Contingency theory.docx

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Contingency TheoryThe most noted application and extension of the open systems approach is grouped under the heading of contingency theory Eventually the theoretical developments taking place within the systems tradition culminated in a contingency theory of organisation which attempted to specify the appropriate functional fit between environmental settings and the internal organisational structures which they requiredCuriously as a theory it rested primarily on research that took place largely prior to its own development The most noted such work was that of Burns and Stalker 1961 who studied twenty firms in Scotland and England drawn mainly from the textile engineering and electronics industriesManagement systems and structures were classified according to a range of environments differentiated by degree of predictability and stability They found that firms operating in an environment with relatively stable and predictable markets and to a lesser extent technologies such as those in textiles tended to have what they called mechanistic systems This broadly resembled bureaucratic models where there is centralised knowledge clear hierarchy task specialisation vertical communication and a general emphasis on formal structures decisionmaking values and rules By contrast in environments where there is more rapid change uncertain markets and complex technologies with a requirement for constant innovation such as in electronics a more organic system predominated which was less bound by traditional structures and roles Instead though structures remained within a general hierarchy they utilised dispersed information centres lateral communication meritocratic and expert positioning ethos and practices and more flexible tasks and rules
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