Contingency Philosopohy
Fred Fiedler (July 13, 1922 - June 8, 2017)
Fred Edward Fiedler was a pioneer in the field of
organizational and industrial psychology. He was an
influential psychologist who contributed to its
development. He contributed to the field's
transition from research on the qualities and
character traits of leaders to research on leadership
behaviors and styles. He developed the now-famous
Fiedler contingency model and contingency
modeling of leadership in 1967.
Contingency Theory
• The basic premise of Contingency Theory is that there is no one best way to lead
an organization.
• There are too many external and internal constraints that will alter what really is
the best way to lead is in a given situation.
• It is also known as situational theory.
• The contingency theory assumes that there is no universal answer to many
questions because organizations, people, and situations vary and change over
time.
Major Contingency Factor
•Strategy:
Logically structure follows strategy because organizational structures are built to achieve objectives by implementing the strategies. When strategy changes, structures must change. At the corporate level, strategies are
formulated based on the company’s mission and strategic goals or objectives.
•Size of the organization:
The number of employers working in an organization indicates its size. It is observed that large organizations differ structurally from small ones in terms of division of labor, rules and regulations, performance appraisal and
budgeting procedures.
•Technology:
Some kind of technology is used to convert the resources into outputs in every organization.
Technology includes the knowledge, machinery, work procedures, and materials that convert the
inputs into outputs. The technology used to manufacture the products decides the kind of the
organization for the production system.
•Environment:
Environment has an impact on decision making – specifically the difficulty of making decisions in an
uncertain or unpredictable environment. Similarly, the stability and predictability of the environment
have a direct bearing on the ability of the organization to function effectively. An unstable environment
that changes rapidly and is less predictable has two requirements:
i. The organization must be able to adapt to change, for which it needs to be flexible and responsive.
ii. The organization needs greater coordination among departments.
Advantages
• Contingency approach is dynamic in nature. So, it changes according to the situations. it allows
managers to change the policies according to the situation.
• Contingency approach helps the manager to enhance their leadership and decision-making skills.
• Contingency approach provides options to the employees, that helps them to grow and share
their ideas to the business.
• It helps to design the organizational structure and plan the information decision systems.
• It is pragmatic in nature as solution to every problem is found after analysing the solution.
Disadvantages
• It does not follow the concept of 'universality of principles' which often apply to specific
management situations.
• Contingency approach has a complex approach. The suggestion of the approach is very simple
but when it comes to practical it becomes more complex.
• Contingency approach is basically reactive in nature. Sometimes the handling the situations
become hard for the manager.
• Contingency approach suffers from inadequately of literature. It is not sufficient to say that ‘a
managerial action depends on the situation.
• It is not possible for managers to determine all the factors relevant to the decision making
situation. Because of constraints of time, money and ability, managers can neither collect
complete information about the environment nor analyze it completely.
Emerging Issues and Challenges in Nepali Business
•Increased private investment in core business
•Growing urban population
•Rising informed and educated customers
•Changing role of the government
• Rising economic agenda
•Use of modern technologies
•Integration to the world economy
•Shifting socio cultural values
•Shift towards service industry
•Workforce diversity
