What is the Contingency Approach?
A theory which focuses on organisational structures and systems that are contingent on the current organisational environment.
During the 1960s, management theory and research began to adopt a new orientation, one that embodied a remarkably simple concept and enabled significant advancements in the study of management and organisations. This orientation, now referred to as the contingency approach, emphasises the importance of situational influences on the management of organisations and questions the existence of a single, best way to manage or organise. Today, the contingency approach dominates theory and research in the management literature.
Contingency approaches are positioned within management as mid-range theories between the two extreme views which state either that universal principles of organisation and management exist or that each organisation is unique and each situation must be analysed separately. The contingency approach entails identifying commonly recurring settings and observing how different structures, strategies and behavioural processes fare in each setting. Prominent contingency theories have been proposed and tested relating to organisational environments, characteristics and structures competitive conditions and organisational strategies and organisational characteristics and behavioural processes In addition to explicit use by many authors, the contingency approach has been an underlying theme for theory building and research throughout the management literature. The contingency approach to theory building and research can be useful to marketing scholars in at least two important ways. First, the management literature offers a variety of established contingency frameworks which may contribute directly to the development and content of marketing theory. At least three sub-disciplines within management — organisation theory, strategic management and organisational behaviour — provide contingency theories with potential value for marketers. In addition, several existing contingency theories have extensive research traditions which may represent an empirical foundation for research in related marketing area . Second, consistent with recent appeals in the marketing literature the contingency approach offers an alternative technique for generating marketing theory. Although situational factors (e.g. the stage of the product life cycle) have been recognised in certain areas of marketing theory and practice, they have not generally been included as primary concepts in theoretical frameworks. Through the contingency perspective, marketing concepts and variables may be systematically related both in theory and research. The perspective should provide marketers with another avenue to pursue problems and issues that are unique to the marketing discipline. The purposes of this article, therefore, are to describe the contingency approach and to demonstrate its value for marketing. Specific objectives are:
(1) to delineate the contingency approach to theory development.
(2) to outline several established contingency theories within the management discipline and highlight the research they have stimulated on related topics in marketing.
(3) to provide an assessment of the current state of the contingency approach in marketing literature,
(4) to review the major issues associated with use of the contingency approach.
What are the advantages of the Contingency Approach?
The Contengency theory tends to acknowledges the business environment (drawing from Scientific and Behavioural Management)
. Recognises multiple methods/approaches to manage an organisation (not just one best way)
. Versatile business structure- can be changed to suit the organisation and changes in the industry
What are the disadvantages of the Contingency Approach?
1. Constant changes to environment/structure of the organisation- challenging for management2. Difficult to accurately choose the most suitable contingency approach/plan3. No clear procedure/guidelines to follow- dependent on business