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All the organizations operate in varied environments and it is essential to assess the ways in which this impacts their structures. In the contemporary world, which is characterized by changes taking place rapidly, the importance of efficient as well as effective organizing has increased. In such a scenario an organizational or leadership style which might prove to be effective in certain situations might not prove to be successful in other situations. Thus, we cannot say that “there is only one best way to manage” but the best way in which a company can be managed is contingent on the company’s internal as well as external situation. Effective leaders are aware of the fact that there is no one best way of managing people and hence they adopt their style as per the level of development of the people being managed by them (Fineman et al., 2005) (Witt, 2009).
The above mentioned aspect has been emphasized by the contingency approaches as per which for the organizations to be successful, they need to adopt such a structure that suits the environment in which the organization is operating. The contingency theories have several forms. In general, contingency theories belong to that class of behavioural theory according to which for organizing a corporation and the company’s organization structure, there is no best way. Organizations are impacted by the external environment in numerous ways. The significant external factors consist of the organization’s size, cost and availability of capital, labour markets, competitors, policies and laws of the Government, managerial assumptions in relation to the technologies used, strategies and employees (Smith, 1984).
A number of contingency approaches developed during the later part of the 1960s. These theories emerged as a consequence of the criticism that was received by the classical theories like “Weber’s Bureaucracy” and the scientific management of Taylor. These theories were not successful as they did not take into consideration that the organizational structure and the management style were impacted by a number of environmental factors – the contingency factors. The origin point for the contingency approach was Joan Woodward’s work in 1958 who said that organizations that were successful in different industries having technologies which were different were the ones that were characterized by organizational structures that were different (Thompson, 2003).
Most of the strategic managers who are followers of the dominant metaphor of classical culture tend to become inflexible. The qualities which are required for managing change are generally lacking in these managers. Conversely, certain managers are equipped to handle the organisational changes in a way that is rational as well as methodical. This is the most significant positive consequence of making use of approach of contingency thinking. Most of the organisations that have achieved success do not have organisational structures and hierarchies which are similar as was advocated by the theorists of classical management. Since there is no “one best way”, there are variations in good structures from one situation to another.
The main ideas of the various contingencies theories are that organizations are basically “open systems” in which careful management is required for satisfying and balancing the internal needs and also for making adaptations to the circumstances that exist in the environment. For the purpose of organizing there is “no one best way”. The form that is appropriate is dependent on the type of environment or task with which one has to deal, above everything else, the management needs to be concerned about achievements of good fits and alignments and in different kinds of environments organizations of different species or types are required (Morgan, 2007).
The basic kinds of contingency include the production technology of the organization, the task environment that exists in it and the size of the organization. The perspective of these approaches of contingency thinking is entirely different from that of the theorists of old management. The old school theorist assumed that they had discovered what they considered as the “one best way” but all the experienced leaders are well aware of the fact that there is “no one best way”. This can be put in other words that not all the conditions, circumstances, situations and employees should be given identical treatment. Hence, it has been suggested by the contingency thinking that several ways that the managers can adopt is dependent on the situations faced by them (Burnes, 1996).
The ideas related to uncertainty that exists in the environment and the external factors which have an impact on the work with features of decision making and leadership that are context specific are combined by contingency thinking. The theory of contingency thinking indicates that managerial practices, functions and techniques will vary in accordance with the situation. Hence, it assists in finding appropriate ways of managing organizations. For instance, certain organizations might hire management consultants so that the effective ways can be identified for dealing with the circumstances existing currently, new competitors, new markets, political issues and new policies as well as laws.
The organisational activities have been impacted in numerous ways by managerial activities. They consist of providing motivation to subordinates, budgeting of the resources that are scarce and being a communication source. As per the contingency theories, the style of leadership is contingent on the situational and organisational context and a single style of leadership does not prove to be effective in every situation (Jordhiem, 2013).
The influential contingency theories according to which there is “no one best way to manage” are described below -
The findings of Burns and Stalker, showed that organisations that operate in environments that are stable are highly different from the ones that operate in environments that are dynamic and changing. According to them, the variations in the manner innovation and change was approached by the firms is related to their mission and values (Burns & Stalker, 1994).
