Contingency School of Management
Contingency School
of
Management is a trend of management thought, which is based on the
premises that there is no single best way to manage because every
situation and every manager is different. Therefore, there are only a
few universal management principles, and an appropriate management style
depends on the demands of a particular situation. See also classical
school of management, quantitative school of management, and systems
school of management.
The contingency school
of management can be summarized as an �it all depends� approach. The
appropriate management actions and approaches depend on the situation.
Managers with a contingency view use a flexible approach, draw on a
variety of theories and experiences, and evaluate many options as they
solve problems.
Contingency
management recognizes that there is no one best way to manage. In
the contingency perspective, managers are faced with the task of
determining which managerial approach is likely to be most effective in
a given situation. For example, the approach used to manage a group of
teenagers working in a fast-food restaurant would be very different from
the approach used to manage a medical research team trying to find a
cure for a disease.
Contingency thinking
avoids the classical �one best way� arguments and recognizes the need to
understand situational differences and respond appropriately to them. It
does not apply certain management principles to any situation.
Contingency theory is a recognition of the extreme importance of
individual manager performance in any given situation. The contingency
approach is highly dependent on the experience and judgment of the
manager in a given organizational environment.
Contingency theory
refers to any of a number of management theories. Several contingency
approaches were developed concurrently in the late 1960s.
They suggested that
previous theories such as
Weber's bureaucracy and
Taylor's
scientific management had failed
because they neglected that management style and organizational
structure were influenced by various aspects of the environment: the
contingency factors. There could not be "one best way" for leadership or
organization.
Historically,
contingency theory has sought to formulate broad generalizations about
the formal structures that are typically associated with or best fit the
use of different technologies. The perspective originated with the work
of Joan Woodward
(1958), who argued that technologies directly determine differences in
such organizational attributes as span of control, centralization of
authority, and the formalization of rules and procedures.
Fred Fiedler's
contingency model focused on
individual leadership.
Other researchers
including Paul Lawrence,
Jay Lorsch, and
James D. Thompson
were more interested in the impact of contingency factors on
organizational structure. Their structural contingency theory was the
dominant paradigm of organizational structural theories for most of the
1970s. A major empirical test was furnished by
Johannes M. Pennings
who examined the interaction between environmental uncertainty,
organization structure and various aspects of performance.
Contingency School
began in 1960s. The contingency school focused on applying management
principles and processes primarily dictated by each unique situation. In
the contingency theory, a leader�s ability to lead is contingent upon
various situational factors. Its application has been on management
issues such as organizational design, job design, motivation, and
leadership style.
A few of the major
contributors are Fred
Fiedler, Joan
Woodward, and Paul
Lawrence. The Contingency Theory states that the leader's ability to
lead is contingent upon various situational factors.
Contingency School of Management
Obviously, these
schools made a significant contribution to modern day management, and
these early results provide a blueprint for the current leadership
paradigms in organizations.
The contingency school
of management is based on the idea that there is no one best way to
manage and that to be effective, planning, organizing, leading, and
controlling must be tailored to the particular circumstances faced by an
organization. Managers have always asked questions such as "What is the
right thing to do? Should we have a mechanistic or an organic structure?
A functional or divisional structure? Wide or narrow spans of
management? Tall or flat organizational structures? Simple or complex
control and coordination mechanisms? Should we be centralized or
decentralized? Should we use task or people oriented leadership styles?
What motivational approaches and incentive programs should we use?" The
contingency approach to management (also called the situational
approach) assumes that there is no universal answer to such questions
because organizations, people, and situations vary and change over time.
Thus, the right thing to do depends on a complex variety of critical
environmental and internal contingencies.
Historical Overview of
Contingency School
Classical management theorists such
as Henri Fayol and
Frederick Taylor
identified and emphasized management principles that they believed would
make companies more successful. However, the classicists came under fire
in the 1950s and 1960s from management thinkers who believed that their
approach was inflexible and did not consider environmental
contingencies. Although the criticisms were largely invalid (both
Fayol and
Taylor, for
example, recognized that situational factors were relevant), they
spawned what has come to be called the contingency school of management.
