The paper 'Rationale for Use of Contingency Management Approach " is a great example of management coursework. The contingent management approach is founded on the assertion that there is no single best style of management in an environment where there are unpredictable internal and external factors impacting an organization. As argued by Harte (2014), hugely successful businesses such as Apple, Toyota, Microsoft, Samsung, Coca-Cola, IBM and Nokia owe their success to strong and effective leadership. Notably, it is only fair to contend that such businesses do not follow a standard blueprint that guides their strategic focus or leadership.
It is generally held that the contingency management approach is the best method in business operations in today’ s dynamic and rapidly changing environment. New competitors enter an industry with disruptive products, governments change regulations, consumers change preferences, and technologies become obsolete. Therefore, every business has to apply a unique strategy and adapt a particular style of leadership in response to challenges and opportunities within its internal and external environments. Clearly, it is valid to argue that the dynamic and unpredictable nature of the external and internal organizational environments calls for a contingent management approach to enhancing effectiveness.
Through respective subheadings, this paper will critically analyse the rationale for and against the adoption of a contingent management approach in business with a view of supporting the relevance of the concept in organisational strategic planning. Arguments for use of contingency approach in the management The contingency management approach gained strong relevance from the 1950s up to the 21st century due to the socio-political, technological and economic changes that impacted businesses at this particular period. For instance, the 1950s were characterized by sustained industrial agitations for better working conditions.
Businesses were also exposed to increased competition as global trade grew. Disruptive technologies also improved communication, production methodologies and commerce. This meant that businesses had to employ situational strategies to be successful in uncertain and unpredictable environments. According to Zeithaml, et al (1988), the contingency approach is a highly pragmatic approach to solving problems as they emerge. New regulations, competition and natural factors often affect the operations of a business or the ability of the business to fulfil the needs of its clientele.
A contingent approach demands that organizational people at various levels must quickly analyse the situation and come up with an appropriate decision. This means that the organization does not have a rigid structure where decisions are made from the top while the subordinates wait for instructions. Such an approach may have a negative effect on the competitiveness of a firm at the business level. For instance, a new competitor to a multinational may be offering products in small quantities to sell at a lower price, the management at the top must respond quickly to the threat on its market share by adopting a packaging and pricing strategy that appeals to the specific market. Contingency approach integrates various schools of thought on management including the systems and classical ideas.
This means that management and practitioners can explore various approaches that are suitable for a business in different situations. In support of Pertusa-Ortega, et al (2010), Jayaram, (2014) further observe that the principles of the different schools can be integrated and applied successfully to unique situations to enhance organizational effectiveness. For example, a small business at the start-up stage may adopt a centralized management style where the founding manager makes all the crucial decisions.
Mostly in such situations, the entrepreneur is the vision bearer who understands the business idea and the strategies to be applied to achieve success. Big organizations may have complex operations that require robust decisions making at different levels and units. Decentralization may be a better option for such big businesses. In addition to combining various schools of thought, a contingency approach allows organizational management to apply lessons learnt from previous failures or success in relation to challenges and opportunities facing the business.