Assessment of two management theories
Oleksandr Pentsko
Business Leaderhip, Toronto Imperial School
BOH4M
Mr. Linhares
January 24, 2025
Contingency Theory vs. Systems Theory: Relative Strengths and Weaknesses
Contingency Theory and Systems Theory are two distinct approaches toward
management, both having factors enabling their application and those setting
limitations.
There is no universally appropriate approach to manage the organization,
according to Contingency Theory. On the contrary, internally and externally, the
best method is determined by the environment, the size of the organization, and
certain tasks. The strengths of this theory are its flexibility in strategy
adaptability by a manager in line with situational needs, applicability within the
real business world since it positions management practices based on dynamic
contexts of organizations, and outcome-oriented-geared toward achieving those
goals through bespoke strategies. However, Contingency Theory also has its
weaknesses: it can become overly complex when managers have to assess and
adopt many variables, which may overwhelm a decision-making phase. It
provides limited standardized processes that may cause inconsistency and is
usually time-consuming since strategies need to be constantly updated by
management.
Systems Theory treats the organization as a complicated set of interdependent
and interconnected sub-systems that work toward the realization of a common
objective. This theory provides an holistic view, enhancing the understanding of
how the various parts interrelate within the organization. It encourages
integration and collaboration, hence fostering cross-departmental synergy, and it
emphasizes adaptability, recognizing external environmental factors and
promoting resilience to change. Even with these strengths, there are weaknesses
in Systems Theory. It can overemphasize interrelations, sometimes at the
expense of specific departmental or task-focused issues. It is resource-intensive,
requiring ongoing monitoring and effort to maintain system-wide balance, and
it may overlook individual contributions, focusing instead on overall system
performance.
Scenario Application: New Technology Implementation
But a mid-size retail company trying to introduce into its operation cycle the
use of higher-scale inventory management for the purpose of either
streamlining or cost-cutting, while there are problems such as potential
employees' resistance to and lack of necessary technical skills in its workforce.
In this case, Contingency Theory would work exceptionally well. The managers
could use participative decision-making with the techie-savvy employee group
and extend comprehensive training and support to less skilled employees by
adapting strategies according to the needs of different employee groups. This
would help in overcoming resistance and under-engagement. However, the time
it takes to assess and adapt to differences in needs could delay the
implementation process, which is one of the weaknesses of Contingency
Theory.
Systems Theory could also offer valuable insights. Its emphasis on integration
and collaboration ensures that all departments are aligned during the
technological shift. This holistic approach helps identify how the new system
impacts not just inventory management but also other areas such as sales,
customer service, and logistics. However, Systems Theory might focus too
heavily on interdepartmental coordination, potentially overlooking the
individual challenges employees face when adopting the new technology.
In this case, Contingency Theory is more appropriate because it enables
managers to respond to the different needs of employees and thus achieve
acceptance and successful adoption of the system. To further this approach,
elements of Systems Theory could be incorporated to align the new technology
with wider company goals and ensure that interdepartmental dependencies are
managed appropriately. This would provide an optimal implementation process,
taking into account both individual and organizational needs.
References
Petry, N. M. (2011). Contingency management: what it is and why psychiatrists should want to use
it. The Psychiatrist, 35(5), 161–163. https://doi.org/10.1192/pb.bp.110.031831
Serena, F. (n.d.). The advantages of a system approach. https://blog.swegon.com/uk/the-advantages-
of-a-system-approach
