PART 1
Explain and define contingency theory in your own words.
Contingency theory is an organizational theory that proposes that there is no single approach that is correct for managing and leading a company. However, the ideal approach to practice is contingent upon the existing internal and external conditions. The theory does not focus on leadership styles; it concentrates on internal and external situations that leadership experiences. The most significant perspective underpinning contingency theory is that leaders must adapt to different situations. In essence, leaders need to execute styles that align with the existing situation in the organization. Leaders must adapt to dynamic styles of leadership that fit the current situations, both internal and external. Contingency theory thus posits that no single organizational leadership style is accurate. Therefore, leaders must adapt to perform in an ever-evolving management landscape by implementing contingency theory.
Discuss some key assumptions of contingency theory.
Contingency theory holds on to several key assumptions. First, contingency theory assumes there is no single universally accurate means of managing and leading an organization. Shala et al. (2021) cite that contingency theory contradicts the “one size fits all” idea that agrees there is one universally correct approach across all situations to managing organizations. Moreover, the theory assumes that organizations are open systems that become effective by aligning characteristics like structures with the prevailing contingencies in precise situations. In addition, Zelt et al. (2019) noted that contingency theory assumes there are variables like technology that determine the ideal leadership styles of managers. According to Shala et al. (2021), contingency theory assumes managers must be flexible and adaptable to survive different contingencies in the prevailing situations. Lastly, the theory assumes that managers must constantly evaluate and upgrade the organizational structures to fit internal and external situations.
PART 2
What are the external variables in Contingency theory? Explain in detail.
Contingency theory claims that organizations become effective by aligning their characteristics with situational variables. The variables are either internal or external, depending on their origin. The external variables include environmental uncertainty and routine technology. According to Zelt et al. (2019), the environment entails competition, the conditions of the economy, and dynamic customer preferences, among other factors. Organizations must adapt their approaches to the existing environmental conditions. In addition, routine technology is a variable that determines the centralization and formalization of organizations. The effectiveness of management is contingent upon the adaptability of organizations to external variables. Leaders must align their styles to match the external contingencies for improved performance.
What are the internal variables in Contingency theory? Explain in detail.
Contingency theory assesses the impact of internal variables like the organization’s size on the optimal management of the company. Internal variables like strategies, structures, and size, among others, are determinants of organizational leadership styles (Zelt et al., 2019; Shala et al., 2021). For instance, a large organization requires leadership styles that can handle a large number of workers. However, in organizations with fewer employees, leaders can adopt strategies that fit small teams. In addition, larger companies require leaders to standardize their management, contrary to those managing smaller firms. The internal variables, including strategies, must align with organizational structures to fit the dynamic market. Smith et al. (2019) posit that strategies like decentralization of management differ from one firm to the next depending on the structures of a specific firm. Overall, internal variables, including organizational size, structure, and strategies, are critical for effective management.
References
Smith, J., Jayaram, J., Ponsignon, F., & S. Wolter, J. (2019). Service recovery system antecedents: a contingency theory investigation. Journal of Service Management, 30(2), 276-300. https://www.researchgate.net/profile/Frederic-Ponsignon-2/publication/333237793_Service_recovery_system_antecedents_a_contingency_theory_investigation/links/5d30286f458515c11c394ce3/Service-recovery-system-antecedents-a-contingency-theory-investigation.pdf
Shala, B., Prebreza, A., and Ramosaj, B. (2021). The Contingency Theory of Management as a Factor of Acknowledging the Leaders-Managers of Our Time Study Case: The Practice of the Contingency Theory in the Company Avrios. Open Access Library Journal, 8: e7850. https://doi.org/10.4236/oalib.1107850
Zelt, S., Recker, J., Schmiedel, T., & vom Brocke, J. (2019). A theory of contingent business process management. Business Process Management Journal, 25(6), 1291-1316. https://kups.ub.uni-koeln.de/9994/1/BPMJ%20accepted%20Manuscript.pdf
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