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Contingency theory. SoS Liu Spring 2014 Per Åman. The price – performance trade-off. Fit and adaptation – structure and process. “It is not the strongest o f the species that survive, nor the most intelligent, but the one that is most responsive to change” Charles Darwin.

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Contingency theory

Contingency theory

SoS Liu

Spring 2014

Per Åman



Fit and adaptation structure and process
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

Per Åman


Organizations are purposeful entities

Success is dependent upon

1. formulation of purpose (objective)

2. and delivery of the purpose (implementation)

But:

Strategies are contingent/ dependent upon their context

Contingent upon what?

Per Åman


The search for contingency factors
The search for ‘contingency factors’

What determines strategy and structure?

Task environment?

Environmental uncertainty

Stable (little change) – unstable (dynamic, fast changing)

‘Turbulence levels’ (Ansoff 1967), Burns and Stalker (1961)

Moderately dynamic – highly dynamic (Eisenhart, 1995, 2000)

2. Technology - Diversity of task environments

3. Size

Per Åman






Fit alignment congruency consistency
Fit, alignment, congruency, consistency

Infrastructure

HRM

Technology

Procurement

Inbound

logistics

After sales

service

Operations

Outbound

logistics

Marketing and

sales

Per Åman


Contingency theory summary
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

Per Åman


The early strategy control paradigm
The early strategy/ control paradigm

Environment – Strategy - Structure

Analysis – Formulation - Implementation

Contingency – congruency – consistency (external and internal fit)

Efficiency and effectiveness

Per Åman


A reflection on the early theories propositions
A reflection on the early theories/ propositions

A teleological perspective

A machine metaphor

A utilitarian perspective – Darwin/2

A structural perspective – Darwin/2

Per Åman


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