Foundation Of Management

Foundation of Management 1

FOUNDATION OF MANAGEMENT

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Foundation of Management 2

Introduction

There have been numerous academic pursuits in the field of management in an attempt to

establish an overall theory that is capable of providing a conceptual framework for

comprehending, application and research. The pursuit of such an approach in management has

led to countless, but often contradicting constructs and assumptions (Luthans, 1973. pp70). The

recently recognised situational impact on the control of complex corporations has resulted in the

emergence of unending contingency models. However, these models have been falling short of

comprehensive and integrative theoretical guideline for contingency management. The general

contingency management theory serves as an overall framework that incorporates the

environment, the quantitative and behavioural approaches to control, and the various

management processes; hence it offers an opportunity to bridge the disparity between

management practice and theory.

Theory

The contingency theory is the process of recognising and establishing functional

associations between environmental, organisational performance and management elements. The

contingency management theory claims that management efficacy is contingent; in other words,

the effectiveness of management depends on the interplay between applying management

approaches and specific situations (Otley, 2015.pp27). According to the contingency perspective,

there is no ideal method of ensuring management effectiveness in an organisation. Therefore the

best mechanism to manage a problem relies on the situation at hand. This theory recognises that

every organisation is unique; hence management is applicable in a wide variety of conditions.

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The theory posits that there is a wide range of internal and external factors that alter the best

approach to manage an organisation.

The contingency theory attempts to integrate management theory with practice in systems

structure. The forces of the environment determine the behaviour of a firm; it implies that for a

manager to successfully alter the conduct of any element of an organisation, he or she must

consider changing the situations affecting it. It makes the organisational system non-dependent

on managerial choice, but somewhat reliant on the external environment.

The contingency management theory attempts to improve the systems approach. The

systems approach has long recognised the relationship between the sub-systems of a firm

(Witzel, 2016). The contingency perspective also acknowledges that organisation systems

emerge from the interplay between the sub-systems and the external environment. Also, the

contingency approach attempts to address the precise nature of inter-dealings and inter-

relationships. The contingency perspective emerged from the need for new management theory.

It is somewhat considered the unifying theory of management considering its ability to achieve

objectives outlined below. It incorporates and synthesises a separate process, quantitative and

behavioural ideologies into an interconnected theoretical system. The theory functions to

integrate the systems approach to organisation and management, especially in the establishment

of specific functional associations between situational aspects, management ideologies and

application and organisational performance. It offers a pragmatic ground for evaluating and

interpreting the current structure of management knowledge and empirical research, thereby

fostering comprehension, control and prediction. The theory also provides a guideline for a

systematic and coordinated pursuit of new research on the sophisticated functional associations

between management and situational elements. Besides, the contingency theory creates a

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method of effectively converting theory and empirical findings into management information

and application methods that relate and assist the manager.

The contingency theory views each manager’s situation separately; it considers a variety

of external and internal factors and focuses on the action that appears the best fit for the current

circumstances. This approach, therefore, integrates the numerous schools of management. It

requires managers to become situational sensitive and practical selective to identify which

method in a particular circumstance, will be ideal to achieve management objectives and

organisational effectiveness. Contingency theory is most useful in motivation, leadership, and

designing organisation structure. Other potential areas it can be applied include employee

development and coaching, development of communication systems and control systems,

decisions of decentralisation and mapping information decision systems. Concerning motivation,

behaviour develops from personal reactions to significant elements of the surroundings, and

therefore individuals derive motivation from the influence of environmental variables (Miner,

2015). The implication on leadership is that leaders need to be flexible, kind, and considerate to

employees, not to mention act appropriately at the right time. The theory also posits that an

organisation needs to be designed appropriately to match the current situation, particularly the

firm’s environment and the technology it employs.

A situational approach

The general contingency theory relies on a situational perspective of solving managerial

problems. The situational approach claims that the best management mechanism relies on the set

of situations at the time. This approach is related to the open systems thought process and the

universal method of closed system thinking. There exists an ideological dichotomy between the

Foundation of Management 5

situational perspective and the Universalist perspective. The situational methodology bestows

conceptual validity at the cost of practical application.

The solution to this dichotomy involves proposing a mixture of the two approaches. The

objective here is tailoring the situational approach to retain the legitimacy of open systems, in

unison with improving its ability for a practical appliance. The contingency approach appears the

ideal way to achieve this objective.

The contingency approach

As we have seen earlier, the contingency theory is situational oriented but more precise

and vibrant. There have been various contingency approach applications; some of the most

recognised include organisation design, leadership and behavioural use, and quantitative method.

