Contingency Approach
Contingency Approach
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An approach to management that recognises the necessity of flexibility. This approach to management advocates for managers to apply whatever strategies are required for each unique situation. There is no one theory; just a bundle of managerial tools.
Features of Contingency Style:
The demands of managing a firm are very high; the internal and external business environments are in continual flux. As environments change, managers need to apply a whole range of tools to deal with various situations. Contingency Management stresses the need for flexibility and adaptability in response to unpredictable changes affecting a firm. No two situations are the same; a formula will not work. Each situation requires its own unique solution.
Modern firms typically:
Have flatter structures (less levels of authority)
Fluid communication systems
Team-based structures (agile / fast responding)
High degree of autonomy for divisions
The modern manager:
Faces an unpredictable business environment
Must deal with an increasing rate of change
Has to solve problems with limited information and limited time
Has limited experience in dealing with new problems arising from digital technologies
Cannot know the future consequences of their decisions and actions (everything is a risk)
Why it works:
Each situation is unique. Contingency Management as an approach does not advocate for anything specific; rather, it is an acceptance that there is no one solution or formula for all situations. Flexibility and adaptability are essential skills for modern managers.
Limitations:
A manager cannot ‘learn’ contingency management. There is no textbook responses to situations. A manager with limited experience may not know the full range of tools at their disposal to each situation. It can also create a sense of unease / insecurity for the inexperienced manager.
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