Contingency theory SoS Liu Spring 2014 Per Åman 2

The price – performance trade-off Per Åman3

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 Åman4

Contingent upon what? But: Strategies are contingent/ dependent upon their context Organizations are purposeful entities Success is dependent upon 1. formulation of purpose (objective) 2. and delivery of the purpose (implementation) Per Åman5

The search for ‘contingency factors’ Task environment? 1.Environmental uncertainty Stable (little change) – unstable (dynamic, fast changing) ‘Turbulence levels’ (Ansoff 1967), Burns and Stalker (1961) Moderately dynamic – highly dynamic (Eisenhart, 1995, 2000) Per Åman6 What determines strategy and structure?What determines strategy and structure? 2. Technology - Diversity of task environments 3. Size

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Per Åman Fit, alignment, congruency, consistency Inbound logistics OperationsOutbound logistics Marketing and sales After sales service Infrastructure Procurement Technology HRM

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 Åman12

The early strategy/ control paradigm Environment – Strategy - Structure Analysis – Formulation - Implementation Contingency – congruency – consistency (external and internal fit) Efficiency and effectiveness Per Åman13

A reflection on the early theories/ propositions A teleological perspective A machine metaphor A utilitarian perspective – Darwin/2 A structural perspective – Darwin/2 Per Åman14