This paper aims at looking in depth at the contingency approach to management. The paper will use a case study of a manager at a busy store in Australia and use it as an example of how the contingency approach is employed in a business. The advantages of using this method of leadership will be evaluated and a cross-section of the possible defects in the method identified.
To clearly understand the whole idea of contingency approach to managing is very critical to the discussion in this paper. Therefore, contingency management is an approach that lies on the strong belief that there can be no single and particular way of managing an organization that should be taken as an ideal method of management. Instead, the approach focuses on the various sides to effectively managing an organization depending with the situation that currently faces the firm or organization.
According to the contingency approach it is practically impossible to choose a particular way of managing. The approach focuses on three tenets which are; to identify the conditions needed for a task to be performed also called scientific management school, the managerial job that is to be done and the persons involved in the performance of an organization. The three tenets form the basic and complete solution approach to particular situations thus forming a specific circumstance-focused approach of management. Therefore it is evident that the contingency approach refers to the immediate circumstances that affect the organization.
In contingency managing, the manager has to greatly focus on the particular situation at hand. The manager should identify the approach to use in countering a presently existing situation. For instance, if an organization had a pressing problem of unproductivity then the various approaches to be used would possibly be the classical management approach which would focus on creating a new incentive scheme and the behavioural approach that would delve in creating a climate that is psychologically motivating. On the other hand, the contingency approach would consider both ideas workable and achievable but a great consideration would be given to the possible fit of each of the solutions to the goals, resources and the structure of the firm. Thus the internal and external environmental factors of an entity are well determined and the design of the organization and the managerial actions are advocated for greatly in contingency management approach (Burns & Stalker, 2009).
The manager interviewed in this case is the owner of "Designer Direct" a firm that deals with the selling of pillows, bed sheets and blankets. The firm is located in South Australia. The firm in question operates as a single entity with a number of subsidiaries all over the country that act as outlets to its products that are manufactured in a big warehouse. The founder of the entity plays a number of crucial roles in the management of the entity which includes the financial, marketing and the general running of the daily day to day activities of the firm.
As the adage states categorically that no man can survive on his own, the managing director has employed a team of supporting staff that is responsible for overseeing the daily activities in the firm. Some of the supporting staff in the entity is the area manager, logistics manager, warehouse manager, accountant and the procurement officer. The area manager is owed with the responsibility of overseeing the daily operations of al the stores, the logistics manager deals with logistical issues while the warehouse manager is responsible fort ht e running of the warehouse. The accountant deals with accountancy issues and in the calculation of the firms returns and expenses whereas the procurement officer is fully responsible with procurement and purchase issues. In addition to this support staff, a supervisor is employed by each store to oversee and is directly accountable to the area logistics manager.
The style of leadership in the organization, "Designer Buying", is definitely a real life focused management style. The manger has some tasks that define the reality of situations and these are the tasks that form the core of his duties and obligations. For instance, the decision making role that he has, is purely based on the reality of situations in the business world. The manager has to constantly determine when it is best to use the available resources to bring in more business to the firm in terms of creating a sales-stir.
From the interview it is also evident that the manager has carefully structured the leadership in such a way that it would be easy for him to focus and monitor on the goals and objectives of the firm. The buyer he has appointed is very critical in substituting his function of buying stocks. The incumbent of that office should be a person that focuses on the organization and puts the interests of the business before spending or opting to spend resources to bring more stock. The procurement officer, the logistics officer and the supervisors are also critical in the management of the organization. These structure of leadership is basic in determining the success of the business and thus the required effort is critical by the incumbents is critical in observance of the goals and vision of the organization in decisions making.
In the contingency approach to management the actions of a manger are not restricted but are dictated by the present situation. Thus the contingency approach ought to give an analysis of the interrelationships that exists between a managerial action and the variables of a situation. The main aim of the contingency approach is to provide an alignment between the various managerial and situational variables. This makes the approach according to (Nolte, 2010), a situational as well as an analytical approach aimed at arriving at a practical solution to the present problem. Evidently the three core elements of the contingency approach are the environment surrounding the organization, the relationship between the techniques and concepts involved in management and the managerial strategies applied.
According to the interview conducted, the founder of "Designer Direct", has various stores located in different locations to act as the major outlets of the firm's products, however, in the management of the firm, the managing director and the founder of the firm is also responsible for the marketing, financial issues of the firma and the purchase and procurement of the firm's resources. I tend to believe that the management criterion being applied by the manager is not in line with the contingency approach to management because the methods and strategies that will be employed in the daily management of the firm will always be the same (Woodward, 2008). This according to the contingency approach of management is wrong because there is no single criterion that is considered right and effective in managing an entity all the time. This is because change always affects the business and for effective results, the technique employed should be varied time to time so as to keep in pace with the arising changes and demands. In addition to this, new ideas need to be brought into the business, a fact that the managing director who is also in charge of the financial sector and procurement department of the firm can not be able to do on his own (Fiedler, 2007).
The contingency perspective claims that stable and strong environments are for the argument that mechanistic frameworks and structures emphasis formalization, centralization and specialization if goals are to be achieved within an organization. The issue of predictability and certainty presents us with the go ahead to use various policies within our disposal to tackle arising situations (Wren, 2010). On the other hand, unstable environments present us with organic frameworks that suggests for decentralization if flexibility and adaptability are to be achieved. The issue of adaptability and flexibility demands for general methods to tackle those problems and tasks that are non-routine.
Another essential factor that is emphasized on by the contingency approach of management is the size of the firm. Designer Direct has a number of stores that it uses to dispatch its products. This indicates that the management of the firm and its store will be managed and operated in relation to the location of the entity. According to Nolte (2010) small and larger organizations can not be managed and operated using the same structures. Small organizations may be found to behave in an informal manner whereas larger entities tend to behave in more official and formal ways. Owners of small entities may control and direct the operations of their entities directly, but on the other hand, large entities ask for more complex and involving management strategies.
This means that what the managing director of the firm in question is doing is wrong, he should have professionals selected to manage the various departments within the firm since it is not possible for him to posses the specific know-how required to run the different departments. At the same time, selecting people to head various departments of the organization places the manager at a better position in managing and overseeing the general performance of the entity. Delegating duties to people makes them feel part and parcel or their actions and they will work hard since their efforts shall be noticed. Divisional framework of the organization which is big as "Designer Direct" is very appropriate and if left undivided the goals of the firm can not be achieved as targeted (Woodward, 2008).
To conclude, it is evident that the contingency approach of management argues that there is no single technique that can be termed best for the management of an entity. For effective planning, organizing, controlling and leading, management must be tailored to fit particular circumstances in hand that an entity is facing (Wren, 2010). The contingency approach to management tends to answer the commonly asked questions by managers regarding the most effective and right thing to do when faced by various circumstances (Fiedler, 2007).
The contingency approach sometimes referred to as the situational approach categorically states that there is no single and universal way to respond to arising questions within an entity most especially because people, organizations and situations will tend to vary every now and again. The only thing that may be considered as right will depend on the complexity and variety of the matter in relation to internal and critical environment. From our case study it is evident that contingency management though risky at times is critical to any organization. It is not wise to however shut down the propositions of scholars who give preference to behavioural and classical approaches to management. However, it is important to identify that contingency approach merges the two and gives the greater focus to the development of the organization.