Contingency theory contends managers should contingent upon various situational factors to adjust the management method promptly because the internal and external environments of organization are complex and change constantly. There is no the best method to leading and operating an organization (Donaldson, 2001,). Contingency theory represents a major shift in leadership research from focusing only on the leader to considering the situational context. It is lesson has been to emphasize the importance of matching a leader’s style with the demands of a situation and wider context (Northouse, 2010).
Here is a perfect example to illustrate how the contingency theory works in a certain case. In the 1980s, the Chrysler Company faces some very serious problems which are, the total car supply exceeds the total car demand which means all car makers will endeavor to maintain their market shares, and many foreign car makers, especially from Japan, come into America and want to share the same market. The urgent thing for this company is to solve these problems in order to avoiding losing market shares. The Chrysler Company applied the contingency theory to help them get through those problems. The company needs to continue changing policies in order to adapt to different environment. According to the current situation of Chrysler Company, firstly, the company dealt with the inventory which is essential to get the money back. Then, it improved the quality and style to meet the demand in order to get a higher rate of return. Finally, it focused on development of the relationship between managers and workers and enhanced their work efficiency. Although Chrysler Company is different industry with Longchamp, but the way to using theory to resolve the organization problem is the same.
1.1 Problem identification
There were few key issue relate to change for Longchamp. The problems associated with change from our research findings can be...