The Contingency Approach

The well known international economist Charles Kindleberger was fond of telling his students at MIT that the answer to any really engrossing question in economics is: It depends. The task of the economist, Kindleberger would continue is to specify upon it depends and in what ways.

It depends in an appropriate response to the important questions in management as well. Management theory attempts to determine the predictable relationships between situations, actions and outcomes. So it is not surprising that a recent approach seeks to integrate the various schools of management though by focusing on the interdependence of the many factors involved in the managerial situation.

The contingency approach (sometimes called the situational approach) was developed by managers, consultants, and researchers who tired to apply the concepts of the major schools to real life situations. When methods highly effective in one situation failed to work in other situations, they sought an explanation. Why, for example, did an organizational development program work brilliantly in one situation and fall miserably in another? Advocates of the contingency approach had a logical answer to all such questions: Results differ because situations differ, a technique that works in one case will not necessarily work in all cases.

According to the contingency approach, the manager’s task is to identify which techniques will, in particular situation, under particular circumstances and at a particular time, best contribute to the attainment of management goals. Where workers need to be encouraged to increase productivity, for example the classical theorist may prescribe a new work simplification scheme. The behavioral scientist may instead seek to create a psychologically mutating climate and recommend some approach like job enrichment – the combination of tasks that are different in scope and responsibility, and allow the workers greater autonomy in making decisions. But the manager trained in the contingency approach will ask, Which method will work best here? If the workers are unskilled and training opportunities a resources are limited work simplification would be the best solution. However, with skilled workers driven by pride in their abilities, a job-enrichment program might be more effective. The contingency approach represents an important turn in modern management theory, because it portrays each set of organizational relationships in its unique circumstances.

For example, when managers at Taco bell addressed the question of what would work best for its restaurants they redefined business based on the simple premise that customers value food service and the physical appearance of the restaurant. To implement the new customers focused goals, the company recruited new managers who were committed to creating or delivering goods that customer value and who could coach and support staff in the new direction. To concentrate on customers, Taco Bell outsourced much of the assembly-line food preparation, such as shredding lettuce, allowing employees to focus on customers. As a result it has enjoyed a 60 percent growth in sales at company owned stores. Other fast food restaurants might base their business on different situational factors, by the contingency view.

Entering an era of Dynamic engagements:

All of the preceding theories have come down to us in the late twentieth century world of organizations and management. Here they are practiced against a backdrop of rapid change and profound rethinking about how management and organization will evolve in the next century. At the heart of this rethinking which is really occurring in numerous ways at the same time are new ways of thinking about relationship and time.

As boundaries between cultures and nations are blurred and new communications technology makes it possible to think of the world as a global village the scope of notational and intercultural relationships is rapidly expanding. The pace of organizational activity picks up dramatically. These trends indicate a heightened level of intensity in organization and management today.

To emphasizes the intensity of modern organizational relationship and the intensity of time pressures that given these relationship we call this flurry to new management theory the dynamic engagement approach. Dynamic engagement is our term. In times when theories are changing, it is often true that the last thing that happens is that someone assigns a name to the new theory. We use dynamic engagement to convey the mood of current thinking and debate about management and organizations. It is quite likely that twenty years from now well into your organizational lives, you will look back and call this period of movement by some other name.