Introduction
The XX century is characterized by rapid development of management in both theory and practice. According to to G.Cole (2004), “the search for universally applicable principles of management began in industrial heartlands of Europe and America in the last years of the nineteenth century”. (13) A variety of theories of management were developed both by theoreticians and practicing managers. Different approaches led to the emergence of multitude of definitions of management. Most popular definition if management belongs to H.Fayol, who considered management from the point of view of an activity and defined the term “to manage “ with reference to management’s most important functions – forecasting, planning, to organize, to coordinate, to command and to ensure control. With the flow of time such activity as “commanding” was substituted by “leading”, “providing guidance” and “ensuring motivation”.
Most common managerial theories are classical theory of management (cofounded by H.Fayol), human relations, leadership and contingency approaches. In the opinion of P.Aditule (), classical (universal) school of management can be characterized by such features as that it “believes in one central authority; believes that the delegation of authority is very important; believes that span of control should be well defined; believes that there should be a clear vision between line and staff management” (7). Human relation school concentrated on making use of human capital and using psychological approaches to increase productivity of employees. Leadership theory stresses importance of leadership style and relations between a leader and subordinates.
In this assignment we would like to provide concentrate on contingency approach to management, stress relevant key issues, critical points and practical employment of the concept.
Contingency approach
Contingency approach is the one, which encompasses several theories in terms of management, leadership and organization’s design. Generally, according to M.Berman (1971), contingency can be defined as “a relationship between behavior and its consequences”. (4)Founders of contingency approaches criticized the approaches, introduced by other management school (classical, human relations etc.) as they claimed that the latter failed to consider the fact that management style and organization’s design are inevitably subjected to influence by various segments of environment. The roots of contingency approach can be also found in the general theory of systems and open system science. According to V.Zeithaml, P.Varadarajan and C.Zeithaml (1988), “contingency approaches are positioned within management as mid-range theories between the two extreme views which state either that universal principles of management and organizations exist or that each organization is unique and each situation must be analyzed separately (37). Despite being applied to different aspects of management, contingency approach is based on a range of uniform ideas, which represent broad generalizations, worked out by theoreticians in such fields as management, organizational behavior and leadership studies.
So, main features of contingency approaches lie in acknowledging the fact that there is no universal best way to do things (e.g, provide leadership and guidance, make decisions or select an organizational structure); stressing the strong need to consider a wide range of external and internal factors to make a particular decision; suggesting that it is worth putting emphasis on decision, which is the best one to fit existing situation; proper design of an organization and choice of the way to act predetermine better performance of tasks. One of most important suggestion with regard to contingency is that every management situation should be reviewed separately, so, according to contingency approach, manager’s crucial task is to develop such skills and traits, which will help him/her to identify situational factors and draw relevant conclusions. Furthermore, contingency approach states that a desired result can be achieved in several ways. Dependently on fields of study different contingency and response variables can be identified. For instance, strategic management operates such contingency variables as environmental dimensions (response variables will be business strategy, positioning and differentiation); in organizational behavioural studies most commonly identified contingency variables are task structure, leader-member relations (response variables will be leadership style); in organization theory contingency variables are technological type, task environment (response variables can be identified as organizational structure, the level of differentiation or integration).
Contingency theory is believed to be one of most practical approaches to management and can be applied in various situations. As it was already mentioned, contingency approaches have different implications. We would like to emphasize their implications for such subdisciplines as management (including strategic aspect), organizations (merely structural aspects) and organizational behavior (with special stress on situational leadership theories)
Contingency approach to management
Contingency approach to management has formed due to real experience of practicing managers, who understood that no common approach is applicable in different situations. Despite existence of management principles, worked out in terms of classical school of management, it became evident that every managerial situation and alternative requires individual approach and comprehensive analysis of external and internal forces, which are likely to exert an influence on the outcome of the decision.
