Contingency Management Approach - Coursework Example

Contingency Approach Name: Institution: Contingency management approach calls for managers making use of the available resources to handle a particular circumstance. Managers who make use of contingency approach do not have any answer to situations; rather, they handle them as they arise. Contingency approach is mainly applied by managers who perceive the environment to be unpredictable and uncertain (Honig, 2004). The perception of uncertainty in business thus ensures that managers do not have pre-determined solutions to problems but instead managers exploit opportunities as they present themselves. The paper will therefore discuss the various approaches to management and make a justification of why contingency approach is best suited to handle the ever changing business environments. The contingency or situational approach to management has taken many scholars by surprise. The approach asserts that the actions taken by managers depend on certain circumstances or situations. Contingency theory takes into account how different situations should be handled and also the effect each solution has on the behavioral pattern of a business enterprise (Koontz, 1980). However, theory does not give informed decisions for each and every situation because practical situations are not predictable and can only be dealt with as they arise. A comprehensive business strategy would devise a plan and approach for every situation that is likely to be experienced by a business that is at the maturity stage of the life cycle. However, contingency approach acknowledges theory but insists that managers should be prepared for the unknown in every situation. Contingency approach highlights times when business is likely to be different from normal or when a company decides to diversify into products it did not previously produce. In such a case, a manager is faced with a situation he or she has never faced before. Contingency approach calls for managers bracing themselves for economic and technological changes. It is an undeniable fact that economic times such as inflation may affect the operations of a business while advancement in technology may also affect a business if it is not prepared to handle the changes or rather to adjust it to the current times (Hofer, 1975). Consequently, if businesses are able to develop their contingency theories and approaches, it would help them improve business operations because it would imply that their preparedness for all kinds of situations is improved (Hofer, 1975). It has been proven over time that high preparedness of the business for all circumstances highly correlates with high profitability. Contingency approach in business is basically situational oriented and aims at identifying functional relationships between the environment and the performance of a firm. As opposed to situational approach, contingency approach is much more rigorous and specific to circumstances. A business can adapt and survive in the market by making use of more than one strategy (Zeithaml, Varadarajan and Zeithaml, 1988). An organization can also make use of more than one leadership strategy and each cannot be used in place of the other because different approaches are only applicable to particular situations. Contingency approaches can only be applicable if a business is able to internalize the contingency factors with the internal organizational behavior so that they are able to handle environmental changes. Contingency approach has also been found to be effective in organizational leadership because current times call for diversity and inclusion at the work place. As such, employees and their needs are dynamic and keep on changing and leaders therefore ought to have skills to handle each situation. In the case of routine occurrences, managers can come up with structures on how to handle employees (Zeithaml, Varadarajan and Zeithaml, 1988). However, if the leaders make use of routine approaches to situations they are not applicable; the employees may end up being dissatisfied with the leadership. Another approach to management is the classical approach to management that evolved in the 19th and the beginning of the 20th century. The approach makes use of similar ideas to handle emerging situations in an organization (Sarker and Khan, 2013). With the classical approach, managers follow a certain hierarchy where division of labor has been emphasized to ensure efficiency of the firm. There are several theories that explain the classical approaches to management as discussed below. Firstly, the scientific management theory asserts that a structure should be formulated to come up with a particular way of handling a particular situation. The task to come up with a best way to handle a situation is bestowed upon the lower level management. The second theory is the administrative management theory. The theory focuses on the whole management contrary to the scientific theories that only focus on low level management. The theory focuses on the efficiency of the said firm and activities such as planning, division of work and discipline are highly observed to achieve the desired levels of efficiency. The third theory is the bureaucratic management theory developed by Max Weber. The theory upholds bureaucracy in the management where roles are clearly defined among employees in the different levels of the hierarchy. Max Weber believed that a distinction of roles enhances efficiency in businesses. Classical approaches of management however are only applicable to small firms and those that are highly organized. Managers who follow the classical approach believe that it eliminates all forms of inconsistencies in the functioning of a business (Sarker and Khan, 2013). However, classical approach is frowned upon because it cannot thrive in today’s dynamic and ever changing business environment. Today’s business world cannot be operated by use of structured approaches but rather requires each situation to be handled on its own. The other approach to management is the neoclassical approach. The approach was devised to handle the various limitations witnessed with the classical approaches of management. The approach began from the Hawthorne studies in the year 1927. The classical theories mainly concentrated on the machines used to perform tasks and the jobs