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