Contingency theory proposes that there is no single best way to organize or lead an organization, and that the optimal approach depends on internal and external situational factors. Key points of contingency theory include: 1) different leadership styles are appropriate for different situations; 2) organizations perform best when their structure fits both the environment and the needs of its members; and 3) managers must analyze each unique situation to determine the most effective approach. Contingency theory rejects the notion that universal management principles can be applied in all cases.

1. CONTINGENCY THEORY
ARUN NAIK
IST YR MBA

2.  “no one best way to do things”

3.  (Fiedler, 1964). there is no one best way of
organizing / leading and that an
organizational / leadership style that is
effective in some situations may not be
successful in others.
 The optimal organization / leadership style is
contingent upon various internal and external
constraints.

4. William Richard Scott
"The best way to organize depends on the
nature of the environment to which the
organization must relate".

5. important ideas of
Contingency Theory

6.  There is no universal or one best
way to manage
 Wide range of external and internal
factors must be considered and the
focus should be on the action that
best fits the given situation

7.  Effective organizations not only
have a proper 'fit' with the
environment but also between its
subsystems

8.  The needs of an organization are better
satisfied when it is properly designed and
the management style is appropriate both
to the tasks undertaken and the nature of
the work group.
 Each managers situation must be viewed
separately

9.  Managers need to be developed in skills that
are most useful in identifying the important
situational factors.

10. PROPERTIES

11.  Theory is practical and it is equally important
for every organization
 Theory doesn't believe in 'one best way' so
many methods and principles may be used in
 Every situation is unique so manager HAS TO
be able to analyze each and every situation
INDIVIDUALLY.

12.  “an authoritarian leadership style
may be more appropriate than a
leadership style that tries to get
workers internally motivated.”

13.  Applied in activities of motivating, leading
and structuring the organisation.
 The other potentials of application are;
A. employee development and training
B. Decision of decentralization
C. Establishment of communication and
control systems
D. Planning info decision systems

14. CRITICISMS…

15.  the logical extension of the contingency
approach is that all situations are unique. If
this is true, then management can be
practiced only by intuition and
judgment, thereby negating the value of prior
knowledge and wisdom.

16.  On research level, contingency theory has
been criticized for being atheoretical

17. EFFECT ON A MANAGER

18.  By applying contingency theory to the study of
management, you will be able to identify and to
solve problems under different situations.
 You will recognize that the successful application
of a technique in one situation does not
guarantee success in another.
 Rather, you will be able to examine each
situation in terms of how it is affected by the
contextual, organizational, and human
dimensions.
 As a result, your overall ability to correct
problems and to become more effective as a
manager will increase.

19. STORY OF A SHOE MAKER

20.  . A shoe manufacturer is faced with
decreasing profits
 As a manager - time study from the belief
that the decline in profits is due to lower
productivity on the part of the workers
(classical management theory).

21.  may attempt to involve workers more fully in
decisions concerning the methods to use in
producing the shoes based on the premise
that this will motivate workers to produce
more
( Behavioural management
theory) .

22.  may establish a committee of sales and
production personnel to coordinate the
production and distribution of goods under
the assumption that large inventories are
responsible for the decline in profits
(systems theory).

23.  Application of a contingency
perspective
 will enable the manager to examine
the situation and to determine the cause of
decreased profits before a new procedure or
program is implemented.

24.  Contingency theory is designed to provide
the manager with the capabilities to examine
numerous possible solutions to a problem

25. Thank you