What are the contributions of the contingency approach to management practice?

The contingency approach to management emerged from the real life experience of managers who found that no single approach worked consistently in every situation. The basic idea of this approach is that number management technique or theory is appropriate in all situations. The main determinants of a contingency are related to the external and internal environment of an organisation.

The process, quantitative, behavioral, and systems approaches to management did not integrate the environment. The often assumed that their concepts and techniques have universal applicability. For example the process theorists often assumes that strategic planning applies to all situations; the quantitative experts generally feel that linear programming can be used under all conditions; the behavioral theorist usually advocates participative goal setting for all superior-subordinate pairs; and the system advocates tend to emphasize the need for computerized information flows in all situations. On the other hand practicing managers find out that a particular concept or technique from the various approached just does not work effectively in various situations. The theorists accuse practitioners of not applying the technique properly, and the practitioners accuse the theorists of being unrealistic. The contingency approach does incorporate the environment and attempts to bridge this existing theory-practice gap.

Contingency approach to management advocates that managerial actions and organisational design must be appropriate to the given situation and a particular action is valid only under certain conditions. There is no one best approach to management and it all depends on the situation. In other words, managerial action is contingent upon external environment. There is no one best approach for all situations. What a manager does depends upon a given situation and there is an active inter-relationship between the variables in a situation and the managerial action. Contingency theory attempts to analyse and understand these interrelationships with a view towards taking the specific managerial actions necessary to deal with the issue. This approach is both analytical and situational, with the purpose of developing a practical answer to the question at hand.

There are three major elements of the overall conceptual framework for contingency approach to management; the environment, management concepts and techniques and the contingent relationship between them.

Features of Contingency Approach to Management

1. Management is externally situational: the conditions of the situation will determine which techniques and control system should be designed to fit the particular situation.
2. Management is entirely situational.
3. There is no best way of doing anything.
4. One needs to adapt himself to the circumstances.
5. It is a kind of “if” “then” approach.
6. It is a practically suited.
7. Management policies and procedures should respond to environment.
8. Managers should understand that there is no best way of managing. It dispels the universal validity of principles.

Superiority of Contingency Approach

Clear-cut emergence of contingency approach to management was noticed after the popularization of systems approach. The contingency theorists accept open adaptive nature of the organisation and the interdependency between various sub-systems of the organisation. But they have pointed out that the systems approach does not adequately spell out the precise relationship between organisation and its environment. It is too abstract and difficult to apply in practice. They have tried to modify and operationalise the system framework.

The systems approach to management takes a broader view of organisational variables and employs a comprehensive model of human beings. It takes into account the full range of human needs and motives. On the other hand, contingency approach to management is concerned mainly with the structural adaptation of organisation to the task environment. But both these viewpoints are not mutually exclusive. They should be treated as complementary to each other. The manager should use systems and other approaches under the framework of contingency approach.

As you refine your organizational structure, you will have to review your managerial philosophy to determine its effectiveness. One popular strategy is to implement the contingency theory of management, which is premised on the idea that there are multiple ways for managers to make decisions in an organization based on different factors. In other words, the contingency theory of management requires flexibility on the part of your managers to evaluate each situation and make decisions unique to those situations. Applying the contingency theory of management requires managers to stay alert and avoid relying on rules, policies and tradition as the only guides for their choices. To improve productivity and employee morale, managers must understand the importance of contingency theory and its positive implications at the workplace.

Provides Solutions in Specific Situations

Using a contingency management style, managers can respond to the causes of individual problems rather than overreacting to the problem itself. Instead of focusing on the results of the problem, managers who understand the importance of contingency theory will seek to understand all of the influences that led to the problem. For example, a warehouse manager dealing with the problem of decreasing efficiency as it relates to loading and unloading goods may look closer and realize that the lack of proper ventilation is causing warehouse workers to tire quickly and need to take frequent breaks. Had the manager simply relied on motivation theories as an automatic response to productivity problems, he might not have missed the real culprit for the decrease in production.

Allows a Macro View of the Organization

The importance of contingency theory also extends to the way managers think about the consequences of a decision as it relates to the entire company. A manager’s actions must reflect the culture, commitment to employee safety and well being, profit orientation, branding positioning and customer service attitudes of the entire organization. The contingency management style forces managers to make decisions and resolve problems based on how it will impact the company, not solely how it will affect a division or department. For example, let’s say a manager discovers the research and development division of a company is months behind on perfecting a new product. Using the contingent management style, that manager wouldn’t publicize this problem to the entire company; instead, he would work closely with the R&D leaders to identify the sources of the delay and fix them. Publicizing the problems in R&D could lead to a decrease in employee morale, especially in the sales and marketing departments that are working diligently on strategies to promote that product.

Increases Managerial Discretion

One of the other major implications of the contingency theory for managers is that it provides them with far greater discretion. Whether you have a top-down or a flat organizational structure, your managers are a linchpin of implementing decisions and ensuring that your employees remain committed to specific goals. Because the contingency theory gives managers a wide range of ways to react to problems, it also gives them significant discretion in their decision-making. Business owners who implement contingency theory must allow their managers to bend policy or even override it if the circumstances demand it. Managers must embrace the agile thinking that is required to effectively use contingency theory in the workplace. That means managers must interpret policies and regulations loosely, yet still adhere to the company’s values and visions when they make decisions. While you may balk at giving your managers this type of discretion, remember that contingency theory is all about adapting to changing circumstances without adopting a one-size-fits-all approach. Business owners often find that giving managers this type of freedom results in increased confidence in decision-making as well as managers who feel empowered and trusted to do their jobs without needing constant approval.

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