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Contingency theory

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

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  1. Contingency theory SoS Liu Spring 2014 Per Åman

  2. The price – performance trade-off Per Åman

  3. 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

  4. 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

  5. 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

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  10. Fit, alignment, congruency, consistency Infrastructure HRM Technology Procurement Inbound logistics After sales service Operations Outbound logistics Marketing and sales Per Åman

  11. 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

  12. The early strategy/ control paradigm Environment – Strategy - Structure Analysis – Formulation - Implementation Contingency – congruency – consistency (external and internal fit) Efficiency and effectiveness Per Åman

  13. 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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