Research conducted in the 1960s and 1970s focused on situational factors
that affected the appropriate structure of organizations and the
appropriate leadership styles for different situations. Although the
contingency perspective purports to apply to all aspects of management,
and not just organizing and leading, there has been little development
of contingency approaches outside organization theory and leadership
theory. The following sections provide brief overviews of the
contingency perspective as relevant to organization theory and
leadership.
Contingency
Perspective and Organization Theory
Environmental change
and uncertainty, work technology, and the size of a company are all
identified as environmental factors impacting the effectiveness of
different organizational forms. According to the contingency
perspective, stable environments suggest mechanistic structures that
emphasize centralization, formalization, standardization, and
specialization to achieve efficiency and consistency. Certainty and
predictability permit the use of policies, rules, and procedures to
guide decision making for routine tasks and problems. Unstable
environments suggest organic structures which emphasize decentralization
to achieve flexibility and adaptability. Uncertainty and
unpredictability require general problem solving methods for nonroutine
tasks and problems. Paul Lawrence and Jay Lorsch suggest that
organizational units operating in differing environments develop
different internal unit characteristics, and that the greater the
internal differences, the greater the need for coordination between
units.
Joan Woodward found
that financially successful manufacturing organizations with different
types of work technologies (such as unit or small batch; large-batch or
mass-production; or continuous-process) differed in the number of
management levels, span of management, and the degree of worker
specialization. She linked differences in organization to firm
performance and suggested that certain organizational forms were
appropriate for certain types of work technologies.
Organizational size is
another contingency variable thought to impact the effectiveness of
different organizational forms. Small organizations can behave
informally while larger organizations tend to become more formalized.
The owner of a small organization may directly control most things, but
large organizations require more complex and indirect control
mechanisms. Large organizations can have more specialized staff, units,
and jobs. Hence, a divisional structure is not appropriate for a small
organization but may be for a large organization.
In addition to the
contingencies identified above, customer diversity and the globalization
of business may require product or service diversity, employee
diversity, and even the creation of special units or divisions.
Organizations operating within the United States may have to adapt to
variations in local, state, and federal laws and regulations.
Organizations operating internationally may have to adapt their
organizational structures, managerial practices, and products or
services to differing cultural values, expectations, and preferences.
The availability of support institutions and the availability and cost
of financial resources may influence an organization's decision to
produce or purchase new products. Economic conditions can affect an
organization's hiring and layoff practices as well as wage, salary, and
incentive structures. Technological change can significantly affect an
organization. The use of robotics affects the level and types of skills
needed in employees. Modern information technology both permits and
requires changes in communication and interaction patterns within and
between organizations.
Contingency
Perspective and Leadership
Dissatisfaction with
trait-based theories of leadership effectiveness led to the development
of contingency leadership theories.
Fred Fiedler, in the
1960s and 1970s, was an early pioneer in this area. Various aspects of
the situation have been identified as impacting the effectiveness of
different leadership styles. For example,
Fred Fiedler suggests
that the degree to which subordinates like or trust the leader, the
degree to which the task is structured, and the formal authority
possessed by the leader are key determinants of the leadership
situation. Task-oriented or relationship oriented leadership should
would each work if they fit the characteristics of the situation.
Other contingency
leadership theories were developed as well. However, empirical research
has been mixed as to the validity of these theories.
References
http://www.businessdictionary.com/definition/contingency-school-of-management.html
http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/Contingency-School-of-Management.topicArticleId-8944,articleId-8854.html
http://en.wikipedia.org/wiki/Contingency_theory
http://ezinearticles.com/?The-Evolution-of-Leadership:-An-Academic-Perspective---Nu-Leadership-Series&id=394786
http://www.enotes.com/management-encyclopedia/contingency-approach-management
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