Contingency approach to organizations
One of crucial issues of management deals with answering a sole question, which can be formulated as following: “How to manage an organization under different circumstances?”. It is evident that different external and industrial environments require establishing different organizational structures and characteristics. To answer vital managerial question, contingency approach was developed. According to Bacher (2007), main contingency concepts deal with task uncertainty and innovation. Lex Donaldson (2001) assumes that “some of more important contingency theories of organizational structure involve three contingencies of the environment, organization’s size and strategy” (2). These contingencies affect mechanistic, size and divisional contingency respectively. Paying necessary attention to ensure organizational structure’s correspondence to outer circumstances is vital in terms of its survival and effective performance. Furthermore, according to the opinion of the vast majority of researchers in the field of organizational theory, the formal structure of an organization exerts an influence on defining the roles of managers and employees and thereby affects their behavior within organization. The way managers and employees perceive these roles and manage to accomplish with necessary requirements in context of organization’s functioning and development is one of factors, underlying company’s success.
Contingency approach is considered beneficial in terms of considering organizations’ being different, facing different situations under different external and internal circumstances. Combination of these factors predetermines the need to go away from universal organization theories and moving further to analyzing every definite situation and finding the most suitable way to act in this situation. As while deciding on organizational structure and relevant issues, decision-makers are unlikely to lack time, situational approach is especially beneficial in this regard.
Situational theories of leadership
As we have already mentioned, leadership is the activity of leading a group of people or some kind of organization and capability of doing it. One of crucibles of leadership consists in being able to adapt to ever changing outer and inner circumstances. Leaders can exercise their functions, using wide variety of leadership styles (authentic, democratic, LMX etc.) Styles differ from each other due to the way the leader communicates with subordinates and organizes group work. Furthermore, it is easy to identify leadership style after having got the data on decision-making style For instance, participative decision-making style is impossible for the group, guided by the leader, who adheres to authentic leadership style.
Contingency approach to leadership was launched in 1960- 1970s by P.Hersey and K.Blanchard. The fundamental statement of situational leadership models lie in the fact that there is no best style of leadership, so, effective leader chooses it, dependently on a particular situation, taking into account his/her managerial goals with respect to it. According to P. Northouse (2009), “the situational approach is constructed around the idea that employees move forward and backward along the developmental continuum, which represents the relative competence and commitment of subordinates. For leaders it is essential that they determine where subordinates are on developmental continuum and adapt their leadership styles so that they directly match their style to developmental level”. (93) Exactly the same ideas is introduced by Martín M. Chemers (1997), who claims that “situational leadership theory builds a prescription for supervisory behaviour based on the stage of development or maturity of the subordinate, who is the target of the leaders’ influence efforts”. (56) To my mind, such a formulation of the idea is quite a narrow one, as it encompasses only one variable, not taking into account other peculiarities of the situation.
Despite the fact, that contingency approach tom leadership predetermined no need to follow any models, theoreticians developed four basic styles, which can be tailored dependently on a current situation. These models are about telling (when the leader’s core function is to provide instructions and guidance to his/her subordinates), selling (includes more two-way communication), participating (leaders are less focused on providing instructions, but stress motivating subordinates and providing them with some freedom for activities) and delegating (the manager, who uses this style delegates almost all functions, concentrating on monitoring the performance and ensuring slight corrections and suggestions), To sum up, situational leadership approach does not reject any styles and models, but provides for the necessity to tailor every existing model or style to current situation.
Key issues to make the approach work
Theoretically, contingency approach helps decisions, which fit practical situations. Nonetheless, to make the approach work effectively, it is crucial to be able to make an analysis of key issues associated with this approach. According to Zeithaml, P.Varadarajan and C.Zeithaml (1988), these issues are associated with selecting and measuring variables of performance (this choice is crucial in terms of ensuring response variables matching the context), identifying contingency factors and uniting them into groups, ensuring contingency factors being independent, avoiding simple dichotomies (e.g, making a choice between highly centralized and decentralized organizational structures), considering managers’ ability to influence environment, trying to consider static or dynamic nature of relationships between variables, acknowledging the fact that different responses can exist towards single situation and using different sites, data and methods of analysis to ensure its objectiveness.
Criticism of the approach
Contingency approach to management is one of most widely used in modern management, marketing and organizational behavior. Furthermore, is development had an irreversible influence on the way students are taught aforementioned disciplines, as an emphasis was moved from teaching theory to providing future managers and marketers with the chance to conduct an objective analysis of existing situation, think of particular alternatives, choose most appropriate one and develop an action plan to get it implemented. Despite frequent application, contingency approach is often becoming severely criticized.
