Year 1967
Crucial Message of Contingency theory
³
There is no one best way to organizeµ
Contingency TheoryContingency Theory
T
he idea that the organizational structures andcontrol systems manager choose depend on²are contingenton²characteristics of the external environment in which theorganization operates.Assumes there is no one best way to manage.
T
he environment impacts the firm and managers must beflexible to react to environmental changes.In rapidly changing organizational environments, managers mustfind ways to coordinate different departments to respond quicklyand effectively.
Four Important Ideas of Contingency Theory
1
.
T
here is no universal or one best way to manage.2.
T
he design of an organization and its subsystems must µfit¶ with theenvironment.3.Effective organization not only have a proper µfit¶ with the environmentbut also between its subsystems.4.
T
he needs of an organization are better satisfied when it is properlydesigned and the management style is appropriate both to the tasksundertaken and the nature of the work group.
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