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Contingency theory
SoS LiuSpring 2014Per Åman
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The price – performance trade-off
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Fit and adaptation – structure and process
“It is not the strongest of the species that survive, nor the most intelligent, but the one that is most responsive to change”
Charles Darwin
Two qualities: Structural fit – ability to adapt
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Contingent upon what?
But: Strategies are contingent/ dependent upon their context
Organizations are purposeful entities
Success is dependent upon 1. formulation of purpose (objective) 2. and delivery of the purpose (implementation)
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The search for ‘contingency factors’
Task environment?
1. Environmental uncertaintyStable (little change) – unstable (dynamic, fast changing)
‘Turbulence levels’ (Ansoff 1967), Burns and Stalker (1961)
Moderately dynamic – highly dynamic (Eisenhart, 1995, 2000)
What determines strategy and structure?
2. Technology - Diversity of task environments
3. Size
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Environment Stable Dynamic
Technology Process Unit
Size Large Small
Mechanistic ! ?
Organic ? !
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Mechanistic: Organic:
Specialization of tasks Job and task flexibility
Defined duties, responsibilities Redefinition of tasks
Clear hierarchical structure Network structure of control & authority
Top down instructions and info Lateral info and advice
Obedience to org’n and rules Committment to work group
Importance by position Importance by individual’s contribution
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Fit, alignment, congruency, consistency
Inboundlogistics
Operations Outbound logistics
Marketing andsales
After salesservice
Infrastructure
Procurement
Technology
HRM
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Contingency theory, summary
• Organizations are open systems• Structure, and therefore performance, is dependent upon the particular
circumstances, situational factors, faced by each organization• There is no best way for all organizations but there is a one best way for
each organization
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The early strategy/ control paradigm
Environment – Strategy - Structure
Analysis – Formulation - Implementation
Contingency – congruency – consistency (external and internal fit)
Efficiency and effectiveness
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A reflection on the early theories/ propositions
A teleological perspective
A machine metaphor
A utilitarian perspective – Darwin/2
A structural perspective – Darwin/2