- Strategic Contingency Theory
- 2. History
- 3. Assumptions
- 4. Broader perspective of the theory
- 5. Strategic Contingency Model
- 6. Practical implications of the theory with the example
- 7. Criticism
- 8. Significance
- 9. Limitations or Disadvantages
- 10. Conclusion
- Contingency Theory (Теория обстоятельств)
- Факторы Contingency Theory (Теория обстоятельств)
- 1. Теория обстоятельств для организации
- 2. Теория обстоятельств для лидерства
- 3. Теория обстоятельств для процесса принятия решений
- Contingency Theory (Теория обстоятельств) и Situational theory (Теория ситуаций)
- A Guide to Contingency Approach in Management
- What is the meaning of contingency theory?
- What is a contingency approach to management?
- Who propounded the contingency theory of management?
- Features or Characteristics of Contingency Approach
- How does Contingency theory work?
- Path-Goal Theory
- Situational Leadership Theory (Hersey-Blanchard Situational Leadership Theory)
- Decision-Making Theory (Vroom-Yetton-Jago Decision-Making Model of Leadership)
- What is an example of contingency theory?
- Contingency Approach to Management Advantages
- Contingency Approach to Management Disadvantages
- The Importance of Contingency Theory
- GoAssignmentHelp’s Management Assignment Help Options For Students
- Need Help with a contingency approach in management?
Strategic Contingency Theory
The theory is two concepts i.e. ‘Contingency’ and ‘Strategic’ aspect of contingency.
A Contingency is a need for different tasks of a subunit in an organization on which tasks of other subunits create an effect. This contingency becomes strategic once other subunit starts controlling more contingencies and becomes powerful in an organization.
As per the Strategic contingency theory, a leader becomes a central part of an organization due to his/her unique skills to solve issues or problems which others are unable to solve. Too much dependency lies on a leader so he/she is not easily replaceable.
Hickson who is the founder of this theory wrote:
“Organizations can be described as a collection of departments or functions that align together to cope with uncertainty.”
Factors politics and power play an important role in the management of strategic contingencies. Hickson also stated a practical example in support of his strategic contingency theory concept.
According to him, an engineering subunit of an organization is powerful due to its functional skills i.e. it removes uncertainty by its quality of fixing breakdown quickly which affects workflows in the organization at different output levels.
In the Strategic Contingency model, Hickson discussed the effect of some outside variables on the power of organizations.
He concluded that both relationships factor of departments and differences of individuals affect organizational power.
Power decisions can be influenced by departmental relationships and also individual differences play a vital role too as individuals are different in their skills, capabilities, etc.
Hickson also refuses the concept of earlier leadership theory i.e. Great Man theory which stated that a person having the charisma or leadership trait by birth can only be an effective leader. According to him, a person without Charisma but has the problem-solving ability can be an effective leader.
The author of the Strategic contingency theory is D.J. Hickson and he wrote the theory in 1971. Hickson’s concept is the political view of strategic contingencies i.e.
bargaining and negotiation features of a leader or subunit that demonstrates great power or dependability of another subunit in an organization.
Hickson defined power as the dependent variable in an organization by distributing it through all subunits and departments.
Strategic contingency theory is the below assumptions:
- The power of a subunit or individual depends on a few contingencies.
- A leader’s problem-solving skills or capabilities are a source of power as except him/ her no one can resolve issues in an organization. It gives him/ her bargaining power.
- Above results in fixing up a leader’s position and are not easily replaceable.
- It is uncertainty i.e. less information on future predictions and due to this different solution and their results cannot be predicted. This uncertainty is the main issue that the organization faces.
4. Broader perspective of the theory
The author of the Strategic contingency theory is D.J. Hickson, and he wrote the theory in 1971. Hickson defined organizations having multiple departments and their alignment at the time of uncertainty. The term contingency is defined as a group of tasks required by a subunit which is affected by tasks of another subunit.
When a subunit has control over more activities or contingencies than its power increases in the organization and considered as a strategic contingency. This theory connects a subunit’s power to its managing capability with different factors centrality, uncertainty, and substitutability by controlling the strategic contingencies of other subunit’s dependent activities.
This control comes from combining the above factors.
The theory is aimed at defining the dependency of subunits by the control of contingencies. Contingency changed to Strategic when backed up with more subunit power i.e. dependency of other subunits makes a subunit more powerful.
Uncertainty is a crucial factor of theory as organizations run in an uncertain environment and all uncertainties are not required to be equally important. , regulatory changes can be one uncertainty for both the organization and its competitor which reduces the effect of uncertainty.