A study conducted on British Corporations pointed out the contingent relationships arising

between environmental factors such as technology, management elements such as organisation

structure and organisation performance. More studies also demonstrated a similar contingent

interplay between environment, constructs and performance (Witzel, 2016). The contingency

theory derives meaning from the contingency theory of leadership efficacy established by Fred

Fielder. Fielder recognised leadership effectiveness relative to group effectiveness to be a

component of two variables: task motivation and situations. The task motivation is measured

using the (LPC) least preferred co-worker scale. Fielder identified the contingent relationship

between environmental factors, leadership method and effectiveness. Fielder also agreed to the

notion that there is no ideal way of managing organisations; he established that leaders must

exercise their role to identify which management method will be useful in achieving the

organisational objectives in a specific situation (Luthans, 1973, pp71). The quantitative

Foundation of Management 6

applications of the contingency approach relate to the skills developed inside the operations areas

matching the requirements of the organisation. The needs of the organisation are subject to the

surroundings of the firm. Studies show the precise contingency relationships between diverse

situations and quantitative decisions making methods that generate effective organisational

performance.

Elements of contingency approach

First off, the contingency theory does not recognise the universal nature of management theory.

It emphasises on the situational orientation of management; managers, therefore, have the role of

deriving objectives, designing organisations and instituting strategies, and policies depending on

the prevailing conditions. Secondly, management policies and actions require adjusting to

changes in surroundings to become effective (Boer, Holweg, Kilduff, Pagell, Schmenner, and

Voss, 2015, pp1240).

Thirdly, contingency approach should better diagnostic abilities to predict and prepare for

environmental alterations. Fourthly, it requires managers to control adequate human relations

ability to contain change and stabilise it as well. Finally, the contingency approach needs to

apply the contingency model in the organisation design process, establishing communication and

information system, pursuing appropriate leadership styles and arraying ideal goals, strategies,

policies, practices and initiatives (Miner, 2015). Hence, contingency approach stands to unify the

theory of management for future advancement of the theory and practice.

Evaluation

The contingency approach presumes a realistic view in managing an organisation. It

dismisses the universal recognition of management principles. Executives are encouraged to be

Foundation of Management 7

situation driven rather than stereotype-oriented. It creates an opportunity for them to be creative

and innovative (Miner, 2015).

On the contrary, the contingency approach lacks a theoretical ground. An executive is

required to be aware of alternative actions before acting in a circumstance that is not always

applicable.

A contingency model of an organisation

To formulate a universal contingency theory of management, there must be a sound

organisation system. An organisation is as a social system comprised of sub-systems of resource

factors interconnected by varying managerial strategies, practices and policies, which interrelate

with environmental variables to accomplish a set of objectives. The elements of the organisation

define goals based on the relevant ecological and resource limitations. In designing the

contingency model for an organisation, first, the systems model is regarded viable. A systems

approach is necessary to emphasize the firm’s inbuilt relationship with its external environment.

Secondly, the relevant system variables require identification before being classified into a

taxonomical hierarchy comprised of primary, secondary and tertiary system variables (Otley,

2015).

Conclusion

There are potential practical problems that require resolving in the general contingency

theory; however, the method offers theorists, managers and researchers a practical and

prospective guideline for incorporating available contingency approaches and for organising

future management research. The rate of change and degree of complexity tends to increase each

day, which means the role of environmental factors will be increasingly fundamental to effective

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management. The growing ecological influence is expected to make the contingency approach to

management more essential in the future. However, if the contingency approach is to be effective

in sustaining and improving managerial effectiveness in a diverse environment, its establishment

must occur systematically, and in a unified and guided manner. The contingency theory is,

therefore, a conceptual model, and research-oriented framework that stands to impact the future

of management theory and practice potentially.

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References

Boer, H., Holweg, M., Kilduff, M., Pagell, M., Schmenner, R. and Voss, C., 2015. Making a

meaningful contribution to theory. International Journal of Operations & Production

Management, 35(9), pp.1231-1252.

Luthans, F., 1973. The contingency theory of management: A path out of the jungle. Business

Horizons, 16(3), pp.67-72.

Miner, J.B., 2015. Organisational behavior 1: Essential theories of motivation and leadership.

Routledge.

Otley, D., 2015. in Management Control. Critical Perspectives in Management Control, p.27.

Witzel, M., 2016. A history of management thought. Taylor & Francis.

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