Critically evaluate the relevance of the contingency approach to managing on the managerial work of the manager you interviewed.
Jane Smith is the Director of Human Resources and Operations of a mid-sized (approx. 700 staff), ASX listed, insurance and wealth management firm – XYZ Wealth (pseudonyms have been used to respect the privacy of both the HRD and the firm involved). XYZ Wealth operates across Australia, with the management team based in Melbourne. Jane directly leads a team of seven HR and communication employees and five operations staff, and has a strong influence across the organisation. Reporting to the CEO, with both board and ASX reporting responsibilities, Jane’s role and authority at XYZ Wealth is prominent. As the HR Director, Jane is involved in structure, employment issues, human resource allocation, recruitment and retention decisions and sets the people strategy for the organisation (J. Smith, pers.comm, 2011). As she faces many different situations everyday in her work, she heavily relies on the contingency approach to management.
The contingency approach states that “organisations are different, face different situations (contingencies) and require different ways of managing” (Robbins, Bergman, Stagg & Coulter, 2009 p. 53). The classical, behavioural and systems approach to management theory assumed a universal or ‘one-best-way’ of management that applied the same techniques to all companies. However, experienced managers know that not all people and situations can be managed exactly the same. Thus the contingency approach to management suggests that what managers do in practice depends on the situation. However, the contingency approach is not without its critics. A major problem is that it often is used as an excuse for not acquiring formal knowledge about management, but just lets managers make adhoc decisions. There are four popular contingency variables: organizational size, routineness of task technology, environmental uncertainty and individual differences (Robbins et al, 2009). In this essay, we will discuss how Jane at XYZ Wealth manages each of these variables.
The first variable in contingency management theory is organisational size. The way Jane manages her direct team of seven, is very different to how she is seen as a manager across the 700 staff at XYZ Wealth. For example, Jane holds weekly meetings with her team to advise of company-wide news and information from her meetings at CEO and Board level. In relation to Katz’s “human skill” (Katz, 1974) she is an effective communicator in this arena. However, one of the roles of her team is to then disseminate this information through their business groups and across the organisation, so that all employees are aware of various company-edicts and general ‘goings on’ . They did this through posting memos in breakout rooms, which were rarely noticed. Thus Jane (and in turn, her team) was perceived as having poor ‘human skills’ as the information coming from the HR team was communicated across the larger organisation ineffectively. Jane had to change her management style in relation to these larger communications and a company wide intranet was developed as a result. On it, important employee notices were communicated as well as information about the company and it’s various activities. (J. Smith, pers.comm). Employees were then able to access the information as it suited them, and remained just as informed as those in her direct team after their weekly meetings.
Another variable in contingency management theory is the ‘routineness of task technology’. Routine Technologies are those that have little variety and use objective, standarised procedures. They are mostly associated with a mechanistic structure and processes, with formal rules and rigid management processes (Daft, Murphy & Willmott 2010). An example of this at XYZ Wealth is in the Operations Department. Their role is to scan all incoming mail, forward it to the...
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