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The contingency viewpoint of management proposes that there is no

standard for management; instead, management depends on the


situation.

LEARNING OBJECTIVE [ edit ]

Recognize the potential flexibility and value that can be captured through considering
contingencies and alternatives from a managerial perspective

KEY POINTS [ edit ]

The contingency viewpoint is a more recent development in organizational theory that attempts


to integrate a variety ofmanagement approaches, proposing that there is no one best way to
organize a corporation or lead a company.

Debating which one of the previous approaches to management is the "best" approach is
irrelevant in contingency theory, since the heart of the contingency approach is that there is no
"one best way" for managing and leading an organization.

The contingency viewpoint focuses on management's ability to achieve alignments and good fits


between employees and circumstances by considering multiple solutions to determine the best
one for each particular problem.

The focal point, and modern relevance, of this perspective is the concept of adaptability.
Technology and globalization evolve the business environment so rapidly that
adaptable strategies are more appropriate than static ones, making contingencies key to success.

TERM [ edit ]

Contingency Viewpoint
A heory of management that proposes that there is no standardfor management practice, instead
it should depend on the situation.

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FULL TEXT [edit ]

The contingency viewpoint is a more


recent development of organizational
theory that attempts to integrate a variety

of management approaches by proposing

that there is no one best way to organize a

corporation or lead a company. Instead,

the optimal course of action is contingent

or dependent upon the

specific internal and external situation

management may find itself in.


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Perspective on Previous
Theories

The contingency approach claims that past theories, such as Max Weber's bureaucracy theory

of management and Taylor's scientific management, are no longer practiced because they fail

to recognize that management style and organizational structure are influenced by various

aspects of the environment, known as contingency factors. Debating which one of the

previous approaches to management is the "best" approach is irrelevant in contingency

theory, since the heart of the contingency approach is that there is no "one best way" for

managing and leading an organization.


Possibilities
The basic premise behind contingency theory is that there are limitless possibilities that companies must
be prepared to adapt to strategically.

An Outline of Contingency Theory

By its nature, contingency theory avoids static rules. There are, however, common

contingencies that businesses must react to, including technology, competition, governments,

unions, consumer interest groups, new markets and consumers, and economic factors. Fred

Fiedler takes this a step further to identify three leadership styles and empirical situation


measurements to assess the degree of favorability a given contingency offers:

1. The leader­member relationship, which is the most important variable in determining

the situation's favorableness.

2. The degree of task structure, which is the second most important input into the

favorableness of the situation.


3. The leader's position power obtained through formalauthority: this is the third most
important dimension of the situation.

In other words, leadership needs to ensure that it is able to assess a situation, determine the
task structure, and obtain a position of formal authority in order to be able to adequately

manage a contingency situation.

An example of the contingency viewpoint in action is a manager facing a situation with an


employee who regularly shows up late to work. A manager could have a written protocol for

this situation in which there is only one option: give the employee notice. Under the
contingency viewpoint, however, the manager may decide to better understand the situation

by talking to the employee about why s/he is late to work and then deciding on the
most effective and appropriate course of action. The value in this lies in the information the

manager acquires about the employee: maybe there are extenuating circumstances that can
be relatively easy to work around. In this case, the contingency approach allows the employee

to keep her/his job and saves the manager from going through the time and trouble to
dismiss one employee and hire another.

A leader's ability to manage under the contingency viewpoint depends largely on the nature
of the environment and how the organization relates to the environment. Therefore, the

organizational structure is a major component of the approach that management may take in
resolving problems under contingency theory.