The contingency theory was refined by Lawrence and Lorsch by showing that different technological environments and markets need different types of organisations and that functional departments in an organisation may be managed in ways that are different as a result of variations in their sub-environments. Thus, organisations adopting to the environment in the best possible way will survive (Lawrence & Lorsch, 1967).
In terms of the leader-member relations, it is maintained by Fiedler that the influence exerted by the leaders will be more in case good relationships are maintained by them with the members of the group who like trust and respect them. Task structure was considered second in significance for determination of structural favourableness. According to Fiedler, tasks which are highly structured and that specify in detail the way of doing the jobs provide more influence to the leader over a group in comparison to tasks that are unstructured. As regards position power the leaders having the power of hiring and firing, disciplining and rewarding possess higher power than the ones who do not.
The model of Fred Fiedler is the earliest and has been researched the most. It is also called the “contingency model of leadership effectiveness”. The ideas of Fiedler began from the models of behaviour and trait as he stated that group performance depends on the psychological orientation of a leader and also on three kinds of contextual variables which are the power position of the leader, task structure and atmosphere of the group. The significance of the personality of the leader and the situation in which he operates is underlined by the contingency model (Fiedler, 1964).
The findings of Fiedler lead to many implications such as leaders might perform better in certain situations but not in every situation, anyone can become a leader by careful selection of the situations that are a match for his style of leadership and the leader’s effectiveness by designing jobs in manner that fits with the manager. Thus, by making changes in the power position of the leader and task structures and impacting relations between leader-members, the situation can be altered by the organisation for fitting the leadership style in a better way (Lorsch, 2010).
In summary, it can be said that the contingency theory’s essence is that the best practices are dependent on the situation. The typical response that a contingency theorist provides whenever he is asked for a response is “that it all depends”. This is the reason why the contingency theory is also known as the “it all depends theory”. Even though this appears to be simple, assessment of the contingencies on which the decisions are dependent may be a extremely complex. The conditions under which things are likely to take place are identified as well as measured mostly by the contingency theorists. Taking into consideration the fact that organisations need to attain an internal as well as an external fit for the achievement of performance of a superior quality and also considering that the strategy formulation and strategy implementation processes cannot be separated, an integrative approach needs to be adopted which will be able to incorporate the two schools of thought. The appropriate organisational structure and management style are dependent on the concerned organisation’s environmental context. The ability of managing change is currently being recognised as a “core organisational competence”.
Burnes, B., 1996. No such thing as … a “one best way” to manage organizational change. Management decision, 34(10), pp.10-18.
Burns, T. & Stalker, M., 1994. The Management of Innovation. 3rd ed. Oxford University Press.
Fiedler, F.E., 1964. A Contingency Model of Leadership Effectiveness. Advances in Experimental Social Psychology , 1, pp.149-90.
Fineman, S., Sims, D. & Gabriel, Y., 2005. Organizing and organizations. London: Sage.
Jordhiem, T., 2013. There Is No Good Way to Manage People (But We Have To Try Anyway). [Online] Available at: https://www.govexec.com/excellence/promising-practices/2013/11/there-no-good-way-manage-people-we-have-try-anyway/73466/ [Accessed 24 September 2016].
Lawrence, P.R. & Lorsch, J.W., 1967. Organization and Environment. Cambridge, MA: Harvard University Press.
Lorsch, J.W., 2010. Press Chapters. Harvard Business Review, 26 January.
Morgan, G., 2007. Images of Organisation. Thousand Oaks: SAGE.
Smith, M.J., 1984. Contingency rules theory, context, and compliance behaviors. Human Communication Research, 10, pp.489-512.
Thompson, J.D., 2003. Organizations in Action: Social Science Bases of Administrative Theory.
Witt, D., 2009. No One “Best” Leadership Style. [Online] Available at: https://leaderchat.org/2009/12/08/no-one-best-leadership-style/ [Accessed 24 September 2016].
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