Contingency Theory and Organizational Design: Implications for Managers

Assignment Details

Organisation design is not (and cannot be) based on simplistic principles that can be applied in all situations. Differences and changes in the organisation’s operating environment require different approaches to organisation design. For example, division of labour is valuable and widely used, but jobs can become too specialised. Centralised decision-making may work well in some situations, but in other circumstances other structural designs are more effective. This is the premise of contingency theory (sometimes called situational theory), which explains how planned dimensions (or designed aspects) of an organisation interact with contingency factors (also called contextual dimensions) in today’s complex and turbulent environments.

The purpose of this assignment task is for you to demonstrate your understanding of some key aspects of organisational design and how organisations can adjust those in response to shifting stakeholder agendas.

Using the framework of Dimensions of organisation design  (Daft, Murphy & Willmott 2017, pp. 24–26), discuss the following question: (see below for screenshots of pages 24-26 of textbook)

What does contingency mean? And what are the implications of contingency theories for managers?

In your analysis, focus on two structural dimensions and two contextual dimensions and discuss how changes on those affect relevant stakeholders within and outside of an organisation. Remember to consider ethical choices and implications.

Tips for analysis

In addressing this assignment task, you may wish to consider the following points:

• What are the distinctive features of an organisation?
• What are the distinctive features of contemporary organisational environments?
• How much control can organised activity exercise over its environment(s)?
• Who are the stakeholders of an organisation?
• How are stakeholders impacted by managerial decision-making?
• How can stakeholders influence organisational outcomes and decisions?