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KEY IDEAS:

1) contingency theory has provided coherent paradigm analysis of the structure of


organizations.
2) Theory sets that structure is optimal as varying according to the main factors such
as strategy, size, task uncertainty and technology.
3) Organization needs to fit its structure to the environment in which the
organization is located.
4) Theory argued that more codified the knowledge used in the organization and the
fewer the exceptions encountered in operations, the more the organization could
be centralized.
5) Theory also argues that the level of production and operation technology
influence the choice of structure.
6) Environmental innovation leads the organization to raise its rate of intended
innovation.
7) Administration is broken into specializations each handled by distinct staff roles
such as accounting, production, planning, records and so on.

ASSUMPTION:
Core assumption of structural contingency theory is that low uncertainty tasks are most
effectively performed by centralized hierarchy since this is simple, quick and allows
close coordination cheaply.

FOCUS:
Structural contingency theory focuses on only certain couplings of contingency and
structural factors i.e: size and bureaucracy or strategy and structure. The theory claims
that there cannot be any single organizational structure that can assure organizational
effectiveness. Structure depends on certain characteristics of the organizations called
“contingency factor” such as strategy, size, task uncertainty and technology. These
factors are influenced by elements such as industry, govt, competitors, society which are
located outside organizations according to this theory, organization can only be effective
if they can fit their structure to the contingency factors and thus to the environment.

PREVIOUS THEORIES:
Before the contingency theory, organization studies were dominated by classical
management school which had searched for an organizational structure that could be
suitable and effective for all sort of organizations. However in 1930’s on, human
relations school started to challenge this classical understanding and hence organization
studies began to shift towards the human aspect of organization.
Finally by combining and adopting superior parts of these two approaches, contingency
theory was developed in the late 1950’s.
DEBATE:

POTENTIONAL AREAS OF RESEARCH:


Research and studies conducted based on structural contingency theory draw upon these
concepts with some variations, like effects of globalization, corporate strategy,
organizational goals, product life-cycle and so on.

CRITICISM:
Although the theory seems very stronger in 1960’s, new developments and studies in all
disciplines started to challenge structural contingency theory and its assumptions. These
criticisms focused on three problematic areas:
1) structure is assumed to be adjusting only to the material factors such as size and
technology.
2) Decision makers, mostly top managers are not taken into account.
3) There are some doubts whether the result will be valid in different countries at
different times.
As a result of such criticism new approaches have been emerged for the explanation of
organizational structure.