Contingency Theory: Implications for the Selection of Discrete Management Practices

In referring to discrete management practices, we have in mind such things as payment systems, control systems, man- power selection, placement and promotion systems. This study’s most general implication for the choice of such man- agement practices is that it be made with thoughtful attention to the task and environment of the organizational unit affected. This point seems obvious, but those who design and select procedural systems are often at headquarters, where the convenience of using uniform practices throughout the firm often seems more important than improving the fit between the procedure and the particular job to be done. As it becomes possible systematically to tailor management practices to different tasks, a new form of consistency can be achieved. Each of the discrete practices within each major unit can be consistent with the other practices in that unit, so that all will reinforce the desired task performance. If this type of harmony can be achieved, the sacrifice of consistency in the use of any single practice across all units will be a very small price to pay. It is neither appropriate nor possible to spell out all these possibilities in detail here. We will start a short distance down this road by considering the prospects of using the basic concepts of this study in the design of control systems, evaluation and reward systems, position descriptions, and selection and placement systems.

By the term control system we mean primarily the conven- tional practice of accumulating data on actual events and comparing them with planned objectives. Such data can ob- viously be aggregated to cover different time intervals and different organizational units. Some of the basic variables we have been using could help to guide these choices in the design of control systems. Is there a sensible relationship between the time intervals used for data reporting and the time span of feedback from the environment? We have seen that, as we look at progressively higher echelons in the hierarchy, this time span tends to lengthen. Is this reflected in the control reports? We also saw that in most organizations production has a shorter time span than research. Is this reflected in the design of the control system? The degree of uncertainty of information could also be considered in control system design. Are the time interval and the detail of reporting adjusted for variations in certainty? The computer’s great and growing capability for processing information makes such a flexibly designed control system an eminently practical choice.

An organization’s evaluation and reward systems are usually closely tied to the control system. Some of the questions just raised concerning time span would be equally relevant to selecting the time interval to be used in formal systems for reviewing individual and group performance. Another factor of consideration in designing such systems is the degree to which each man’s job requires him to play an independent, highly differentiated role or, at the other extreme, a highly interdependent integrator’s role. Most jobs have some mix of these duties, but the proportions can vary considerably. Such variability, when analyzed, can help the planner to decide whether rewards are best tied to specific limited task results or to the general performance of a larger segment of the organization. It can also influence whether the linkage to re- sults is direct or indirect. Reward systems, as we have seen, can help to induce either the “you do your job, and I’ll do mine’’ attitude or the “let’s pull together” attitude. Each can be suitable under certain conditions. Reward systems should be designed with these conditions more clearly in mind.

How much the behavior of managers is influenced by their formal position descriptions and the “standard operating pro- cedures” handbook has always been a matter for debate. The fact of the debate is, in itself, probably a good indication that the seriousness with which these documents are taken varies from organization to organization, and even from unit to unit within any one organization. This well-known variation may occur because those who draft these ground rules do not take sufficient account of the differences in task and environment faced by each major unit or by different total organizations. We have seen in this study that it is useful to vary the degree of structure in units as the certainty of their task varies. One indication of structure is the specificity of position descriptions. Another is the degree of reliance on detailed formal rules. These findings can be directly applied as guidelines in the design of job descriptions and procedural manuals. The more certain and predictable the task, the more appropriate it is to be specific and detailed in job descriptions and rules. The reverse, of course, is also true.

We have already made a case for research beyond the limited findings of this study into the relation between individuals’ predispositions and their readiness to adopt required mental orientations and live comfortably within requisite structures. Until we have hard findings from such research, we cannot say much of practical import on the subject of personnel selection, except to emphasize that a clearer picture of the desired attributes for each part of the organization provides the personnel decision maker with very useful mental guidelines for reviewing candidates. In business generally the personal interview is still by all odds the single most important selection tool. This means that the selection criteria are buried in the intuition of the interviewer. His intuition can profitably be guided by more systematic knowledge of the requisites for different organizational segments, even though we cannot now completely translate them into precise personality traits nor accurately measure these traits in candidates.

The treatment we have given the choice of management practices should properly be seen as only suggestive of the potential implications of contingency organization theory in this area. Much of the possible application work must clearly await further applied research, but the prospects for such research have not been so favorable for many years. For the past decade or so systematic inquiry into discrete management practices has been rather out of style, not only because such research is often considered “lowbrow applied stuff,” but more importantly, because the few studies undertaken have proved to be of very limited value. Researchers have realized that simple surveys of existing practice add little to useful knowledge, yet more sophisticated research designs all too frequently failed to come up with meaningful findings. The trouble has been that most attempts to relate discrete management practices to measures of performance have only served to prove that the search for universally effective practices is futile. In such circumstances backing off from this research is, in the short run, the only intelligent response. Now, however, the prospects for renewing such efforts are much brighter, provided investigators control for relevant contingent variables. Such research seems to be picking up momentum, and the manager can reasonably expect some specific help from the findings that emerge.

Source: Lawrence Paul R., Lorsch Jay W. (1967), Organization and Environment: Managing Differentiation and Integration, Harvard Business School.

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