Contingency/Situation Approach
The situational or contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and action those aspects that are keys to the situation at hand. Basically, it is the approach that “it depends”. For example, if one is leading troops in Iraq, an autocratic style is probably best. If one is leading a hospital or University, a more participative and facilitative leadership style is probably best. When a subsystem in an organization behaves in response to another system or subsystem, we say that response is contingent on environment. Hence a contingency approach is an approach where the behaviours of one sub unit is dependent on its environmental relationship to other units or sub units that have control over the consequences desired by that sub unit.
Implications:
- Management is entirely situational and there is nothing like universal principles of management.
- The approach suggests suitable alternatives for those managerial actions which are generally contingent upon external and internal environment.
- This approach suggests that since organization interacts with its environment, neither the organization nor any of its subsystems is free to take absolute action.
