Contingency Theory

1893 Words Oct 24th, 2012 8 Pages

According to Public Administration in Canada, (pg 70) contingency theory is one of the most recent theories in organizational structure, it argues that there is no "one best way" of structuring an organization. Instead contingency theory suggests that the best way to structure a particular organization is contingent(dependent) on a number of factors such as the attitudes of the managers and employees, the nature of the task performed by the organization and the nature of the environment.
The basic premise of Contingency Theory is that there is no one best way to organize a corporation, to lead a company, or to make decisions. There are too many external and internal constraints that will alter what really is the best way
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The four important ideas of Contingency Theory are:
1. There is no universal or one best way to manage.
2. The design of an organization and its subsystems must 'fit' with the environment.
3. Effective organizations not only have a proper 'fit' with the environment but also between its subsystems.
4. The needs of an organization are better satisfied when it is properly designed and the management style is appropriate both to the tasks undertaken and the nature of the work group.

There are too many external and internal constraints that will alter what really is the best way to lead in a given situation and some examples of such constraints (factors) include: The size of the organization, how the firm adapts itself to its environment, differences among resources and operations activities, assumptions of managers about employees, strategies being used, technologies being used, suppliers and distributors, consumer interest groups, customers and competitors, government and unions among others which shall be discussed below.
According to the contingency theory, a Theory X manager would not structure an organization in the same manner as a Theory Y manager. following McGregor, there is a tendency to look at the Theory X manager as always being the "bad