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Contingency Theory Etc.

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Submitted By KerulJ
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CONTINGENCY THEORY (1960s-1970s)
Contingency theory derives from system theory but it focuses more on deeper aspects. Contingency theory is a management approach that emphasizes what managers do in practice depends on a given set of circumstances (situation) (Boehm, A &L. Howard, 1997). Basically, it is the practice of the mangers depending on their environmental circumstances or situation. It is also called as “It all depends” theory or “Situation” theory (Thenmozhi, 2010,2011). According to Howard (1997), although adapting a management decision to situation seems to be simple, but it is actually very complex due to unpredictable situation.
This theory exists during the emergence of new companies, “Apple” and “IBM PC” releases its new product. Both of these companies are the examples of companies that use contingency theory. Although they act differently but it is still consider as contingency because both of the companies only react to their own respective situation such as technological factors, demand from customers, trend, economic factor and many more. ****
This theory claims that “there is no best way to manage an organization”. This theory further explains that organization must adapt several factors and this factor must take into account in order for the organization to be sustained and stable. Some of these macro-environmental or contingencies factors include: 1. Changes in technology, 2. Demographic shifts, 3. Economic conditions, 4. Cultural factors and, 5. Government and legislation.
However, usually the organizations that practice this theory have flexible in terms of their system structure. Those organizations that are well-structured will find it difficult to practice this theory because of inflexibility in adapting their current situation with the factors.
CHAOS THEORY (1980s-1990s)
Chaos theory is also part of system theory and

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