Emanoil Topalov
Anna Marie Hubulova
Henshaw Osong
Contingency Approach
• contingent - “Subject to chance” (Oxford Dictionary)
• contingency - “A future event or circumstance which is possible but cannot be predicted with certainty” (Oxford Dictionary)
• part of organizational theory
• definition: theories explaining the effectiveness of organizations based on external / situational aspects
The Contingency ApproachWhat is the contingency approach?
• Why contingency approach? Choose an organizational form
• Organic or mechanistic organizational structure
The Contingency ApproachAim of the Contingency Approach?
The Contingency ApproachMechanistic vs. Organic
Source: Management / Stephen P. Robbins, Mary Coulter. — 11th ed.
The Contingency ApproachMechanistic vs. Organic
Source: Management / Stephen P. Robbins
• contingency theories have existed since 1960s
• contingencies that have been developed by different researchers
• Environment
• Size
• Strategy
• Technology
• lead to a better performance of the company
• intertwined with structure
The Contingency ApproachContingency Variables
The interaction with the company‘s organisational objectives with internal and external environment of the organisation influences the overall stratergic design
Contigency Factors That Influence Organisation Stuctural Design
The Overall strategic framework of the Organisation
Innovation - Requires Organic structuresCost minimisation - Requires Mechanistic Structures
Source: Robins & Coulter (2013) Management (11th edition)
Immitation - Requires both Mechanistic and Organic features in the organisational structures
Source: Deepak Agrawal, Organizational structures 2009
Size and Structure
As an organization increase in size a switch from organic to mechanistic structure is madatory with increasing rules and regulations
Found wide differences in organizational structures:
• Management structures, levels of hierarchy and spans of control
• Workload allocation• Definitions of responsibilities• Levels of accountability• Skill levels of the workers
Joan Woodward (1916-1971)
Source: http://www.institut-numerique.org/Joan-Woodward
Technology and Structure
• Routine technology - mechanistic organizational structures
Characterised by higly centralized authority, rules and regulations, special functions
• Non-routine technology - organic organizational structures
Characterised by decentralization, low specialization, flatness
• Organisations adapt their structures to the technology they use
Technology and Structure
Source: (Management by Robins & Coulter)Exhibit 10-9 Woodward on Technology and Structure
Environmental Uncertainty and Structure
UncertaintyLow High
Mechanistic Organic
Structure
Simple Complex
DifferentiationLow High
Decision MakingCentralized Decentralized
Level of Standardization
Standardized Mutual Adjustment
Environment Uncertainty and StructureUncertainty
Low High
Mechanistic Organic
Structure
Simple Complex
DifferentiationLow High
Decision MakingCentralized Decentralized
Level of Standardization
Standardized Mutual Adjustment
https://en.oxforddictionaries.com/definition/contingency
Donaldson, Lex (2001) The Contingency Theory of Organizations
McKenna, Eugene and Beech, Nic (2002) Human Resource Management
Fiedler, Fred Edward (1967) A Theory of Leadership Effectiveness
Robins & Coulter (2013) Management (11th edition)
Sources
www.htw-berlin.de