Matching Contingency Variables and Organizational Structure Introduction

2397 Words May 6th, 2011 10 Pages
This essay argues that contingency theory is a useful guide to the design of contemporary organizations. In particular, the essay claims that contemporary managers can draw upon the contingency theory research literature relating to relationship between organizational structure and technology, size, the environment, and strategy to design an organization that is well suited to its situation and circumstances and hence more likely to survive and prosper in the long term.
This essay’s structure is as follows. The following section introduces contingency theory to explain its nature and implications for the management of contemporary organizations. Next, the essay explores the contingency theory research literature to identify the
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1. As organizations grow, they acquire more departments whose activities become increasingly specialized, whilst adding more levels to their organizational hierarchies. Increased size is associated with increasingly complex organizational structures (Astley, 1985; Cullen
Armstrong, and Baker, 1986; Bartol et al., 2001).
2. Growth is associated with a higher degree of administrative intensity, as the proportion of employees occupying staff positions grows1
(Cullen et al., 1986; Bartol et al., 2001).
3. Organizational growth is associated with greater recourse to formal rules and regulations to manage behaviour and coordinate activities.
That is, larger organizations exhibit a tendency to be more bureaucratic than small organizations (Goodling and Wagner, 1985;
Bartol et al., 2001).
4. As organizations grow, they decentralize; middle and lower levels of the organizational hierarchy acquire more decision-making authority and power (Robbins, 1990; Bartol et al., 2001).
Technology
Technology is the “…[k]nowledge, tools, equipment and work techniques used by an organization in delivering its product or service” (Bartol et al.,
2001, p. 314). Two key aspects of technology have attracted the greatest interest from contingency theorists, technological complexity and technological interdependence (Fry 1982; Bartol et al., 2001).
1 A staff position is one where the occupant provides expertise, advice,
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