The Contingency Approach

The contingency approach.

Explain the term ‘contingency approach' and give an example of each of at least five factors that influence the choice between mechanistic and organic structures.

When looking at the meaning of the word "contingency" you are looking at factors such as uncertainty, interdependence and size that reflect the situation of the organization. The term "contingency approach" is based on the idea that there is no one best way to manage and lead an organization that to be effective, planning, organizing, leading, and controlling must be tailored to the particular circumstances faced by an organization. That is that the idea of the performance of an organization depends on having a structure that is appropriate to its environment.

When a manager of a company has to choose a good and appropriate structure, mechanistic or an organic structure would be his choice, there are certain contingencies that help managers to favor one structure rather than the other. (Such as strategy, technology, size/life cycle and environmental uncertainty)

Mechanistic structures: here you have an efficient functional structure with closely defined tasks. People perform specialized tasks, hierarchical structure of control, knowledge located at top of hierarchy, vertical communication, loyalty and obedience valued.

Organic structures: Team based structure, innovation, developing new products rapidly and imaginatively. In an organic structure people contribute experience to common tasks, network structure of contacts, knowledge widely spread, horizontal communication, and commitment to task goals more important than to superiors.

Factors leading to structure type:

Factor Mechanistic Organic

1. Size Large Small

2. Strategy Cost-minimization,