There are crucial uncertainties where organizations can develop competitive advantage and subunits that can face and provide solutions to these uncertainties to become powerful in the organization. The power of a subunit also depends upon the solutions provided by other subunits on the same uncertainty.
The power effect will be less if more alternatives are available by other subunits. So power source must be non-substitutable.
Further Centrality is also a source of power and can be categorized as pervasiveness and immediacy. Pervasiveness defines the position of the subunit in an organization.
It focuses upon the interdependencies of activities between subunits i.e. the degree up-to which a subunit depends upon another subunit for its work.
Wherein, immediacy is related to the power of a subunit in overall performance and results in an organization.
5. Strategic Contingency Model
In an organization, subunit power has 3 elements i.e. domain, weight, and scope. The domain includes the number of affected other subunits by issues, Scope is the decision range that is affected by issues and weight is the degree of effect of subunit on issues.
Uncertainty and managing or coping uncertainty:
Uncertainty is related to insufficient information on future events and due to this, different alternatives and their possible results cannot be predicted in advance. The different environment- driven uncertainties affect inputs, processes, and output in an organization.
To effective results of activities, organizations require means to manage uncertainties which are known as coping. So the power of a subunit is connected to uncertainty which affects an organization a lot. Subunit having the ability to deal with uncertainty retains power.
The level of uncertainty becomes low from such ability and other subunits and people become dependent on that subunit having the ability. The ability also includes the problem-solving capability.
For example, a subunit can predict an accurate future or can use preventive steps product development to prevent declining market share.
In an organization system, there are different roles, departments or subunits, and tasks. The centrality of a subunit is up-to what extent its tasks are interlinked into the organization system or with other subunits.
It is stated that a subunit becomes central in the system if its activities are connected with different other activities and also termed as workflow pervasiveness. Any subunit that is central to an organization’s workflow plays an important role.
Being central to the system, it has lots of responsibilities and if it fails to produce desirable results then it affects the whole organization.
For example, a production subunit in an organization plays a central role as it is responsible for manufacturing operation that includes unique and complex activities. In an emergency in manufacturing breakdown, the production manager can manage things well and deal with unions effectively.
Power also comes if there is no substitute available. a subunit having required skills, expertise and only talents to complete work then it is difficult to replace and is more powerful.
Substitutability is considered as different available alternatives. High power is considered when a subunit has control over a resource or activity that has no replacement. For example, a person having only expertise on a certain issue will have more power as compared to lots of people having the same expertise.
For example, the Production subunit has technical expertise that is non-substitutable by other subunits.
6. Practical implications of the theory with the example
From an organizational point of view, Strategic contingency theory has relevancy that can be viewed in the below example of power contingencies of IT (Information Technology) Department or subunit of an organization.
IT DEPARTMENT POWER CONTINGENCIES
In the above diagram, the IT department or subunit of an organization is a power subunit which describes sources of its power.
- Coping with Uncertainty: The IT department minimizes the uncertainty of critical business issues by providing relevant and quick information on raw data to different subunits or departments of an organization across regions. Different IT-related information systems and software are available that extract useful information from available data. These are very useful in strategic decision making, identifying business opportunities and threats and which is not possible manually. Due to this IT subunit can control, manipulate and process information of high quality and thus helps to reduce the uncertainty of activities of other subunits. This way the power of IT subunit increases.
- Non-Substitutability: Complex and more advanced IT solutions require a high level of expertise to manage and implement these. The power of the IT department increases as other subunits are not able to substitute the required expertise with available resources. Advance IT skills are required to handle more unique and sophisticated IT systems and these skills are hard to gain. So an increase in the complexity of IT in an organization demands more reliability on the IT subunit.
- Workflow Centrality: Organizations dependability has been increased on the IT subunit to manage their workflow and effective communication among them. Different IT systems ERP Systems can manage information of other subunits centrally HR, Marketing, Sales, Purchase, production, Customer relationship management, etc. Similarly, it is easy to communicate and to manage workflow which is disbursed in different areas through email systems.
There are different points on which Strategic contingency theory of leadership can be criticized :
- Up-to what extent subunits are independent and powerful.
- What are the problem-solving skills of a leader states as different types of problems exist?
- No testing methodology was defined to assess the authenticity of the theory. Different other theories Cognitive Resource theory challenges the Strategic contingencies theory and states that stress and different situations affect the problem-solving capability of a leader.
