects blind application of principles

regardless of realities of indi v idual situations.

y It relates organizational structure and design to theen v ironment



References

y http://en.wikipedia.org/wiki/Contingency_theory

y http://www. v aluebasedmanagement.net/methods_c

ontingency_theory.html, management summary of contingency

y theoryhttp://changingminds.org/disciplines/leaders

hip/theories/contingency_theory.htm, brief summary of contingency theory



Thank You

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Contingency Theory- Jun Armas