Modern Organization Theory – Contingency Theory

In the study of the Modern Organizational Theory, we talk about Simple Theory as well as Contingency Theory. In this article, we will look at the contingency theory and also how it differs from the other organizational theories.

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Modern Organizational Theories – Contingency Theory

The contingency theory is simply an extension of the systems organizational theory. According to this theory, there is no particular managerial action or organizational design that is appropriate for all situations.

In fact, the design, as well as the managerial decision, depends on the situation. In other words, it is contingent on the situation and circumstances. Therefore, the Contingency Theory is also referred to as a situational theory.

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Like in the systems organizational theory, the contingency theory considers an organization as a system which consists of several sub-systems.

Further, both these theories lay a lot of emphasis on maintaining and adapting activities for the growth and survival of the system.

They also deal with patterns of relationships and the interdependence among the elements of the system. However, there are some differences between the two.

Browse more Topics under Evolution Of Management Thought

• Management as Science
• Management as Art
• Fredrick Taylor Principles of Scientific Management
• Henri Fayol Principles and Techniques of Management
• Bureaucratic Theory by Max Weber
• Classic Organization Theory
• Neo-classic organization theory
• Modern Organization Theory- Systems Theory

Learn more about Modern Organization Theory – Systems Theory here in detail

Differences between the Systems and Contingency Organizational Theory

• The systems theory focuses on the internal dynamics of an organization’s structure and behavior. On the other hand, the contingency organizational theory focuses on the external determinants of the organization’s behavior and structure.
• The systems theory lays down universal principles for application in all situations. On the other hand, the contingency organizational theory works on the prescription which says that ‘it all depends’.

In other words, the contingency organizational theory spells out the relationship between an organization and its external environment and endeavors to fill a critical lacuna of the systems theory.

Further, it offers a more explicit understanding of the relationship between various variables of the environment. It is also action-oriented and directed towards the application of the system theory’s concepts.

Hence, it offers useful and practical insights to managers in turbulent working environments.

Further, the contingency organizational theory seeks to emphasize the multivariate nature of an organization. Further, it tries to understand how an organization operates under varying conditions in specific circumstances.

Also, the theory directs its views towards recommending organizational designs and managerial actions which are most appropriate for specific situations.

The theory suggests that apt organizational design depends on environmental variables like size, technology, people, etc.

A quick comparison of all organizational theories

Basics	Classical	Behavioral	Systems	Contingency
Focus	Work as well as the economic needs of workers	Small groups and also human behavior	Interrelationships	Situational variables
Structure	Mechanical and also Impersonal	Organization as a social system	Open Systems view of the organization	Environmental determinants of organization
Means	Empirically derived Principles	Group participation	Conceptual skills	Environmental Scanning
Results	Work alienation as well as dissatisfaction	Satisfied and also efficient employees	Systems theory as well as design	Dynamic management style
Practices	Authoritarian and also bureaucratic	Democratic and also participative	Systems concepts	Business environment Interface
Main Exponents	F. W. Taylor, Henri Fayol, Max Weber	Elton Mayo, A.H. Maslow, Douglas McGregor	F.E. Kast, J.E. Rosenzweig, R.A. Johnson	P.R. Lawrence, J.W. Lorsch, J. Woodward

Solved Question for You

Q1. What is the Contingency Organizational Theory?

Answer: According to the Contingency Organizational Theory, there is no best way to organize a corporation, lead a company, or make decisions. In fact, the best course of action is dependent or contingent internal and external situations.