CONTINGANCY APPROACH

BY MBA B4

MBA B4

21

Historical Background of Management

Ancient Management
Egypt (pyramids) and China (Great Wall) Venetians (floating warship assembly lines)

Adam Smith
Published The Wealth of Nations in 1776
Advocated

the division of labor (job specialization) to increase the productivity of workers

Industrial Revolution
Substituted machine power for human labor Created large organizations in need of management
MBA B4 22

Development of Major Management Theories

MBA B4

23

Major Approaches to Management

Scientific Management General Administrative Theory Quantitative Management Organizational Behavior Systems Approach Contingency Approach

MBA B4

24

Contingency

Contingency means an event which may or may not occur; that which is possible or probable; a fortuitous event; a chance.

MBA B4

The Contingency Approach

Also sometimes called the situational approach. There is no one universally applicable set of management principles (rules) by which to manage organizations. Organizations are individually different, face different situations (contingency variables), and require different ways of managing.

MBA B4

26

Popular Contingency Variables

Organization size Routineness of task technology Environmental uncertainty

Individual differences
MBA B4 27

Popular Contingency Variables (contd..)

Organization size
As size increases, so do the problems of coordination.

Routineness of task technology

Routine technologies require organizational structures, leadership styles, and control systems that differ from those required by customized or non-routine technologies.

Environmental uncertainty
What works best in a stable and predictable environment may be totally inappropriate in a rapidly changing and unpredictable environment.

Individual differences
Individuals differ in terms of their desire for growth, autonomy, tolerance of ambiguity, and expectations.
MBA B4 28

Features of Contingency
Preparation of strategies, policies & plans as per situation for prevailing. Improves diagnostic skills so as to anticipate & ready for environmental changes. Managers should have HR skills to accommodate & stabilize change

It is If then & practically suited approach.

MBA B4 29

Limitations Of Contingency Approach

Inadequate literature Complex Reactive not proactive

MBA B4

210

Relationship Between Two Approaches

SYSTEMS APPROACH 1.Treats all organizations alike irrespective of their size, cultural settings etc. 2.Stresses on interaction and interdependence between systems and subsystems. CONTINGENCY APPROACH 1.Treats each organization as unique entity. 2.Identifies the exact nature interdependencies and their impact on organization design and management style. 3.Down to earn and action oriented approach. 4.Pragmatic and action oriented.
211

3.Studies organization at abstract and philosophical level. 4.Vague and complex.

MBA B4

Conclusion

BOTH THESE APPROACHES ARE COMPLEMENTARY TO EACH OTHER.

THE MANAGER SHOULD USE OTHER APPROACHES UNDER THE FRAMEWORK OF CONTINGENCY APPROACH.

MBA B4

212

THANK YOU
MBA B4 213