The contingency approach believes that it is impossible to select one way of managing that works best in all situations like promoted by Taylor.

The contingency approach believes that it is impossible to select one way of managing that works best in all situations like promoted by Taylor. Their approach is to identify the conditions of a task (scientific management school), managerial job (administrative management school) and person (human relations school) as parts of a complete management situation and attempt to integrate them all into a solution which is most appropriate for a specific circumstance. Contingency refers to the immediate (contingent or touching) circumstances.

The manager has to systematically try to identify which technique or approach will be the best solution for a problem which exists in a particular circumstance or context.

An example of this is the never ending problem of increasing productivity. The different experts would offer the following solutions:

  • Behavioral scientist: create a climate which is psychologically motivating;
  • Classical management approach: create a new incentive scheme;
  • Contingency approach: both ideas are viable and it depends on the possible fit of each solution with the goals, structure and resources of the organization. .

The contingency approach may consider, for policy reasons, that an incentive scheme was not relevant. The complexity of each situation should be noted and decisions made in each individual circumstance.

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It should be realized that the contingency approach is not really new because Taylor already emphasized the importance of choosing the general type of management best suited to a particular case. Henri Fayol, in turn, also found that there is nothing rigid or absolute in management affairs.

Similar ideas were expressed in the 1920s, by Mary Parker Follett (1865-1933) who was greatly interested in social work and was a genius for relating individual experience to general principles. Her concept of the law of the situation referred to the necessity of acting in accordance with the specific requirements of a given situation. She noted that these requirements were constantly changing and needed continuous efforts to maintain effective working relationships.

The contingency approach seeks to apply to real life situations ideas drawn from various schools of management thought. They claim that no one approach is universally applicable and different problems and situations require different approaches. Managers must try to find the approach that is the best for them in a certain given situation, so they can achieve their goals.

It is important to note that the contingency approach stresses the need for managers to examine the relationship between the internal and external environment of an organization. Critics of the contingency approach have blamed it to lack theoretical foundation and are basically intuitive. Managers today are advised to analyze a situation and use ideas from the various schools of thought to find an appropriate combination of management techniques to meet the needs of the situation.