Contingency Approach

Emanoil Topalov
Anna Marie Hubulova
Henshaw Osong
The Contingency Approach
What is the contingency approach?

• contingent - “Subject to chance” (Oxford Dictionary)

• contingency - “A future event or circumstance which is possible

but cannot be predicted with certainty” (Oxford Dictionary)

• part of organizational theory

• definition: theories explaining the effectiveness of organizations

based on external / situational aspects
The Contingency Approach
Aim of the Contingency Approach?

• Why contingency approach? Choose an organizational form

• Organic or mechanistic organizational structure

 The Contingency Approach
Mechanistic vs. Organic

Source: Management / Stephen P. Robbins, Mary Coulter. — 11th ed.

 The Contingency Approach
Mechanistic vs. Organic

Source: Management / Stephen P. Robbins

The Contingency Approach
Contingency Variables

• contingency theories have existed since 1960s

• contingencies that have been developed by different researchers
• Environment
• Size
• Strategy
• Technology
• lead to a better performance of the company
• intertwined with structure
Contigency Factors That Influence
Organisation Stuctural Design
The Overall strategic framework of the
Organisation

The interaction with the company‘s organisational objectives

with internal and external environment of the organisation
influences the overall stratergic design
Innovation - Requires Organic structures
Cost minimisation - Requires Mechanistic Structures

Source: Robins & Coulter (2013) Management (11th edition)

Immitation - Requires both Mechanistic and Organic
features in the organisational structures

Source: Deepak Agrawal,

Organizational structures 2009
 Size and Structure

As an organization increase in size a switch from

organic to mechanistic structure is madatory with
increasing rules and regulations
 Joan Woodward
(1916-1971)

Found wide differences in organizational structures:

• Management structures, levels of hierarchy

and spans of control
• Workload allocation
• Definitions of responsibilities
• Levels of accountability
• Skill levels of the workers

Source: http://www.institut-numerique.org/Joan
Woodward
 Technology and Structure

• Routine technology - mechanistic organizational structures

Characterised by higly centralized authority, rules and regulations, special functions

• Non-routine technology - organic organizational structures

Characterised by decentralization, low specialization, flatness

• Organisations adapt their structures to the technology they use

 Technology and Structure

Source: (Management by Robins & Coulter)

Exhibit 10-9 Woodward on Technology and Structure
Environmental Uncertainty and Structure
Uncertainty
Low High
Mechanistic Organic
Structure
Simple Complex
Differentiation
Low High
Decision Making
Centralized Decentralized
Level of Standardization
Standardized Mutual Adjustment
Environment Uncertainty and Structure
Uncertainty
Low High
Mechanistic Organic
Structure
Simple Complex
Differentiation
Low High
Decision Making
Centralized Decentralized
Level of Standardization
Standardized Mutual Adjustment
 Sources
https://en.oxforddictionaries.com/definition/contingency

Donaldson, Lex (2001) The Contingency Theory of Organizations

McKenna, Eugene and Beech, Nic (2002) Human Resource Management
Fiedler, Fred Edward (1967) A Theory of Leadership Effectiveness
Robins & Coulter (2013) Management (11th edition)
www.htw-berlin.de