CONTINGENCY APPROACH

Juan Salazar
Escuela de Administración
 CONTINGENCY APPROACH
There is a need for a theoretical framework for management, not just another approach

Technology Environment

Organization

Organizational Organizational
Structure Behavior
 A theoretical framework
One that can achieve the following goals:
– Integrate and synthesize diverse process quantitative and behavioral concepts into an
interrelated theoretical system

– Functionally incorporate the systems perspective to organization and management, specific

functional relationships between situational factors, management concepts and applications
and organizational performance

– Provide a pragmatic basis for analyzing and interpreting the existing body of management
knowledge and empirical research, thereby facilitating understanding, prediction and
control.
 A theoretical framework
– A framework for coordinated direction of new research on the complex functional
relationships between management and situational variables.

– Establish a mechanism for effectively translating theoretical constructs and the results of
empirical research into management information and application techniques that are
relevant and useful for the practitioner
 The Contingency Approach
• The contingency approach is generically situational in orientation, but much more exacting and
rigorous. (Than the systems approach)

• The Contingency approach is defined as identifying and developing functional relationships

between environmental, management and performance variables.

• Classification models are based directly or indirectly on the organization´s environmental

suprasystem.
 The Primary System Variables

• Environmental Variables
Factors that affect the organization, but are beyond the direct control of the organizations managers.
Internal Environment out of the direct control of the manager but are within the control of the
formal organization.
External Environment Federal Legislation
• Resource Variables
• Management Variables
 The Primary System Variables

• Environmental Variables
• Resource Variables
These are tangible or intangible factors over which management has more direct control on which
operates to produce desired changes in the organizational system or its environmental suprasystem
• Management Variables
 The Primary System Variables

• Environmental Variables
• Resource Variables
• Management Variables
Decision making processes affecting the allocation or utilization of available resources.
 The Secondary System Variables

• Situation Criteria
The set of variables defined by the interaction between environmental and resource variables
• Organizational Criteria
The variables that part from the interaction between management and resources variables.
(Structure)
• Performance Criteria
Relation between environmental and management variables
--The critical product of this intersection is a set of performance criteria variables relevant to the
particular organizational system.
 The Tertiary System Variables

The tertiary system variables are generated by the interaction of secondary variables and system
variables ( Primary Variables)

The product of this interaction is defined as the System Performance Variables, which represent the
actual performance output of the organization as measured by relevant performance criteria
variables.
 Relationship between primary,
secondary and tertiary variables
 A Contingency approach to
managing planned change

Contingency Audit
• Identify through the diagnostic techniques the current state of the system
• Identify those system performance criteria
Develop the strategy for Planned Change
• Determine the most effective change strategy
Implement the Change Strategy
• Evaluate the results of the change intervention
• Determine if management/situational variables have changed to the intended outcomes
• Determine if the results match the predictions
A Contingency approach to
managing planned change
Functions of Management