Contigency Theory

During 1950 and 1960, some small group decision making developed the idea of contingency theory. At the end of 1950s, academic schools began to utilize the contingency idea into organization theory. The term “contingency theory was created, it challenged the traditional management notion: finding the one best way to organize. Together with special and united notion of subsystems, the contingency theory drew theorists’ attention and obtain acceptance. Then more and more researchers took part in studying this effective problem solving approach.
Organic form and environment are imperative factors supporting the organization evolves. This is the root of contingency theory. Lots of problem emerged when scientist and researchers tried to design a universal form for managers to administrate the organization. Due to different internal condition and external environment, one approach is working upon one system does not mean it can have effect in another system. Hence, contingency theory appears with the core idea “there is no one best way ”. Each organization constitutes the organizational designs based on its own environment. Efficiency can be achieved when an organization adapt well to the subsystems and environment. That is the more organization constructs structure appropriately and meet throughout demands, the more organization’s members feel satisfied. To apply contingency theory aims at distinguishing as many relative internal and external variables as possible.

In 1967, Paul Lawrence and Jay Lorsch from Harvard University led a study and obtained two main perspectives: 1. Different sorts of organizations have to take order with diverse market condition and technological issue. 2. Precarious circumstance cause organizations carry on a higher extent of internal differentiation then those which are in the less complicate and more steady environment. The conclusion improved contingency approach that, organizational styles may alter among organizational subunits as