Contingency Theory

1102 Words5 Pages
Contingency Theory “Contingency theory is a class of behavioral theory claiming that there is no best way to organize a corporation, lead a company, or make decisions” (Pfeffer, 1997). There is no simple or one right way to run things. In the 1950’s and 1960’s, two men named Henri Fayrol and Frederick Taylor continued the study of contingency theory. Research in the 1970’s dealt with the organizational structures and leadership styles for different situations (Thompson, 2005). Contingency theory was started by Joan Woodward, whose company research found that different types of processes were linked to different structures and amounts of control. She said that certain organizational forms are appropriate for certain forms of work. Woodward was a pioneer for the theory. Woodward composed several studies using differential variables such as management levels of a company, industry compressions, and management styles in her measurement (Thompson, 2005).--. From those tests, she has identified that there are three influential aspects to contingency theory: environmental, organizational, and leadership. These factors are the key components that influence the success of a business. There are three factors that affect contingency plans. The first of these key components is the environmental factor. The next factor is the organizational factor. The environment is bound to change and have an impact on how an organization is run. For example, when FedEx Express went through the September 11, 2001 situation, they boosted security throughout the hub and raised shipping prices to offset the security budget. The same can be said when the president created the new cabinet of Homeland Security to fight the 9/11 attacks. The Unit... ... middle of paper ... ...t, so each has to set its own standards. Companies are always looking for ways to make sure an operation runs continuously no matter what the obstacles are. Contingency is like a mechanist using oil to ensure that the machine runs smoothly. Doing the right thing involves a series of complex contingency plans. There is no one answer to the issue because variables are constantly changing. When the 5 Variables change, the outcomes will too. Contingency plans should always fit the moral code. Because money is a driving force in business a company needs also abide by all proper matters bookkeeping to avoid the fate of companies such as Enron, Tyco, and ACORN. I think no matter who, what, when, where, or why, each individual business has to come up with a plan that fits best for its organization to maintain its competitive edge with its industry peers.
Open Document