themselves. Eventually, the employees were dissatisfied with the approach (Sarker and Khan, 2013). Therefore, the neoclassical approach to management concentrated on the employees. There are several theories that explain the neoclassical approaches to management. The first theory is the Hawthorne experiments that were carried out between the year 1927 and 1932 in the USA. The experiments were done by Elton Mayo and his colleagues and the experiments aimed at gaining an understanding of the individual and organizational behavior. The experiments involved an interviewing process for employees (Sarker and Khan, 2013). Sarker and Khan (2013) define the human relation movement theories aimed at understanding the interpersonal relationships among employees and how the workplace conditions determined how employees forged positive relations at the workplace. The organizational behavior theories studied the attitudes and behaviors of employees at the workplace setting. The organizational behavior theories aim at understanding how the attitudes of employees affect performance of a business (Sarker and Khan, 2013). Neoclassical approaches to management are praised for giving an understanding of human behavior at work and how human beings are a major input in any organization. Behavioral approaches to management can also be used to handle arising situations at the workplace. The theory operates on a composite-system model making use of empirical tests rather than basing decisions on insights and speculations. The behavioral management approach emphasizes on management which entails managers getting work done though other people. The approach works towards understanding factors that affect how human beings behave in organizations (Indabawa and Uba, 2014). The approach was adopted after a realization by managers that classical and neoclassical approaches were not sufficient mainly because structured ways of handling circumstances often failed. Behavioral theories aimed at finding ways to recruit employees that were best suited for a particular job by examining their psychological position. Behavioral approaches make use of controlled researches of workers and their attitudes towards certain conditions at the workplace (Indabawa and Uba, 2014). Behavioral scientists thus believe that employees have a need to grow and develop their talents while at the same time maintaining levels of self esteem. Abraham Maslow was one of the major contributors of the behavioral approach to management when he advanced a theory of employee motivation that was widely applied by managers of different organizations. Maslow identified five different needs by employees in their order of significance namely: physiological needs, safety needs, social belonging, esteem needs and self actualization needs (Indabawa and Uba, 2014). Maslow based his theory on an assumption that employees have needs that have ranks, secondly, human beings have needs that are often unmet and they therefore work towards have them satisfied. The other theory that explains about behavioral approaches to management is theory x and y by Douglas McGregor. Douglas aimed at changing the notion that employees are lazy and irresponsible. Under theory X, managers view employees as lazy, irresponsible and they dislike work and should therefore be coerced and if need be punished for them to work as expected. On the other hand, theory Y classifies employees as individuals who love work and have self-direction (Indabawa and Uba, 2014). Theory Y assumes that employees are self-motivated and that punishment is not the only approach towards achieving desired results. Behavioral approach to management therefore advocates for managers trying to understand the employees rather than concentrating on the organization. The approach thus calls for employers finding the right psychological or sociological tools to motivate the employees so as to achieve the desired results. A comparison of the contingency approach, the classical approach, neoclassical approach and the behavioral approach of management reveals that contingency approach to management is the best to deal with changing situations at the workplace. Times have changed and the structured patterns of approaching circumstances are becoming obsolete and instead calling for employers to come up with solutions to different issues as they arise. For instance, lately, companies and competing firms are adopting the use of advanced technologies in their operations. Such an occurrence would have been unpredictable years ago. Therefore, it is advisable that firms make use of contingency approach when dealing with different situations at work and especially when dealing with the needs of employees. In conclusion therefore, contingency approach of management makes use of specific solutions tailored towards handling specific circumstances. The approach is best suited to handle the different situations faced by today’s managers. Additionally, some managers make use of classical, neoclassical or behavioral approaches of management. These other approaches have structured patterns of dealing with issues at work and therefore such organizations have a routine or rather protocol of how things should be done. It is therefore of paramount importance that managers adopt contingency approach in their operations to ensure organizational effectiveness and to also enhancing their preparedness for different situations. References Honig, B. (2004). Entrepreneurship education: Toward a model of contingency-based business planning. Academy of Management Learning & Education, 3(3), 258-273. Koontz, H. (1980). The management theory jungle revisited. Academy of management review, 5(2), 175-188. Hofer, C. W. (1975). Toward a contingency theory of business strategy. Academy of Management journal, 18(4), 784-810. Zeithaml, V. A., “Rajan” Varadarajan, P., & Zeithaml, C. P. (1988). The contingency approach: its foundations and relevance to theory building and research in marketing. European Journal of Marketing, 22(7), 37-64. Sarker, S. I., & Khan, M. R. (2013). Classical and neoclassical approaches of management: An overview. IOSR Journal of Business and Management, 14(6). Indabawa, S. L., & Uba, Z. (2014). Human Relations and Behavioral Science Approach to Motivation in Selected Business Organizations in Kano Metropolis Nigeria. Human Relations, 6(25). Read More