Essay, 2005, 13 Pages
University of Otago
Department of Management
MANT 410: Business Policy
by: Christian Bacher
Table of Contents
1 Definition and Development 1
2 Strengths 5
3 Weaknesses 6
List of References 11
This work answers the question What are the strengths and weaknesses of the systems approach as used by contingency writers in analysing organisations? To provide a sound insight into the strengths and weaknesses, the notion of contingency theory needs to be defined and its development understood. So, the first chapter displays the most significant ideas and characteristics of contingency theory and briefly follows the developmental steps of how contingency theory found its way into management on the basis of some of its most influential writings. The second and the third chapter take the contrary positions for strengths or for weaknesses of the contingency approach.
Nevertheless, this paper does not provide a complete or conclusive view of contingency theory, the selection of the writings and the deliberate focus on uncertainty and environment as contingency factors with just a short reference to other factors like strategy, technology and size is intended. The interpretation of strengths and weaknesses can, if not derived from the literature, be considered as biased by my personal subjective view and is, therefore, a limitation of this work. The essay, finally, concludes with a brief appreciation and evaluation of contingency theory.
1 Definition and Development
"What kind of organization does it take to deal with various economic and market conditions?" (1986, p. 1) is the ‘fundamental question’ that Lawrence and Lorsch raised in their book Organization and Environment, first published in 1967. In doing so they acknowledged that different industrial environments require different organizational structures, which is why they are credited "with having invented the term of contingency theory" (Donaldson, 1995, p. xii). Burrell and Morgan describe the basic assumption of the contigency theory that the effective operation of an enterprise is dependent upon there being an appropriate match between its internal organisation and the nature of the demands placed upon it by its tasks, its environment and the needs of its members (2001, p. 164). This reflects the theory-building findings of Lawrence and Lorsch (1967; 1986) and others (i.e. Burns & Stalker, 1968; Woodward, 1958), who through the adoption of quantitative comparative research discovered that, in fact, organisations with differing formal structures and characteristics exist. Contingency research is based on an open systems framework and takes, therefore, a contradicting position towards the precedent predominant classical management thought.
The classical management school held "that there was a single organizational structure that was highly effective in organizations of all kinds" (Donaldson, 1996, p. 58), a closed system concept which is "focused on the one best way to organize in all situations" (Lawrence & Lorsch, 1986, p. 3). This view of the organisation is furthermore described as bureaucratic system with a high degree of decision making and emphasises on the hierarchy as well as exact job definitions.
From the 1930s onwards another management approach developed, the human relations school, characterized by the focus on the individual employee and his psychological and social needs. The notion of motivation and participative decision-making are connected to this management thought. Contingency theory, however, provides the foundation to combine both the idea of human resource and the classical thought, it considers management decision contingent on the demands of the employees and adapts classical management to a more flexible and uncertain environment (Donaldson, 1996). The main contingency concepts are task uncertainty, which is regarded as “the core contingency concept”, innovation and size (Donaldson, 1996, p. 58). The effect of task uncertainty is that the higher the extent of uncertainty the less formal, centralized and specialised the structure of an organisation can be.
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