In the earlier blog,
we looked at the larger context of International environment and the relevance
to the managers. Beginning today over the next few blogs we would look at some
of the theories that highlight the organization-environment relations. Today we
discuss the first of these theories - Contingency Theory.
The Contingency
Theory talks about the relation between the environmental condition and the
nature of organization that would develop in such an organization. A careful
observation of the business environment around us and we begin to realize that
this theory is really true.
Simply put, this
theory finds that a stable environment would have the organization with strict
line of authority, distinct areas of assigned responsibilities etc. Since, this
resembles a machine with strict rules and predictability - this is called
mechanistic organization. On the other hand if the environment is very dynamic,
the organization operating within it would have to be very flexible and
employees would have the freedom to respond with a fitting reply relevant to
the context. Given this lively nature, this is called an organic organization.
Of these 2 types -
mechanical and organic, none could be said as superior to the other. Each is
appropriate to different environmental conditions. In stable environment, the
mechanistic form is advantageous through the standard procedures to perform
routine activities. Under rapidly changing environment, the organic model
scores over the mechanistic model or organizations. Flexibility of organic
organizations, support the need for innovations and adaption.
To summarize - the most
effective way to organize is "contingent" upon the conditions of
complexity and change in the environment - Thus the name "Contingency
Theory".
Read in Kannada:
This is really a good post. For more information about this topic, have a look here..Contingency Theory – Introduction to Management (ITM)
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