Relevance of the Contingency Approach to Managing People in Todays Globalised Environment - Coursework Example

Running Head: RELEVANCE OF THE CONTINGENCY APPROACH TO MANAGING PEOPLE Relevance of the Contingency Approach to Managing People in Today’s Globalised Environment Student’s Name Grade Course Tutor’s Name Date: Relevance of the Contingency Approach to Managing People in Today’s Globalised Environment Management theory was developed in the 1900s as it became evident that a framework to guide managers in leading, planning, controlling and organising development was necessary. As indicated by Bergman, Stagg and Coulter (2012), there are six management theories, each with a different perspective on how management should be organised. Looking at all the six theories, one gets the impression that they try to determine relationships between the situations that managers must address, the actions that managers take and the outcomes of those actions. This paper will look at the contingency approach of management, and will indicate whether the theory has any relevance in the globalised environment. The global environment on its part has been brought about by the fact that organisations are no longer constrained by geographical borders. As Bergman et al. (2012) observe, the global environment means that the modern manager now has to deal with issues such as cultural diversity, anti-capitalist backlash, and balancing an organisation’s interest with those of different stakeholders. Other theories of management include: the systems approach, organisational behaviour, quantitative approach, general administration theory and scientific management. Contingency Approach, Its Relevance or Lack Thereof The contingency approach indicates that “organisations are different, face different situations (contingencies) and require different ways of managing” (Bergman et al., 2012, p.58). In other words, the contingency approach suggests that different organisations face different situations, and as such, should face those situations differently. In the global environment, the foregoing could be interpreted to mean that managing an organisation in North America is different from managing an organisation in South Asia, as would be the case managing an organisation in Latin America. Different managers in different locations are hence faced with different situations, whose solutions can only be applicable individually. Going by this approach, it would mean that the contingency approach is relevant in the global environment. Further support to the credibility proposition is provided by Rodrigues (2001), who analyses the “14 principles of management” as theorised by Fayol, and indicates that the situation is different from what it was during Fayol’s time. Of special note is the point that as opposed to the past where managers were empowered, current day managers need to realise and appreciate that employees are empowered too and are at liberty to “conceive and implement new ideas” (Rodrigues, 2001, p. 881). Decision-making in today’s global environment is also ad hoc, while communication structures are less formal and flatter. Ideally, such characteristics in the workplace would require managers not to try and apply a management theory as prescribed in a textbook, but find management solutions that best fit a specific organisational issue at a given time. Following the contingency approach, the manager is tasked with identifying techniques, which makes the best contribution to management goals at a particular moment, in a specific situation and in specific circumstances (Rao, 2008). If a manager identifies the need to encourage employees to work towards enhanced productivity, he/she would seek to find out which motivation method would work best in regard to the prevailing work conditions and circumstances. The manager would thus opt for a job enrichment programme if working with skilled workers, or work simplification and/or training if working with unskilled workers. If the same manager was using the organisational behaviour approach, he/she would recommend enrichment or granting of greater autonomy to the workers in an effort to create a psychologically transformative climate in the workplace. The different dynamics in the global environment perhaps make it harder for any one management approach to serve all purposes for different organisations, operating in different places, under different social, political, economic and legal environments, at different times. As Chung, Wang and Huang (2012) indicate, organisations face different external and internal factors and as such “the relation between strategy and performance is often conditional and ...there is no universal set of strategic choices suitable for all situations and circumstances” (p. 56). The foregoing suggests that a manager is better off making decisions about the future direction of the company based on the specific circumstances or situation he/she faces at specific times. Bartlett and Goshal (2003) offer an interesting perspective of management in a global environment by stating that “there is no single model for the global manager” (p. 108). Specifically, the complexities of the global environment call for diverse skills and flexibility on the part of the manager to enable them handle the subtle negotiation and intense interchanges among other things required to drive the organisation’s profit agenda. Bergman et al. (2012) have offered a more detailed account of the factors that enhance the validity of the contingency approach in a global environment. Cultural diversity – i.e. where different cultures, religions and geography shape people’s attitudes, values and beliefs – is one of the main factors that require a contingency approach in management. Specifically, the manager has to be willing