Contigency Theory

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During 1950 and 1960, some small group decision making developed the idea of contingency theory. At the end of 1950s, academic schools began to utilize the contingency idea into organization theory. The term “contingency theory was created, it challenged the traditional management notion: finding the one best way to organize. Together with special and united notion of subsystems, the contingency theory drew theorists’ attention and obtain acceptance. Then more and more researchers took part in studying this effective problem solving approach. Organic form and environment are imperative factors supporting the organization evolves. This is the root of contingency theory. Lots of problem emerged when scientist and researchers tried to design a universal form for managers to administrate the organization. Due to different internal condition and external environment, one approach is working upon one system does not mean it can have effect in another system. Hence, contingency theory appears with the core idea “there is no one best way ”. Each organization constitutes the organizational designs based on its own environment. Efficiency can be achieved when an organization adapt well to the subsystems and environment. That is the more organization constructs structure appropriately and meet throughout demands, the more organization’s members feel satisfied. To apply contingency theory aims at distinguishing as many relative internal and external variables as possible.

In 1967, Paul Lawrence and Jay Lorsch from Harvard University led a study and obtained two main perspectives: 1. Different sorts of organizations have to take order with diverse market condition and technological issue. 2. Precarious circumstance cause organizations carry on a higher extent of internal differentiation then those which are in the less complicate and more steady environment. The conclusion improved contingency approach that, organizational styles may alter among organizational subunits as a consequence of their subenvironment’s specific factors (Morgan 2006). Contingency theory focused on the nature of the mission, the structure of the system, the human factors and technology, it was argued that the structure of an organization would be swayed by certain variables (Linstead, Fulop & Lilley 2009). The factors that can lead organization achieve effective performance are called contingencies, contingencies conclude size, strategy, technology and environment, organizations are shape by these contingencies (Donaldson 2001). In this article we just analysis two of them. Strategy and technology. One share the history when contingency theory was determined, another become one of the imperative variable with the development of technology. Strategy

Strategy can be defined as the long term goods and missions of a company with a set of action applied to accomplish the goal and missions(Zwerman 1970). Strategy have two related levels: corporate level and business level. In corporate level, strategy try to arrange the roles for each part of business in organization. It expects to determine the nature of business for organizations. In business level, multi business organizations would run its own strategy, products or services for each business line. Strategy was thought to be the exclusive factor affects organizational structure 40 years ago. From then on, other factors’ effect in the organization were specified, but the substructural influences of strategy is still maintained. Since Afred Chandler, Raymond Miles and Charles Snow, Michael Portor and many other professors made a great contribution to strategy- structure relationship. Here we use Chandler, Miles and Snow’s research result to have a general concept about how strategy determine the organizational structure. The initial most influential research was pursued bu alfred Chandler. From 1900 to1950, Chandler selected 100 American mass manufacture companies to do large quantity of case studies. From...
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