Contingency Theory

  • Theorists like Selznik, Burns and Stalker, Woodward, Lawrence and Lorsch, Thomson were the principal developers of this theory.
  • According to Delery and Doty ” the contingency theory, indicates that the relationship between the relevant independent variable and the dependent variable will vary according to such influences as company size, company age, technology, and capital intensity, the degree of unionization, industry sector, ownership and location.
  • Contingency arguments imply potentially complex interactions amongst HRM variables; between HRM variables and performance indicators; between HRM variables and contingency factors; and between performance and contingency factors.
  • Delery and Doty” cite Schular and Jackson,’ ; Gomez- Meija and Balkin,* as mainstream contingency theorists, but the tradition goes back much further and include the work of Woodward, Pugh and Hickson,* Pugh and Hinings,’ Pugh and Payne, and Mintzberg.
  • ‘ This theory expresses the definitions of aims, policies and strategies, lists of activities and analyses of the role at Human Resource Department are valid only if they are related to the circumstances of the organization.
  • According to Armstrong, textbooks narrate principles and practices in a more prescriptive manner of how the organizations manage their human resources, portray the universalistic view but how the organizations adopt according to recurrent trends and changes in socio, economic political situations and in the emerging technology relate to contingency theory.
  • Contingency theory is essentially about the need to achieve best ” fit” between what the organization is and wants, technology, size, structure, the people, its employees and its external environment and what the organization performs and how it is structured and the processes, procedures and practices it implements.
  • Contingency theory suggests a situational viewpoint which enables for any organization to face any challenging circumstances and opportunities.
  • In contingency theory, it is believed that there is no universally accepted practice or principles in managing human resources.
  • It is an opposing viewpoint to universalistic theory.
  • Hence, managers are supposed to act according to environmental factors both internal and external to the organization.
  • Therefore the proponents of this theory are classified as contingentists or situationalists and their ideology as ‘best fit theory or contingency theory of HRM.
  • The Underlying philosophy of the above theory is the intricate relationship that exists between the change and the permanence and it is an admixture of both.


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