In my time as a university student, back in the 1980s, I remember that in the Administration I course, when dealing with the development of administrative thinking, it focused on the following theories:
1. Theory of Scientific Administration.
2. Theory of Human Relations.
3. Structuralist Theory.
4. Mathematical Theory.
5. Systems Theory.
As a graduate, in the '90s, I honestly did not hear about the Contingency Approach or Situational Theory.
It was only in 2000, when I started teaching and for the purpose of updating in the Administration course, I found out about this theory, but it seems that it has not been fully disseminated.
It is interesting, now that we can no longer deny the importance of globalization, customer service, competitiveness, added value, and turbulent environments that companies suffer.
We can say from the aforementioned theories that all, with the exception of Structuralist Theory and Systems Theory, treat organizations as closed systems, that is, without contact with external factors such as the environment.
The same Structuralist and Systems Theories, although it is true, consider companies as open systems, they are very abstract and incomplete to solve the problems of the organization and its environment.
II. Situational theory
A. Origin
Based on a series of investigations carried out in the United States and England in the 1950s to various companies looking for models of more effective organizational structures. Also, because the researchers conclude that the various approaches or theories did not have answers for all situations, they were not completely complete, they were incapable of helping companies to be more efficient.
In 1958, William R. Dill publishes an article entitled "Environment as an Influence on Managerial Autonomy", it is quite clear that it deals with the influence of the environment. Also in that year, the English Joan Woodward carried out an investigation of one hundred companies in her country to verify if they applied in practice the administrative principles proposed by the various theories.
In 1961, the sociologists Tom Burns and GM Stalker reflected in their work "The Management of Innovation" the results of the investigation of twenty English companies on their relationship between administrative practices and the external environment, classifying two types of companies: mechanistic and organic. The first bureaucratic, closed, for stable environments and the second flexible, open, for unstable environments.
In 1962, Alfred D. Chandler, Jr. (better known as the father of strategy), in his work "Strategy and Structure", came to the conclusion that the environment influences the strategy and that it uses the organizational structure.
Paul R. Lawrence and Jay W. Lorsch are the fathers of Situation Theory not only for their various works: "Organization and Environment: Managing Differentiation and Integration" (1967), "Developing Organizations: Diagnosis and Action" (1969) and " Studies in Organization Design ”(1970); but because of his research carried out in 1972 related to the organization-environment confrontation with ten companies, reaching the conclusion that there is no single way to organize, that organizations must adapt to environmental situations.
B. Definition
In the daily work of the administrator, he always asks himself what will be the best way to do his job, there are many questions that have no solution in books or manuals. Situational Theory (TS) assumes that there is no universal answer to all concerns because organizations, people, and situations are constantly changing and changing.
Thus, to do the right thing, the administrator depends on a series of variables in a
critical and complex internal and external environment.
TS is the first theory that emphasizes what the organization-environment relationship is. You can define the environment in two ways:
a) as a set of people, groups and organizations that have exchange relationships with an organization.
b) as a set of economic, political, social, technological conditions, etc.
The environment can provide resources and opportunities, but it can also provide limitations and threats, these extremes are already part of the organizational strategy.
The variables that present the greatest impact on organizations are:
1. The size of the organization.
2. Adaptation to the environment.
3. The tasks.
4. People.
5. The strategies.
6. The technology used.
Therefore, TS is the last theory that makes up the General Theory of Administration (TGA) that deals with the various situations and contingencies and their resolutions by the administrator, taking into account the environmental changes suffered by the organization.
C. Principles
1. It is situational because it depends on diverse situations and circumstances, it practically rejects the universal principles of administration. There is nothing absolute, everything is relative.
2. It is a theory that admits that there is no “one best way” to manage in a given situation and that there are situational variables of internal and external environments that impact administrative practice (there is no universal or one best way to manage).
3. TS highlights logical "if… then" relationships. "If" this situational variable exists, "then" this is the action an administrator should take. For example, if I am a production manager and I have, due to budgetary limitations, obsolete machinery, then I have to direct or make decisions in a different way than having state-of-the-art machinery.
4. The TS takes into account the design of the organization (organizational design) which is the structure of the company. Given the continuous changes, its structure must be flexible and adaptable to the environment.
III. Conclusions
1. TS is the theory after Systems Theory, therefore, it is the ultimate in TGA. This does not mean that it invalidates the other theories, they all remain valid under certain circumstances.
2. The TGA formulated until then was not enough to explain the adjustment mechanisms of organizations with their environments because theories did not consider organizations as open systems.
3. Much of what happens to organizations is a consequence of what happens outside of them, the external environment, but controlling the environment is an impossible task. Imagine that an organization could control social, economic, political, cultural, ecological, technological conditions, etc. of a society. The only thing a company can do is adapt and innovate to survive, and environmental studies and research are still insufficient.
4. Actually the TS was created for complex organizations, but it can be applied to other types of companies that seek to place, relate or exchange their products and services to new markets.
5. The science of Administration is in constant evolution, we do not know at the moment what new theory will emerge, but personally I think that we should not wait for it to be formulated by Harvard or some North American guru, I think that as Latin Americans we are in a position to create a theory own according to our reality.
Lima, May 21, 2006.
Sources:
1. Introduction to the General Theory of Administration. Idalverto Chiavenato. Bogotá, 1999.
2. General Administration. José Villanueva Garay. Institute of training and professional advice. Lime.
3. www.referenceforbusiness.com. Contingency Approach to Management. Durward Hofler.
