Contingency Theory

Importance

As the theory was introduced and developed in the 1960s and 1970s, it had two fundamental premises. The first was that a contingent approach was a superior way to understand issues of organization and leadership compared to prior theories which argued that there was one universal approach to such matters (see, for example, Henri Fayol, Lyndall Urwick, or James D. Mooney and Alan C. Reiley). Because the basic contingency idea was investigated and proposed by many different scholars investigating different leadership and organizational phenomenon, the variables identified as important were heterogeneous. This was true with respect to those that were subject to managerial or leadership choice, as well as those variables upon which such choices were contingent.

Two examples illustrate this point. First is the work of Tom Burns and G. M. Stalker. While investigating manufacturing companies in Scotland, they noted that successful firms that were facing conditions of high certainty had organizations that they characterized as mechanistic (formalized structures and procedures, which facilitated the needed routines). However, successful firms that faced conditions that were uncertain (often requiring innovation) had organizations that Burns and Stalker labeled organic (less formality of structures and processes). Thus, in their view, the key determinant of organizational form was the uncertainty the organization faced. The appropriate organizational characteristics to consider were the extent to which the organization was mechanistic or organic.

A second example is the work of Fredrick Fiedler in the United States. It was Fiedler who first used the term contingency in describing his theory of leadership. He had used an instrument he developed to study leadership of groups and group performance under a variety of conditions. The conditional factors he looked at were the simplicity or complexity [Page 145]of the task, the preexisting conditions of feelings between the group and the leader in terms of liking or disliking, and the amount of traditional power available to the leader. Without going into detail, his principal finding was that different leadership styles were more effective under different group conditions.

These are but two of the early examples of contingency theory (see Organization and Environment, chapter 8, for examples of others). This early work was rapidly followed by other studies using the basic contingency approach. For example, in the realm of leadership, there were studies by Victor Vroom and by Robert Tannenbaum and Warren H. Schmidt, which are discussed below. Similarly, the examination of contingent organizational forms was expanded by the work of Joan Woodward and James D. Thompson. To underscore the diversity of factors which these studies identified as important, Woodward focused on the contingent relationship between manufacturing technologies and organization, and Thompson focused his work on the impact that different types of interdependence among subsidiary units had on other aspects of effective organizations.

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