First of all, the important drawback lies in model’s failure to explain decisions, which are taken empirically. As the decision is considered to be based on sole current situation and combination of factors, empirical data are not taken into account. Secondly, contingency approach often fails to consider dynamics of variables’ development. Furthermore, according to Griffin&Moorhead(2009), contingency approach is unrealistic due to the fact that minor changes in environment need to be met with the help of relevant alterations with respect to organizational structure, organization of performance etc. (436) An important issue lies within the fact that contingency approach is not likely to be successfully applicable in case there is no time to conduct an analysis of the environment. Basing teaching future managers and marketers solely on promoting contingency approach can lead to their failure to pay attention to studying theoretical and empirical data due to false belief, according to which they will be able to make the right decision just on site.
Contingency approach in Google
Google, which is world’s largest IT Company, is famous not only for its performance records, but the way it is managed. It is evident that Google’s managers use contingency approach to management. Using such approach is unavoidable for Google, which operates in the environment, highly influenced both by peculiarities of the industry and external factors (for instance, as international IT and entertainment law is still rapidly emerging, political and legal factors are the ones to exert inevitable influence on Google’s performance). Moreover, newest approaches to management are needed to satisfy company’s need to ensure the development of highly ambitious and innovative projects. By the example of Google, we can see that it uses not only contingency approach (gets every project considered and managed separately based on thorough marketing and managerial research), but puts a great emphasis on human relations model, emphasizing psychological needs of employees and providing them with unique working conditions and freedom to promote their ideas and getting the implemented. . According to G.Henderson (1996), these values include striving for achievement, striving for membership and affiliation, striving for knowledge and striving for power and status (13).
Particularly a combination of different approaches lets Google produce innovations and conduct highly competitive products. By the example of Google we see, that for a manager or marketer it is important not only to be able to evaluate the situation and make decision, but create a unique corporate culture and image of an organization.
Conclusion
A variety of approaches to management characterize modern managerial science. One of most widely discussed and applied approach to management is contingency model, which can be seen through the lens of management as a whole, organizations and leadership. The main feature of this approach lies in emphasizing absence of single way to tackle existing situation and strong need to make decisions and act, adhering to a particular situation, having thoroughly considered both external and internal factors, which exert an influence on it. When applying contingency approach, it is crucial to take into account important key issues, highlighted in the assignment. Despite overall application, contingency approach has become subjected to important criticism, which deals with both the approach itself and its applicability to particular situations. By the example of Google, we can see that real corporations often use combinations of approaches to management to ensure practical implementation of their goals.
References
Adetule, P.2011.The Handbook on management theories. Bloomington: House
Northouse, P. 2009.Leadership: theory and practice. Thousand Oaks: SAGE publications
Bacher, C. 2007. Contingency theory. Munich: GrinVerlag
Berman, M.(ed) 1971.Applying contingency management techniques. Englewood Cliffs: Educational technologies
Chemers, M.1997.An integrative theory of leadership. Mahwah: Lawrence Erlbaum
Associates Inc. Publishers
Cole, G. 2004. Management: theory and practice. Mason: Cengage Learning
Donaldson, L. 2001. The contingency theory of organizations. Thousand Oaks: SAGE publications
Griffin, R. W., Moorhead, G. 2009.Organizational behavior: managing people and organizations. Mason: Cengage Learning
Henderson,G.,1996. Human relations issues in management. Westport: Greenwood publiching group
Zeithaml, V., Varadarajan, P. and Zeithaml, C. 1988. The contingency approach: its fundationd and relevance to theory-building and research in marketing. European Jounral of Marketing, 22(7), pp.37-64
Reflection
The assignment helped me to get deeper theoretical notion about contingency approach to management, organizations and leadership and provided me with the chance to attempt to identify real company’s approach to management and leadership. Not surprisingly, by the example of real corporation, I have managed to see that it uses combination of different approaches, which helps it produce innovative items and implement large-scale projects.