- It creates uncertainty as more dependency rather than problem-solving ability.
Due to the above points, Strategic Contingency theory was failed in aspects of rationality and efficiency.
Following advantages are there of Strategic contingencies theory of leadership:
- This theory is a task-oriented and problem-solving approach which states that solving problems should be the main focus of different tasks of a leader. To be an effective leader, a person is not required to have leadership qualities by birth and anyone having the appropriate problem-solving ability can be a leader.
- Moreover, there is no detail concept is required as the theory considers the problem-solving element as central to a leader’s role.
- This theory is much leadership techniques rather than depending upon the personality of a leader.
- This theory is easy to understand and implement as it is different contingencies or variables that affect the power of a subunit in an organization.
9. Limitations or Disadvantages
Limitations of Strategic contingencies theory are:
- In the theory power definition is not clear i.e. concerning psychological, physical, etc.
- There is no testing method to validate the authenticity of the strategic contingencies model.
- The effect of the stress factor is not considered in a leader’s problem-solving skills.
To conclude, the main power source is to cope up with uncertainty and in absence of this; a subunit cannot be most powerful in an organization and other subunits. Apart from uncertainty, other equally important factors of power are immediacy, pervasiveness, and non-substitutability.
A leader carrying exceptional skills to resolve issues is in high demand in organizations and will get the advantage to negotiate. If a leader’s work is centralized then tasks he/she initiates are of high importance and if he/she fails then other parts of the organization will be affected.
Contingency Theory (Теория обстоятельств)
Contingency Theory (Теория обстоятельств) – разновидность теории поведения, которая утверждает,что нет наилучшего способа организации корпорации, руководства компанией или процесса принятия решений.
Стиль организаций/лидерства/процесса принятия решений, эффективный в некоторых ситуациях, может быть не таким успешным в других ситуациях.
Иначе говоря: Оптимальный стиль организаций/лидерства/процесса принятия решений зависит от различных внутренних и внешних ограничений (сдерживающих факторов).
Факторы Contingency Theory (Теория обстоятельств)
Некоторые примеры таких ограничений:
- Размер организации.
- То, как фирма приспосабливается к своей среде.
- Различия в ресурсах и экономической деятельности.
- Предположения менеджеров относительно сотрудников.
- Используемые технологии.
- и т.д.
1. Теория обстоятельств для организации
- Нет универсального способа или лучшего способа управления организацией.
- Дизайн организации и ее подсистем должен «сочетаться» с средой.
- Эффективные организации не только имеют «правильное сочетание» с средой, но также между своими подсистемами.
- Потребности организации удовлетворяемы наилучшим образом, когда она соответствующим образом построена и стиль менеджмента соответствует как задачам, так и сущности рабочей группы.
2. Теория обстоятельств для лидерства
В Теории обстоятельств для лидерства, успех лидера зависит от различных факторов таких, как: подчиненные, задачи и/или группы.
Эффективность определенной закономерности поведения лидера зависит от требований ситуации.
Эти теории подчеркивают использование различных стилей руководства, соответствущих потребностям, созданным различными организационными ситуациями. Некоторые из этих теорий:
- Contingency Theory (Теория обстоятельств) (Fiedler): Теория Fiedler является самой ранней и самой широко исследованной. Подход Fiedler отходит от моделей свойств и поведения (trait and behavioral models), утверждая, что эффективность группы зависит от психологической ориентации лидера и от 3 контекстуальных переменных: групповой атмосферы, структуры задач и объема полномочий лидера. Эта теория утверждает, что эффективность группы является результатом взаимодействия 2 факторов. Эти факторы известны как стиль лидерства (leadership style) и ситуативная благоприятность (situational favorableness). В модели Fiedler, эффективность руководства является результатом взаимодействия между стилем лидера и параметрами среды, в которой лидер работает.
- Situational theory (Теория ситуаций) (Hersey & Blanchard). Данная теория – продолжение модели Managerial Grid (Таблица для определения типов руководства) Blake и Mouton, и теории стиля менеджмента Reddin's 3-D . Эта модель расширила понятие параметров отношения и задач лидерства, а также был добавлен параметр готовности .
- Leadership Pipeline (Канал лидерства) (Drotter)
3. Теория обстоятельств для процесса принятия решений
Теория обстоятельств в процессе принятия решений (Decision Participation Contingency Theory) Vroom и Yetton или Нормативная теория принятия решений (Normative Decision Theory): Согласно этой модели, эффективность процедуры принятия решений зависит от нескольких аспектов ситуации:
- Важность качества решения и принятия.
