What Is Contingency Analysis?

Contingency theory of management is a management theory formed in the United States in the 1970s. The core of this theory is to try to study the interrelationships between the subsystems of the organization and between the subsystems, and the relationship between the organization and its environment, and determine the type of relationship and structure of this variable. It emphasizes that in the management, it is necessary to randomly change according to the internal and external conditions of the organization, and to seek different and most suitable management modes, schemes or methods for different specific conditions.

Contingency Management Theory

organizational structure

(1) Critically summarize and inherit the legacy of previous management theories, and unify them into management theories with new management thinking.

(2) Challenges to "universalism", emphasizing management dynamics, that is, different specific conditions should adopt different

In 1976, "Introduction to Management: A Kind of Contingency," published by Professor F. Luthans of the University of Nibragas in the United States, systematically summarized contingent management theory. he thinks:

1. The past management theories can be divided into four types: process theory, metrology theory, behavior theory and system theory. These theories do not properly connect management with the environment, and their management concepts and technologies are disconnected in theory and practice. Therefore, management cannot be carried out effectively. Contingency theory is to embody the role of the environment in management, and to integrate management theory with management practice.

2. Contingency management theory is to consider the relationship between the variables of the environment and the corresponding management concepts and technologies, so that the management concepts and technologies adopted can effectively achieve the goals.

3. The functional relationship between environment variables and management variables is the contingency relationship, which is the core content of contingency management. The environment can be divided into external environment and internal environment, and the external environment can be divided into two types: one is social, technical, economic and legal politics (STELP analysis), and the other is by suppliers, customers, competitors, Employees and shareholders. The internal environment is basically a formal organization system, and its variables are related to external environment variables.

Contingency theory provides a very useful perspective for people to analyze and deal with various management issues. It requires managers to flexibly deal with various specific management businesses in accordance with the external environment that the organization's specific conditions are facing, and adopt corresponding organizational structures, leadership styles and management methods. In this way, managers can shift their energies to the study of the actual situation and put forward corresponding management countermeasures based on the analysis of the specific situation, so that it is possible to make their management activities more consistent with the actual situation and more effective. At the same time, the contingency school has given people a new understanding of the dynamic nature of management. In the past, most people have come to understand management behavior from a static perspective. The shortcomings of contingency theory are that it does not propose a unified concept and standard, fails to form universal management functions, and makes managers who are engaged in practical work feel difficult to grasp.