Difference Between Open System And Contingency Approach

There have been numerous theories surrounding leadership, which attempt to explain which form is most effective in the workplace. A universalistic approach was once used to rationalize leadership and it was believed that successful leaders possessed certain common abilities and traits. However, today due to external factors such as globalization and advanced technologies, there has been an evolution towards a new paradigm of leadership. Subordinates want to feel empowered and engaged at the workplace and often the behaviors and relationships between leaders and their subordinates become important to understand in order to fully understand effective leadership. Contingency theories have been developed in which people began to look at the behavior of leaders in specific situations. Two such contingency theories are: Path-Goal and Hershey and Blanchard’s Situational Theory.

The open system leaves the door open for better communication. The open system focuses on the organization and the external possibilities while the closed focuses on internal possibilities when problems occur. The open system is influenced by the environment, which also causes weaknesses in the structure since every day there is change. Environmental changes cause organizational changes. The close system in an organization shows organized structure and order, however, lack structural mobility (“Open Versus Closed Systems,” n.d.).

Open systems perspective also suggests that organization's efficiency is equally important to it's success. An organization is efficient when it produces more outputs with less then normally required inputs, and when it's internal subsystems have good coordination among them. But this is difficult in reality. Because there are some negative elements in subsystems such as miscommunication and hostilities, which undermine efficiency of organization. These elements cannot be eliminated as subsystems of an organization are also open systems and organization gets affected by them also. (McShane & Steen, 2012, p.6)

When you consider Fiedler’s Contingency Theory, there are two types of leaders who are effective in different types of situations. There are the task-oriented leaders who are effective in scenarios which need structure and often clarification. These leaders are often found to be most effective in crisis type

The contingency approach, founded in the 1970’s differs from the behavioral approach. “Examining various situational variables is central to understanding leadership in organizations, according to the contingency theorist” (Stojkovic, Klofas & Kalinich, 2012). Fiedler’s Contingency Model is one of those contingency theories.

It is depicted that modern organizations tend to incorporate the aspects of the open systems with those of the natural and rational perspectives. Examples include the institutional, transaction cost, and the contingency and the contingency theories. Organizations adopt the open system that accommodates the other two theoretical perspectives for it to exist (Davis & Scott, 2006). These organizations tend to have structures that are based on the processes, the products, and the function.

From the point of view of the external environment, the effectiveness of organization would gain much more support when the company do the business with their consumers and suppliers, due to the company has provided a wonderful environment for the employees (Businessweek, 2007). Obviously, when the company’s reputations has been known and improved because

Fiedler’ model is considered the first highly visible theory to present the contingency approach. It stated that effective groups depend on a proper match between a leader’s style of interacting with subordinates and the degree to which the situation gives control and influence to the leader (Fiedler, 1967). Fiedler argued that the leadership style could be indentified by

The contingency model of leadership is based upon the relationship between three aspects of leader-follower-situation model. Apart from this contingency model, leaders are assumed to act in a flexible manner.

Before the nineties the Coca-Cola company was having a centralize system of control, but after sometime they realized that if they had to meet the demands of the customers they should adopt a decentralized system in which the authority of decision making is distributed between different managers so that every sector can be managed effectively. This system was implemented in the nineties by the company’s board of directors. Now the organization is having two groups who are responsible for operating:

The Contingency Theory applied to factors unique to each situation to determine whether specific leader characteristics and behaviors will be effective. Researched findings credit Fiedler 's contingency theory as the first to specify how situational factors interact with leader traits and behavior to influence leadership effectiveness. This theory suggests high interest in the situation determines the effectiveness of task- and person-oriented leader behavior.

Fielder’s contingency theory argues the effectiveness of a leader is contingent to leader ship style and the extent the leadership situation gives him or her influence and control over outcomes.

First, the contingency paradigm, a closed system, considers uncertainty and how changes in the environment affect the internal aspect of the firm (Tolbert & Hall, 2009, p. 162). The elements can include items such as size and technology, as it relates to customer demand to name a few. Another example might be that a small firm would function better in a centralized fashion verses a large firm that would benefit more from a decentralized method, whereas, fast paced environments may require high technology and slow paced industries do not. The point here is that there is not one best practice for leading or structuring a firm, hence, the company should fit within the environment depending on internal and external factors (Long, 2014). It is important to note, hhowever, coordination can become problematic in this theory. For illustration, let’s say some environmental factor cause a company to change structure from a simple structure to a more complex one. Problems with coordination in the separate departments could present itself as communication and interaction is vastly different. The key here is for the firm to adapt to the environment, as well as, integrate the activity to make a seamless whole and reduce uncertainty. In fact, the best way to organize should be contingent upon

Contingency Theories:- Stoelhorst and Peter (2013) said that this leadership theory mainly focus on particular variables which shows the relation with the environment. This will indicates about what kind of leadership will be the most effective? This theory simply states that no theory is universal perfect but the implement of theories depends on the variability, it also

This discussion will first look at the organization as an organism. Then, discuss the implications of open systems and the importance of the environment. Finally, evaluate the strengths and limitations of the organismic metaphor.