CONTINGENCY PLAN

Contingency Plan

Contingency Plan

Introduction

Fayol and Taylor have been working to find the best possible design and plan for the management of an organization. They proposed a change in the management practices according to the requirements of an organization, and the problems it may be facing. In this regard, different models could be applied for the effective management of the organization. Hence, optimal organizational structure is dependent upon various external factors. It is the contingent approach or the situational approach.

Explanation

Studies focus on various contextual factors by studying the influence in empirical studies. Joan in 1958 worked on the problems and complexities of production technology while Schoenherr and Blau in 1971, worked on the impact of size of an organization on its importance. Lawrence and Lorsch in 1967 studied the impact of the economic environment, technological change and competition on the performance of an organization.

British Researchers at the University of Aston studied various factors and conducted a comparative analysis of the organizational structure. They took 30 organizations, with variable including geography, technology and size of the company, to assess the performance of the company. They study aims to learn the relationship between different variables considered for the study. Formalization and specialization have a direct relation to the size of the company. Later considering the importance of the study, John Child joined the study and added variables describing the behavior and structure of organizational members and its performance. Moreover, these variables are the most important for the efficient performance of the company. The study was so important that many countries followed the study and adopted it for a better use.

The study gave main conclusions, and depicted the importance of formal structures on defining the roles of organization members. The structure also leads to a certain behavior of the organization members. The performance of the company is heavily dependent upon the degree of formality in the structure of organization, and the clarity of member's role. It is also heavily dependent on organization's ability to adopt changing requirements and conditions of the environment. For instance, in a high tech industry with fierce competition, decisions about new products and marketing strategies must be taken in accordance with the market requirements. A company with a high degree of specialization, centralization and formalization, would not fit to the requirements of such a situation. It will allow organizations to perform in a more flexible way.

Comparative analysis uses for a multilevel quantitative analysis assigning data to the level of the context, the organization and its members. Data is collected by distributing questionnaires to several members of the organization.

The study gave extensive insight about distinct variables, but the correlation between the variables was not very high, and it did not show a clear cut pattern. Kieser and Kubicek also considered factors such as strategic aspects of top management and management philosophy keeping in view the broader social cultural context. However, introduction of correlation did not increase the level of correlations. It shows that the organizational structure depends on too many aspects and ...