8 Examples of Contingency Theory

John Spacey, November 28, 2022

Contingency theory is the theory that there is no best way to structure, organize, manage or lead an organization, team or group but that rather it depends on the situation. This situation would include both internal factors such as the discipline and talents of your employees and external factors such as competition and customer needs. The following are illustrative examples of contingency theory.

A call center that implements highly inflexible workflows whereby employees need only follow the instructions in a system. This is conductive to productivity and maintaining standards because the call center has very high turnover.	A construction manager who employs a strict command and control style of management over unreliable employees but is far less intrusive when managing those who have proved themselves reliable and diligent.
A firm with generous perks and working conditions that starts to demand cost control and high productivity when its revenue begins to slow.	A luxury hotel that responds to low ratings by greatly increasing their standards on performance reviews whereby employees who are good with customers are promoted but others are put on performance improvement plans.
A manager who plays a supportive role for a team with skills that are high in demand. The goal is to reduce turnover by supporting team members.	A manufacturing facility that closely monitors employees for compliance to process to reduce safety and quality issues.
A software firm that lets most software developers work from home because their performance is easy to measure in terms of working code.	An architecture firm that gives motivated and creative senior staff much freedom in how they want to organize their work and manage clients.

Contingency theory defeats the labeling of managers as having a style that is ingrained in their personality. In fact, most people are quite dynamic and manage different people in different ways.

Contingency theory also defeats the black and white thinking that there is a right and wrong way to do things when in fact your approach might more optimally vary by situation.

Overview: Contingency Theory
Type	Situation Analysis
Definition	The theory that there is no best way to structure, organization, manage or lead an organization, team or group but that rather it depends on the situation
Applies To	Management Leadership Organizational Structure Business Processes
Related Concepts	Situation Analysis » Internal Factors » External Factors » Labeling » Management Style » Management »