What is Contingency Approach of Management?
Contingency approach/theory is also called situational approach or practical approach. This approach suggests that there is probably no best way to solving management problems in all organizations, problems vary as the situation changes thus the way of handling problems should change in accordance with situation changes.
Paul Lawrence, Jay Lorsch, Tom Burns, John Woodard, James Thompson, etc. are the major contributors to this theory. Today this approach is popular among most organizations as it gives freedom to make decisions to the managers.
According to the contingency approach, the best way to lead, plan, organize, and conduct managerial activities varies with the situation. A particular method suitable in one organization at a time may not the same method be suitable in another organization. So, there are no plans, organizational structures, leadership styles, and control techniques that will fit in all situations.
Every organization is unique and management decision and structures must be unique. The manager must understand the uniqueness and complexity of each situation. There should be a match between the situation and the manner of dealing.
There are four contingency variables that determine management practices;
Contingency Variables in Management
#1 Organization Size
The number of people in the organization is a major influence on what managers do. The lesser the people manager has may he handle them properly and the higher the number of people may the manager has to give more time and effort.
#2 Routineness of Task Technology
Organizations apply technology to transforms inputs into outputs. Routine technologies require organizational structures, leadership styles, and control systems that differ from those required by non-routine technologies.
#3 Environmental Uncerntainty
The degree of uncertainty caused by the external environment such as political, technological, socio-cultural, and economic changes influence the management process. The management style which is best in a stable environment may not fit in a rapidly changing and unpredictable environment.
#4 Individual Differences
Individuals differ in terms of their desire for growth, autonomy, and tolerance of ambiguity and expectation. Managers should concern these and other individual differences while implementing motivation techniques, leadership styles, and job design.
Hence, management can not have ready-made universally applicable and acceptable principles to be applied in all situations as everlasting truth. Management will have to recognize the nature of technology, variations of human participants, and the wide diversity in environmental relationships. All managerial actions will depend upon particular prevailing circumstances and situational factors.
This approach rejects the universalistic nature of management principles. It requires managers to have a thorough understanding of the situation and the way of tackling situations.
Maybe from the above discussion we point out some characteristics of the contingency approach as follows:
- Organizations are often systems and interact regularly with the environment.
- It is an integrative approach in the sense that it attempts to integrate with finding other managerial perspectives.
- This theory requires knowledge of various sets of situations and tools to work best.
- It is based on empirical researches and has developed its tools for real findings in varied situations.
Contributions of Contingecy Approach
- Managers get heps in innovating new and better approaches to meet complex situations.
- It gives the capability to think in analytical, critical, and multidimensional ways.
- Managers are given more freedom.
- Managers become more sensitive and alert.
Limitations of Contingency Approach/Theory
- This theory ignores the universally applicable principles.
- It fails to enlist all contingency variables.
- It focuses on the mere situation but which tools should be used in what situation is not specified.