- Количество релевантной информации у лидера и подчиненных.
- Вероятность того, что подчиненные будут признавать авторитарные решения, или вероятность того, что подчиненные будут кооперироваться для принятия качественного решения.
- Количество разногласий среди подчиненных по отношению к алтернативам.
Contingency Theory (Теория обстоятельств) и Situational theory (Теория ситуаций)
Теория обстоятельств сходна с теорией ситуаций в наличии предположения о том, что не существует простого способа, который бы всегда подходил.
Основная разница в том, что теория ситуаций больше ориентируется на поведение, которое лидер должен демонстрировать. При наличии ситуативных факторов (часто касающихся поведения последователей).
Тогда как Теория обстоятельств подразумевает более широкий охват, который включает условные факторы о возможностях лидера, а также другие ситуативные переменные.
Сравните с Contingency Theory (Теория обстоятельств): Situational Leadership (Ситуативное лидерство) | Leadership Styles (Стили лидерства) | Leadership Pipeline (Канал лидерства) | Ten Schools of Thought (10 школ мысли) | Механические и органические системы (Mechanistic and Organic Systems) | Six Change Approaches (6 подходов к изменениям) | Core Group Theory (Теория центральной группы) | Groupthink (Групповое мышление) | Levels of Culture (Уровни культуры) | Culture Types (Культурные типы) | Changing Organization Cultures (Изменение организационных культур) | Leadership Continuum (Континуум лидерства) | Cultural Intelligence (Культурный интеллект) | Scenario Planning (Планирование сценариев) | Results-Based Leadership (Лидерство, основанное на результатах) | Moral Purpose (Нравственная цель) | EPIC ADVISERS (ЭПИЧЕСКИЕ СОВЕТНИКИ)
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A Guide to Contingency Approach in Management
The contingency theory of management is one of the most important topics that you will study in your management degree.
Many times students are given assignments, research papers, and projects related to the contingency approach to management.
This article will explain to you the whole concept briefly and will answer some common questions related to the contingency theory.
What is the meaning of contingency theory?
The word contingency means any event or circumstance that is ly to occur in the future but the occurrence of that event is not certain. With this, we can guess that the contingency theory is all about uncertainty.
The contingency theory is a class of behavioural theories that help to predict organizational behaviour. The contingency management theory explains the uncertainties involved in leadership, management and decision making.
With contingency thinking, one can gain useful insights into leadership practices.
What is a contingency approach to management?
The contingency approach to management suggests that there is no particular best way to manage. The management activities such as planning, controlling, leadership, or organization are completely dependent on the circumstances and the environment. If you need insights into these management activities, our MBA assignment help services can provide you with adequate explanations.
According to the contingency approach, the managers generally pay attention to the current situations and then make strategies their knowledge and experience.
This approach is quite advantageous for the organizations as it allows them to learn from specific circumstances and change their policies accordingly in the future if the same situation arises.
The contingency approach to leadership means that the leaders themselves have to adjust their working styles and management strategies the needs of their co-workers and the organization.
Who propounded the contingency theory of management?
The contingency theory of management was proposed by an Austrian psychologist, Fred Edward Fiedler. In 1964, he published an article called â€œA Contingency Model of Leadership Effectivenessâ€.
Features or Characteristics of Contingency Approach
- The contingency approach focuses on the variable nature of businesses and organizations. The managers choose a Framework for finding solutions to a problem rather than sticking to a particular strategy for solving the problems. This allows an organization to work under differentiable environmental conditions and circumstances.
- The contingency approach to management generally depends upon the complexity of a problem. It depicts that management is circumstantial. There are no Universal principles of management and there is no one best way to manage. Different situations can have different solutions. No one can pre-declare how things will fall into place.
- It is also called the if-then approach to management. If this happens then we would take this action. The if section represents an independent variable or a particular problem or a situation. The then part represents the action to be taken accordingly or the dependent variable of the problem.
- The contingency theory definition depends upon both the internal as well as external factors of an organization.
For example, the size of the organization, the leadership approaches of different managers of an organization, the number of employees versus the number of managers in the organization, the customers perspective and the competition in the market.
How does Contingency theory work?
First, Fred Edward defines two kinds of leadership – Task Motivated leadership and Relationship Motivated leadership. Task motivated leaders are effective in situations that are most favourable or most unfavourable. The relationship motivated leaders are effective in situations that lie in-between these two extremes.