to adjust his or her management style in order to connect with people from different cultures working under him or her. The contingency approach is further made necessary in the global environment by the non-transferable nature of economic values. Bergman et al. (2012) for example note that while capitalism is generally accepted in some countries, other countries uphold different values, which do not place as much value on capitalism. To survive and succeed in such countries, managers have to modify their management strategies in order to reflect the values of each country where they operate. Globalisation has further made it possible for organisations to move jobs to countries where the cost of labour is low. Some of the beneficiary countries include China and India among others. As Bergman et al. (2012) observe however, such movement of jobs means that managers have to balance the profit-making interest of their organisations with other responsibilities towards the host communities. Notably, each host community is different in both the culture and their social expectations towards different organisations. Ideally therefore, the contingency approach is best suited for managing different situations faced by organisations working in such circumstances. Modern day managers also have to handle a diverse workforce, which according to Bergman et al. (2012), calls for them to recognise that diversity can be an asset. Getting the most from such an asset however requires managers to develop programmes that accommodate diversity in the workplace by recognising and celebrating different lifestyles, work styles and family needs. Some of the benefits that can come from a diverse workforce include a better understanding of an equally diverse customer base, availability of diverse problem-solving skills, and the presence of different opinions and viewpoints which can help in decision-making (Bergman et al., 2012). Concepts and Theories In search of a befitting theory for management, scholars and theorists such as Fayol (1988 and Mintzberg (1973, 1994 cited by Chapman 2001) among others have gone to great lengths to explain what managers should do. One of the relevant concepts proposed by Chapman (2001) suggests that managers have an important function of stretching the organisation’s boundaries “as they respond to opportunities and demands” (p. 61). Additionally, they act as coaches, controllers, mediators, negotiators, leaders and resource allocators in the organisational unit. These functions mean that they (managers) have to be flexible enough to act on different needs as they arise. Such an argument renders further support for the contingency approach, since managers in different organisations would require different controlling, leading, negotiating, coaching and resource allocation skills and competencies. Theories that attached managers to specific positions defined by a “command and control system” or hierarchy are increasingly becoming irrelevant (Chapman, 2001, 61). Consequently, managers are more flexible as they do not have to occupy a fixed position in the office structure, and they are relatively free to develop and expand the options they have as opportunities arise. Fayol (1949, pp. 5-6 cited by Lamond, 2003) indicates that “to manage is to forecast and plan, to organise, to command, to coordinate and to control” (p. 9). Forecasting involves examining the future and deciding what actions would help an organisation to attain specified goals. Ideally, each organisation is different and as such, different managers should come up with different forecasts and plans of actions for their respective organisations. After identifying the 14 principles of management, Fayol (1949, cited by Lamond, 2003) also indicated that the principles were by no means exhaustive. Going by this statement, it would appear that Fayol recognised that different organisations would face different situations, and at times, the 14 principles would not offer a sufficient explanation. Conclusion In this paper, it has been argued that the contingency approach is indeed relevant in managing people in today’s global environment. One of the major reasons why the contingency approach is relevant is because diversity as presented in modern-day organisations requires the manager to be flexible and accommodative toward all people in the organisation. Additionally, the fact that the global environment has opened up geographical borders to organisations means that what is acceptable in one country is not necessarily acceptable in another country. Consequently, managers have to be discerning enough to understand what a specific society accepts, and adjust the organisation to abide by the same. References Bartlet, C. A., & Sumantra, G. (2003). What is a global manager? Harvard Business Review, 81(8), 101-108. Chapman, J. A. (2001). The work of managers in new organizational contexts. The Journal of Management Development, 20(1), 55-68. Chung, H., Wang, C. L., & Huang, P. H. (2012). A Contingency approach to international marketing strategy and decision-making structure among exporting firms. International Marketing Review, 29(1), 54-87. Lamond, D. (2003). Henry Mintzberg vs. Henri Fayol: Of lighthouses, cubists and the emperor’s new clothes. Journal of Applied Management and Entrepreneurship, 8(4), 5-24. Rao, S. R. (2008). The contingency approach. Cite Management Article Repository of Cite.co. Retrieved April 03, 2014, from http://www.citeman.com/4127-the-contingency-approach.html Robbins, S. Bergman, R. Stagg, I., & Coulter, M. (2012), Management (6th edition). Melbourne: Pearson Australia. Rodrigues, C. A. (2001). Fayol’s 14 principles of management then and now: a framework for managing today’s organizations effectively. Management Decision, 39(10), 880-889. Read More