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Critically contrast the approach to organisations of the classical management theorists with that of the contingency theorists. Which do you think has had the greatest impact on management today and why?

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Introduction

Topic: Critically contrast the approach to organisations of the classical management theorists with that of the contingency theorists. Which do you think has had the greatest impact on management today and why? The management field is characterised by a wide variety of theories, schools and directions. This essay examines the classical and contingency schools of thought -- the approaches to organization that have had the greatest impact on management today. Firstly the essay delineates and criticises the important theories propounded by classical writers. The essay continues with an account of the contingency school, and finally evaluates its impacts on managerial thought. Up until about the late 1950s academic writing about organisational structure was dominated by the classical management school. This held that there was a single organisational structure that was effective in all organisations. (Clegg & Handy, 1999). According to Holt (1999), the classical school is characterised by "being highly structured, with emphasis on the formal organisation with clearly defined functions and detailed rules, autocratic leadership, a rigid chain of command and control by superiors" (Holt, 1999, p.137). The three greatest proponents of classical theory were Taylor, Fayol, and Weber. Each identifies detailed principles and methods through which this kind of organisation could be achieved. Taylor (1947) developed a systematic approach to called 'Scientific Management', which focused on efficient production. ...read more.

Middle

emphasised that Chandler's theory has some distinct restrictions. First, Chandler looked only at very large and powerful industrial business firms which dominated their industries. Whether Chandler's findings would be applicable to small-and medium-sized organisations, service companies or those in the public sector could not be answered in this sample. Second, when Chandler used the term 'strategy', he really meant 'growh' strategy. His definition of strategy, based on product differentiation, is far from all-inclusive. Another critique on the strategy imperative lies in questioning the degree of discretionary latitude that managers actually have. The impact of strategy would be greater in the early development period of an organisation. Once a firm becomes established, it cannot change easily. Moreover, the strategy imperative deals with a lag factor: when management implements a new strategy, there is often no immediate change in structure (Robbins and Barnwell, 2002). The other thorists who focus on strategy-structure relationship is Bartlett and Ghoshal (1991) who proposed that each of these strategies required specific organisational structural characteristics to be effective. To be successful, they not only had to have an appropriate strategy for their product but they also needed a structure that fitted the strategy. Ghoshal put forward the transnational organisation concept as a managerially sophitisicated ideal type towards which cross-national organisations will have to develop in order to obtain and retain global competitiveness. ...read more.

Conclusion

In the Chandler's typology, it was similar to an organisation with a single-product strategy. However, expanding their product lines to such things as personal computers and mobile phones, and their business market worldwide, Sanyo confronted the need for organisational change. In 1999, Sanyo introduced the Company System into their management replacing the existing department system. After this structural change, Sanyo's organisation structure turned into a more divisional structure. Each of the five "companies" (Industrial System, Multimedia, Home appliance, Semi Conductor, Soft Energy) has great autonomy and independence from its management. This transformation could be described as a move towards a multi product strategy. In the contingency view, Sanyo is a company that skilfully manages its organisational change in accordance with their managerial strategy. This kind of transformation based on the contingency approach can be frequently seen in today's activities of global firms. From this perspective, it can be concluded that a contingency theory of organisation had a great impact on management today. Ketchen (2003) points out that firms become more "organic" (flexible in their structure and operations). While some firms prospered in the new environment by creating highly flexible structures and processes, others fail. This implies each organisation should consider the necessary actions taking into account various contingency factors, and, as a living organism, have the capacity to change its structure appropriately to the environment. ...read more.

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