Lecture 3 Flashcards
What is the Contigency theory?
Contingency theory seeks to explain the effects of changing contingency factors on the organizational structure.
There are many possibilities to structure efficient organizations, as long as there is a close fit between contingency factors and the organizational structure.
Popular around the end 1950’s to the mid 70’s.
A continuous adaptation assuming rational behaviour, full flexibility, and no adaptation costs
What are some examples of contigency factors?
Size, Age, Strategy, Technical system and environment
When talking about different contigency factors, explain how size is a contigency factor.
The larger an organization, the more formalized behaviour
The more specialized tasks (i.e. Division of labour), the more formalized behaviour and larger administrative component (i.e. Middle line and technostructure)
When talking about different contigency factors, explain how age is a contigency factor.
The older an organization, the more formalized behavior
The older an organization, the more reliable and the higher level of legitimacy
The structure of an organization often reflects the age of founding of its industry (imprint thesis)
When talking about different contigency factors, explain how strategy is a contigency factor.
Structure follows strategy.
Strategic changes leads to structural change
Based on SARFIT-model
Structural Adaptation to Regain FIT
When talking about different contigency factors, explain how technical systems is a contigency factor.
The more it controls the work of the operating core, the more formalized work and the more bureaucratic structure
The more sophisticated the technical system, the more elaborate the administrative structure (greater decentralization and larger support staff)
When talking about different contigency factors, explain how environment is a contigency factor.
Organic organization structures are more often found in dynamic environments
The greater the complexity the more decentralized structure
What is design parameters?
Choices made by senior management as they design the structure of the organisation.
E.g:
- Design of positions
- Design of superstructure
- Design of lateral linkages
- Design of decision-making system
What is the congruence thesis?
The structure must reflect the situation to remain efficient
Efficient organizations require a close fit between
contingency factors and the organizational structure
What is the longitudinal model?
Focus on processes of change and the mechanisms having an impact on the processes.
- Organizations are characterized by inertia and uncertainty
- Change is primarily triggered by endogenous variables (but also contingency variables)
- History matters e.g. life-cycle models, dialectic models, evolutionary models
What is the cross-sectional model?
- Focus on the results of (social) processes, i.e. stages of equilibrium
- Do not seek to understand content of processes
- Independent contingency factors (exogenous) affect dependent structural variables (endogenous)
- History does not matter. e.g. neoclassical economic theory, contingency theory
Name the different types of decentralisation.
- Transfer of authority and responsibility
- Centralised: All power rests at a single point in the organization
- Decentralised: Extend to which power is dispersed among many individuals
- Selective decentralization is the extent to which decision-making power is delegated to different units within the organization – i.e. the technostructure.
