Examples Of Contingency Theory

Introduction

Systems and Contingency theory recognizes that external factors as well as internal factors affect management. The Contingency theory is offered as an alternative to Open Systems theory as the foundation for improved organizational performance, since it can provide more precise conceptual variables. In addition, providing a way of distinguishing between organizations as well as situations faced by organizations (or the same organization over time) is an aspect systems and contingency theory focuses on. Systems theory and contingency theory therefore attempt at providing an understanding of how organizations ought to be structured. The following paper will discuss the systems theory and the contingency theory. This will be done

What one does, is dependent on the situation. The situation can depend on internal or external contingency factors. Internal contingency factors include tasks, technology, structure, and people. External factors on the other hand comprise of economic factors, technological factors, political factors, and socio-cultural factors. Contingency theory declares that when managers make a choice, they have to take into account all aspects of the present situation and perform on those aspects which are keys to the situation at hand. This suggests that since organizations communicate with its environment; neither the organization nor any of its subsystems is permitted to take complete action (Nobin, 2016, p.

This approach tends to predict the ultimate outcome of a disturbance of the organisational equilibrium by a change in the task environment (Chand, 2015). It is a management approach that considers an organization’s objectives, organization and job design, human resources, environment and managerial skills as interacting and affecting the type of management decisions made about planning, organizing, leading and controlling (Sehgal, 2016, p. 14). The contingency approach takes into consideration not only given situations but also the impact of given solutions on behaviour patterns of an organization (Reddy, 2016, p. 7). With that being said, it is important to remember that structure and management are situational on the nature of the environment in which the organization is positioned.

The contingency theory has emerged out of the systems theory. Contingency theorists have acknowledged the basic tenets of systems approach. They accept the basic feature of the organization - environment relationship and dynamic nature of organization (Chand, 2015). This therefore conveys that contingency theorists talk frequently in terms of structural change in the organization in reaction to a change in the environment (Chand,