The contingency approach to management emerged from the real life experience of managers who found that no single approach worked consistently in every situation. The basic idea of this approach is that number management technique or theory is appropriate in all situations. The main determinants of a contingency are related to the external and internal environment of an organisation.
The process, quantitative, behavioural, and systems approaches to management did not integrate the environment. The often assumed that their concepts and techniques have universal applicability. For example the process theorists often assumes that strategic planning applies to all situations; the quantitative experts generally feel that linear programming can be used under all conditions; the behavioural theorist usually advocates participative goal setting for all superior-subordinate pairs; and the system advocates tend to emphasize the need for computerized information flows in all situations. On the other hand practicing managers find out that a particular concept or technique from the various approached just does not work effectively in various situations. The theorists accuse practitioners of not applying the technique properly, and the practitioners accuse the theorists of being unrealistic. The contingency approach does incorporate the environment and attempts to bridge this existing theory-practice gap.
Contingency approach advocates that managerial actions and organisational design must be appropriate to the given situation and a particular action is valid only under certain conditions. There is no one best approach to management and it all depends on the situation. In other words, managerial action is contingent upon external environment. There is no one best approach for all situations. What a manager does depends upon a given situation and there is an active inter-relationship between the variables in a situation and the managerial action. Contingency theory attempts to analyse and understand these interrelationships with a view towards taking the specific managerial actions necessary to deal with the issue. This approach is both analytical and situational, with the purpose of developing a practical answer to the question at hand.
There are three major elements of the overall conceptual framework for contingency management; the environment, management concepts and techniques and the contingent relationship between them.
Features of contingency approach:
- Management is externally situational: the conditions of the situation will determine which techniques and control system should be designed to fit the particular situation.
- Management is entirely situational.
- There is no best way of doing anything.
- One needs to adapt himself to the circumstances.
- It is a kind of “if” “then” approach.
- It is a practically suited.
- Management policies and procedures should respond to environment.
- Managers should understand that there is no best way of managing. It dispels the universal validity of principles.
Superiority of contingency approach:
Clear-cut emergence of contingency approach was noticed after the popularization of systems approach. The contingency theorists accept open adaptive nature of the organisation and the interdependency between various sub-systems of the organisation. But they have pointed out that the systems approach does not adequately spell out the precise relationship between organisation and its environment. It is too abstract and difficult to apply in practice. They have tried to modify and operationalise the system framework.
The systems approach to management takes a broader view of organisational variables and employs a comprehensive model of human beings. It takes into account the full range of human needs and motives. On the other hand, contingency approach is concerned mainly with the structural adaptation of organisation to the task environment. But both these viewpoints are not mutually exclusive. They should be treated as complementary to each other. The manager should use systems and other approaches under the framework of contingency approach.