CONTINGENCY THEORY IS A CLASS OF BEHAVIORAL THEORY THAT CLAIMS THAT THERE IS NO BEST WAY TO ORGANIZE A CORPORATION, TO LEAD A COMPANY OR TO MAKE DECISIONS.
“THE BEST WAY TO ORGANIZE DEPENDS ON THE NATURE OF THE ENVIRONMENT TO WHICH THE ORGANIZATION RELATES.” William Richard Scott
CONTINGENCY THEORY TELLS US THAT AN ORGANIZATION IS MOST EFFECTIVE WHEN IT ADAPTS AND FITS ITSELF TO THE ENVIRONMENTAL CONDITIONS.
CONTINGENCY THEORY IN A NUTSHELL
Organizations are open systems that need careful management to satisfy and balance internal needs and to adapt to environmental circumstances There is no one best way of organizing. The appropriate form depends on the kind of task or environment one is dealing with. Management must be concerned, above all else, with achieving alignments and good fits Different types or species of organizations are needed in different types of environments
Fred Fiedler's Contingency Model
1. The leader-member relationship, which is the most important variable in determining the situation's favorableness 2. The degree of task structure, which is the second most important input into the favorableness of the situation 3. The leader's position power obtained through formal authority, which is the third most important dimension of the situation ORGANIZATIONAL STRUCTURE
An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.
ORGANIZATIONAL STRUCTURE TYPES
Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is most common in smaller organizations and is best used to solve simple tasks. Bureaucratic structures
. They are better suited for more complex or larger scale organizations,...