Management

By outlining in some detail a piece of structural contingency research evaluate the contributions of this general approach to s

The report will discuss the theory in detail and how it affects the performance of an organisation. The report will also discuss the change on the organisation due to the various contingency variables. The contingency cycle, which changes an organisation from fit to misfit, and then again brings it back to fit though organisation structuring, is explained with examples. Discussion Till the late 1950s, school of classical management dominated the organisational structure. According to this school of thought, one single organisational strategy was effective for all kinds of organisational structure. It was categorised by high degree of planning and decision making. There was a strict hierarchy in this structure and the job responsibilities were well detailed to the lower level staff in advance, by the senior management. From 1930 onwards, this school of thought was challenged extensively by the new school of thought, known as school of human relations. According to this approach, individual employees possessed social and psychological needs. Bottom-up approach was followed here and the lower level departments were increasingly motivated to participate in the decision making processes of the organisation. Many researchers and theorists such as J. W. Lorsch and P.R. Lawrence, (1978) suggested that firms which operated in less stable environments were found to be operating more effectively. Less formalization of the organisation leads to more reliance on mutual agreement between the various departments of the organisation. On the other hand, in case of companies operating in a certain and more stable environment, effective functioning was recognised only when the firm was more formalized, decision making was centralised and there was less reliance on the mutual agreement between different departments. There are many theories of contingency approached. But the most accepted and popular ones are those which are related to leadership, management or organisational structure (Tuai, 2011). According to the overall approach of this, whatever happens in a firm depends upon particular circumstances or factors. In general, when whole or parts of an organisation fits together, they are referred to as organisational structure. More specifically, structures include factors such as complexity, formalization and centralisation (Martinez-Leon and Martinez-Garcia, 2011). The dimensions of complexity can be categorised as, spatial, vertical and horizontal. In case of formalisation, the options for individuals are little. There is a higher vertical differentiation where a manager’s work is defined by other senior manager and the senior manager’s work is defined by other managers. This results in division of labour and decrease in discretion. It is different than spatial differentiation because in spatial differentiation, there are organisation wide procedures that limit the discretion. Examples of higher formalisation are bank call centres, supermarkets. Examples for lower formalisation include lawyers, doctors, academics and that formalisation which are associated with skill. Centralisation refers to the extent of decision making, authority and power. Centralisation is inversely correlated with complexity because increase in complexity reduces the central power by distributing these powers through hierarchies and functions. Centralization is weakly correlated to

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