Contingency Theory

In this assignment I shall discuss three theories explaining structure choice; management choice, population ecology theory and contingency theory including their strengths and weaknesses. I shall outline and compare functional and team structures as they are the two greatest opposites, using sources to support or disprove statements. Comparisons will then be made between centralised and decentralised structures, commenting on how they relate to the contingencies outlined by the contingency theory whilst also taking into account related issues such as motivation and competitiveness. I shall then decide which theories I support and which structure type I feel is stronger.

There are three main theories which aim to explain which structure; functional, divisional, matrix, team or network, even possibly a mixture that will best suit a company. Firstly, the management choice theory highlights the influence of managers and the fact that they make the final decision, thus believing that management will select a structure which reflects their perspectives and needs and not those of the organisation. For example a “bureaucratic” manager, as proposed by Weber, will enforce a centralised structure incorporating strict rules and procedures paying less attention to the factors proposed by the contingency theory. However the theory does acknowledge that contingencies, outlined by the contingency theory, do limit the options available to managers.

Secondly the less mainstream population ecology theory, resembling Charles Darwin’s theory of evolution, Hannan and Freeman (1977, pp929-964) and Aldrich (1979, pp265), also partially acknowledge the contingency theory as they recognise adaptation does take place. Yet they dispute the suggestio...

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...n Systems, Englewood Cliffs, NJ: Prentice-Hall.

• Smith, A (1776) An Inquiry into the nature and Causes of the Wealth of Nations, London: Methuen and Co. Ltd. Cited in Hannagen, T. (2004) Management, 2nd edition, Gosport: Pearson Education Ltd

• Woodward, J. (1958) Management and Technology, London: HMSO

Bibliography:

• Ashby, R. (1956) An Introduction to Cybernetics, New York: John Wiley cited in Naylor, J. (2004) Management, Second edition, Gosport, Pearson Education Ltd

• Handbook of Organisational Change. Online, available at:

http://books.google.com/books?id=SEeFyb6s7mcC&pg=PA137&lpg=PA137&dq=hannan+and+freeman+1977&source=web&ots=4tiYGSi7Pu&sig=_nGWoV4tEiBEDhNlLY9dfeFZX6I (accessed on 19th February 2008)

• Strategy: Definitions and Meanings. Online, available at: http://home.att.net/~nickols/strategy_definition.htm (accessed on 17th February 2008)