STRUCTURAL%20CONTINGENCY%20THEORY

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STRUCTURAL CONTINGENCY THEORY
Structural contingency theory was a major
organization studies perspective in 1960-1970s,
but has since faded from the center. An open
system view how environmental conditions shape
internal organizational structures, SCT
emphasizes how a tighter fit between structure
and context increases orgl performance
survival chances Coalignment Efficiency of an
orgl design depends on its contexts

• Jay Galbraiths (19732) two principles
• There is no one best way to organize
• Any way of organizing is not equally effective
  (Consonance hypothesis)
• By implication
• Best way to organize is contingent on the
  environment

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Environment-Structure Fit
As organizations adapt their structures to fit
their contexts, a close coupling evolves (in OET,
a congruence between niche form) Variations
among orgl forms reflect their diverse
environments
If environment is Placid, Predictable, Homogeneou
s, Stable, Resource Munificent
If environment is Turbulent, Uncertain, Complex,
Unstable, Resource Scarce
Then structural form is Mechanistic,
Bureaucratic, Centralized Clear Goals
Then structural form is Organic, Informal,
Networked Ambiguous Goals
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Overview of SCT
ORGL STRUCTURES Formalization
Differentiation Vertical
Horizontal Size of admin. component
Centralization Complexity Span of control
Specialization
ORGL SIZE
TECHNOLOGY Production Information
ENVIRONMENT Uncertainty Resource
munificence Degree of competition
STRATEGY Defender, Reactor, Analyzer,
Prospector
SOURCE Adapted from Pfeffer (1982149 157)
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Technological Determinism?
SCT hypothesizes that structural complexity of
orgs core production information technologies
(a.k.a. the task environment) are primary
constraints on internal division of labor and
performance outcomes
TECHNOLOGY the physical combined with the
intellectual or knowledge processes by which
materials in some form are transformed into
outputs (Hulin Roznowski 198547)
English researchers such as Joan Woodward (1958)
and the Aston group (Hickson et al. 1971), linked
variations in the core organizational
technologies, such as batch vs continuous
production, to systematic differences in
organizations work group structures, managerial
employee behaviors, and outcomes.
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Critique of SCT

1. Imprecise concepts propositions more an
   orienting strategy or metatheory than a
   falsifiable system of theoretical propositions
2. Empirically, environment-technology structures
   loosely coupled equifinality a multiplicity
   of orgl forms can thrive in identical
   environmental conditions ? complex
   environl-form interactions
3. Emphasizes managerial adaptation to environl
   constraints, but underspecifies how managers
   can/should respond to particular external forces
   when redesigning internal organizational
   structures

• John Childs (1972) strategic choice explanation
  that managers are not highly constrained by
  environments technologies, but may exercise
  substantial choice (agency) in shaping their
  orgs structures
• By obtaining sufficient political power resources
  to cope with uncertainties threatening their
  orgs, managers may overcome environmental-technica
  l constraints on orgl survival and performance

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RESOURCE DEPENDENCE THEORY
As no org is self-sufficient, all must obtain
resources from their environs. Power originates
in social economic exchanges, under uncertain
conditions, when orgs seek to acquire vital
resources but avoid dependence on orgs that
supply those resources. (Pfeffer Salancik 1978)
RESOURCES (money, participants, legitimacy) must
be obtained from an orgs environments POWER
DEPENDENCE an actor controlling crucial
resources can set advantageous exchange rates and
create recipient dependency Powerlessness
dependency on others for resources
Organizational power accrues to actors able to
cope with others uncertainties, in absence of
substitutable alternatives. Croziers (1964)
famous example of tobacco factory maintenance
workers, who kept no repair records destroyed
the manuals, hence making the firm dependent on
them to keep routine production going.
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Some RDT Propositions

• Macro-structural conditions affecting inter-
  intraorgl dependencies
• How critical is a resource to org or subunits
  operations?
• What control do others exercise over the
  resources allocation?
• Are substitutes or alternative sources
  available?

