Question 1 - Contingency Theory Flashcards
(13 cards)
What are going to be the 3 questions answered during the introduction?
- What is contingency theory?
- Why was it created?
- By whom (theorists)?
What are going to be the topics for the body?
Theories with explanation and examples
What are going to be the topics for conclusion?
- Was it successful in what it set up to do?
- Is it still relevant, if so, why?
What is contingency theory?
Best understood as a set of theories that share a common core idea: there is no one best way to manage; the optional approach depends on the specific context.
Why was it formed?
Formed as a response to the limitations of earlier “universal” management theories, particularly those who promoted “one best way” like classical and scientific management theories
Who are some of the most famous theorists in contingency theory?
Some of the most influential theorists in the field are Laurance and Lorsch, Joan Woodward and Burns and Stalker.
What is Lawrence and Lorch’s contingency theory?
Lawrence and Lorch’s Contingency Theory focused on how organisations should be structured based on the complexity and uncertainty of their environment. Their theory is centered around two core concepts:
Differentiation: refers to how different departments within an organisation develop their own procedures and cultures based on their specific goals. A marketing and a production department, for example, could each face different levels of environmental uncertainty, resulting in each department’s development of its own distinct subculture and processes.
Integration: this is the extent to which these differentiated departments work together effectively: planning, communication, roles etc .
What do Lawrence and Lorch argue in their theory?
They argue that the more complex and uncertain the external environment, the more differentiated a company needs to be, but as differentiation increases, so must integration to avoid fragmentation and ensure the whole organisation works for a common goal
What is Joan Woodward’s technology and structure theory?
Her research focused on how the type of production technology used by a company influences the most effective organisational structure. The key concept in her research is the division of production technology into 3 main types:
1 - unit or small batch production: Custom, low-volume production (e.g handmade furniture, aircraft)
Requires flexible structure, low personalization.
2 - Mass or large batch production: High volume, standardized goods (e.g car manufacturing)
Best supporter by a mechanistic, hierarchical structure
3 - Continuous Process Production: High volume, automated and ongoing (e.g oil refining, chemical production)
Needs a more decentralised but technically expert structure.
What did Woodward argue in her works?
Woodward argued that the appropriate organizational structure is highly dependent on the nature of the production technology used.
What are Burns and Stalker’s Mechanistic Vs Organic Systems?
Burns and Stalker identified two contrasting types of organisational systems:
Mechanistic Structures: A rigid hierarchy with a clear line of command and centralized decision-making, more suitable for stable environments. (E.g car manufacturer)
Organic Structures: Flexible in regards to roles,responsibilities and teamwork instead of centralized decision-making, best suited for dynamic, rapidly changing environments (e.g tech startups)
What is the main accomplishment of Burn and Stalker’s Work?
Burns and Stalker’s work highlighted the need for flexibility in organisational design, laying the ground for later contingency theorists.
What should be said during conclusion?
Contingency theory was able to show the necessity of broader analysis regarding organisational structures: both the internal and external environments are taken into consideration, which is relevant to 21st century managerial problems, despite that, the lack of a unified concise theory makes applicability an issue.