Then, Fred Edward has used the LPC Scale or the Least Preferred Co-Worker scale toÂ measure the leadership style that will be most suitable in a situation. The leaders who have low LCP are task motivated and those who have a higher LCP are relationship motivated leaders.
As the name suggests, this theory relates how leaders can help their subordinates to achieve their goals. This theory explains the kind of leadership in which the leaders clear out the obstacles being faced by the subordinates who are willing to achieve their goals.
Situational Leadership Theory (Hersey-Blanchard Situational Leadership Theory)
As per this theory, leaders have four behaviours – Delegating, Selling, Telling and Participating. Then, this theory also considers the maturity levels of subordinates – incompetence, competence, willingness and unwillingness. This theory suggests how leaders can fit-in their leadership behaviours the maturity levels of the subordinates.
Decision-Making Theory (Vroom-Yetton-Jago Decision-Making Model of Leadership)
The contingency thinking in this theory suggests that the right decision making is dependent upon how a leader emerges and progresses.
Three parameters shape a decision namely, the commitment of the group, quality and time restrictions.
This theory describes five kinds of leaderships situation namely, Autocratic (A1), Autocratic (A2), Consultative (C1), Consultative (C2) and Collaborative (G2).
What is an example of contingency theory?
To understand the contingency approach to leadership let us consider the scenario of a newly appointed Clothing Store Manager of a brand H&M which has a staff of around 50 people. What kind of leader should he be? Well, we must consider the following parameters for that:
- Low trust factor – Since the manager is appointed, the staff won’t show much trust in them. The manager might not be able to build strong relationships with the staff right now as they are large in number.
- High task structure – the operating process of the store is clear. The staff already knows how to welcome customers and organize or display clothes.
- High position power – the manager has the authority to hire more people or to fire someone if required.
So, as per the Fred Edward contingency theory, a relationship motivated leader will be effective in this case.
Contingency Approach to Management Advantages
Because of the profitable features that this theory proposes it has been of great use to the managers. You can find the complete list of advantages and examples of the contingency approach from our management experts. Just avail our online assignment help service and they will provide you with the easiest explanations of this essay topic. Let us look at a few of the advantages here:
- The approach is adaptive. This means that it allows organizations to stay flexible and transform their policies and strategies according to the changing environment.
- The managers can consider the entire factors, analyze situations thoroughly and then make the appropriate decision. This means that they can consider every factor variables and circumstances that may affect their solutions in the present and the future as well.
- Due to this approach the scope of leadership has widened. This approach gives importance to the managers understanding, knowledge, and leadership styles and lets them take different decisions depending upon the different situations.
- The contingency approach allows an organization to choose different leaders as per their leadership styles in various contexts. The theory does not expect that all the leaders are efficient in dealing with all types of situations in an organization.
Contingency Approach to Management Disadvantages
- Despite the lucrative features and advantages that the contingency management theory has to offer to the organizations it is not completely liberated from criticism. There is no single optimal solution to a problem which means that managers can iterate as much as they want in search of solutions.
This can sometimes lead to wastage of resources, time and money.
- The contingency approach definition is quite straightforward that not all management situations can be dealt with in a specific manner. But when we apply the same in real-life scenarios things do get a little complex.
It requires a thorough analysis and several factors need to be considered for every other problem that arises. Hence in case of stringent time limits managers may not be able to dig deeper into the situation and they might make superficial decisions.
- It is not always feasible for the managers to consider every factor and determine all the variables involved in their decision-making process.
There can be various constraints such as time, cost and resources due to which it can become difficult for the managers to gather all the information and analyze that information completely.
- The contingency approach might be complex to implement as it is not fixed. It is situational.
Hence, it all depended on how the leaders adjust themselves and their perspectives for the betterment of the company. The more time the leaders will spend with their subordinates and understand their issues and problems, the easier the decision-making process will be for them.
The Importance of Contingency Theory
The contingency theory definition offers a dynamic approach to leadership.
With the help of such a theory, the management can decide the best way to lead the organization and make the right decisions.
It considers the nature of the work of the organization and the approach of the workers. It gives no one path of management. Hence, highlighting the flexibility that is required in every leader.
Do you think that the Contingency Theory of Management must be adopted by every organization? Start the discussion with our Management experts right now.
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Need Help with a contingency approach in management?
The concept that management effectiveness is contingent on or relies upon the interplay between the framework and unique conditions of management actions is a contingency approach to management.
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