P1 Greater orgs dependence on external source
for critical resources, the more it complies with
sources demands about structures actions EX
School curricula shaped more by state legislators
or by local voters?
P2 Coalitions of external stakeholders shape
orgl practices policies EX 1980s campaign
demanding that colleges foundations divest
their stocks of corporations doing business with
apartheid South Africa
P3 Orgl subunits acquiring critical resources
have more internal power EX Why do business
school law professors make much higher salaries
than social work womens studies teachers?
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Power is Relational
Power in organizations is inherently the property
of a relationship between actors. Max Webers
two famous definitions explicitly asserted that
power (Macht) is not the resources held by an
actor, but occurs during situated interactions
involving actors with potentially opposed
interests and goals.
Power is the probability that one actor within
a social relationship will be in a position to
carry out his own will despite resistance,
regardless of the basis on which that probability
rests. (1947152) We understand by power the
chance of a man or a number of men to realize
their own will in a social action even against
the resistance of others who are participating in
the action. (1968962)
Some power is based on force (coercion). But, if
actors willingly assent or consent to obey
anothers commands, power becomes legitimate
authority (Herrschaft), which may be based on
actors traditional, charismatic, or
rational-legal beliefs in the rightness of their
relationship.
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Social Exchange Power Dependence
Peter Blau and Richard Emerson theorized that
unequal social exchanges generate power
dependencies within dyads
Power is a structural relationship, inverse to
the cost that one actor willingly pays to another
for an exchange. If actor B accepts a higher
cost than actor A, then B has a greater
dependence on A. As power over B is (1)
directly proportional to the importance B places
on the goals mediated by A and (2) inversely
proportional to the availability of these goals
to B outside the A-B relation. (Emerson 1962)
If you need a service from a more powerful person
(e.g., a professor), you face four
alternatives 1. Coerce her to give the service
use physical threats or blackmail 2. Supply her
with a service/good she needs in exchange,
resulting in relative equality 3. Find the needed
service from another source 4. Do without the
service If none of these alternatives is
possible, then youre dependent on the powerful
person and must exchange deference in order to
receive the needed service. (Blau 1964118-119)
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Power Bases Tactics
French Ravens classic typology (1960) of five
bases of power
Coercive Forced against will Boss demands you
wash her car Reward Play for pay Boss promises
you a raie for good work Legitimate Its right
to do Boss asserts she has authority to
act Referent Personal charisma Boss is a
legend in her own mind Expert Know-it-all Boss
hangs her CSOM diplomas on wall
Behavioral tactics for the most profitable use of
power resources (Kipnis et al. 1980) Assertivenes
s Ingratiation Rationality
Exchange Upward appeal Coalition
formation
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References
Child, John. 1972. Organization Structure,
Environment, and Performance The Role of
Strategic Choice. Sociology 61-22. Blau, Peter
M. 1964. Exchange and Power in Social Life. New
York Wiley. Emerson, Richard M. 1962.
Power-Dependence Relations. American
Sociological Review 27 31-40. French, John P.
R. Jr. and Bertram Raven. 1960. The Bases of
Social Power. Pp. 607-623 in Group Dynamics
edited by D. Cartwright and A. Zander. New York
Harper and Row. Hickson, D.J., C.R. Hinings, C.A.
Lee, R.E. Schneck and J.M. Pennings. 1971. A
Strategic Contingencies Theory of
Intraorganizational Power. Administrative
Science Quarterly 16216-229. Hulin, Charles L.
and M. Roznowski. 1985. Organizational
Technologies Effects on Organizations
Characteristics and Individuals Responses.
Research in Organizational Behavior
739-85. Kipnis, D., S.M. Schmidt and I.
Wilkinson. 1980. Intraorganizational Influence
Tactics Explorations in Getting Ones Way.
Journal of Applied Psychology 65440-452. Galbrait
h, Jay. 1973. Designing Complex Organizations.
Reading, MA Addison-Wesley. Pfeffer, Jeffrey.
1982. Organizations and Organization Theory.
Cambridge, MA Ballinger. Pfeffer, Jeffrey and
Gerald R. Salancik. 1978. The External Control of
Organization A Resource Dependence Perspective.
New York Harper and Row. Woodward, Joan.
Management and Technology. London HMSO.