No One Best Way To Do Things : Contingency Theory

                                                     No One Best Way To Do Things


The contingency approach is  a method of business management derived from the contingency theory . The contingency theory assumes that there is no "best way " to manage a business because businesses and situations differ to a great extent . A management approach that works for one situation may not work for another .
The contingency viewpoint focuses on management's ability to achieve alignments and good fits between employees and circumstances. This results in an employer discussing specific situations with employees to determine the best solutions to problems .

We can understand the concept of  contingency  approach with an example :
Let us consider the case of two students one with high IQ and other with low IQ . A teacher is teaching both the student . Because of their different IQ level teacher has to deal with them with different approach . First student is consistently performing in the class tests and second student finds it difficult to get atleast passing marks .
Teacher's approach to first student is to do critical analysis of his performance in tests so as to help him in achieving excellence . Whereas for second student teacher has to change his approach , he needs to motivate the second student . Despite his abysmal performance in tests teacher need to keep his motivation level high by appreciating his efforts , giving rewards etc .
By doing so teacher gains confidence and trust of second student , meanwhile teacher can work upon the weak areas of second student and help him in his studies.
Here , two different approaches are used by teacher to solve the problem .




Another example of shoe maker  :
A shoe manufacturer faced a problem of decreasing profit.
This problem can be looked from different dimensions :
from classical management theory : Time study from the belief that the decline in profit is due to lower productivity on the part of worker .
from behavioural management theory : may attempt to involve  worker more fully in decisions concerning  the methods to use in producing the shoes based on the premise that this will motivate workers to produce more .
from systems theory : may establish a committee of sales and productivity personnel to coordinate the production and distribution of goods under the assumption that large inventories are responsible for the decline in profits.
contingency approach enable the manager to examine the situation and to determine the cause of decreased profits before a new procedure or program is implemented .

Contingency theory is designed to provide the manager with the capabilities to examine numerous possible solutions to a problem .

Intrinsic rewards

Motivational dynamics have changed dramatically to reflect new work requirements and changed worker expectations. One of the biggest changes has been the rise in importance of psychic, or intrinsic rewards. 

Let us look at the definition of intrinsic rewards and how it is different form extrinsic awards :

Intrinsic rewards: An outcome that gives an individual personal satisfaction such as that derived from a job well done.
Extrinsic rewards—usually financial—are the tangible rewards given employees by managers, such as pay raises, bonuses, and benefits. They are called “extrinsic” because they are external to the work itself and other people control their size and whether or not they are granted. In contrast, intrinsic rewards are psychological rewards that employees get from doing meaningful work and performing it well.

Extrinsic rewards remain significant for workers, of course. Pay is an important consideration for most workers in accepting a job, and unfair pay can be a strong de-motivator. However, after people have taken a job and issues of unfairness have been settled, we find that extrinsic rewards are now less important, as day-to-day motivation is more strongly driven by intrinsic rewards .

Need for  intrinsic rewards  in today's work :

 Most of today’s workers are asked to self-manage to a significant degree—to use their intelligence and experience to direct their work activities to accomplish important organizational purposes. This is how today’s employees add value—innovating, problem solving and improvising to meet the conditions they encounter to meet customers’ needs.

In turn, it is observed that the self-management process involves four key steps:

1) Committing to a meaningful purpose

2) Choosing the best way of fulfilling that purpose

3) Making sure that one is performing work activities competently, and

4) Making sure that one is making progress to achieving the purpose.

Each of these steps requires workers to make a judgment—about the meaningfulness of their purpose, the degree of choice they have for doing things the right way, the competence of their performance, and the actual progress being made toward fulfilling the purpose. 

When positive, each of these judgments is accompanied by a positive emotional charge. These positive charges are the intrinsic rewards that employees get from work, ranging in size from quiet satisfaction to an exuberant “Yes!” They are the reinforcements that keep employees actively self-managing and engaged in their work.

Source :http://www.iveybusinessjournal.com/topics/the-workplace/the-four-intrinsic-rewards-that-drive-employee-engagement

Theory X , Y and Z

Comparison among Theory X , Theory Y and Theory Z :

Theory X ('authoritarian management' style)

-     The average person dislikes work and will avoid it he/she can.

-     Therefore most people must be forced with the threat of punishment to work towards organisational objectives.

-     The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and wants security above all else.

Theory Y ('participative management' style)

-      Effort in work is as natural as work and play.

-     People will apply self-control and self-direction in the pursuit of organisational objectives, without external control or the threat of punishment.

-     Commitment to objectives is a function of rewards associated with their achievement.

-     People usually accept and often seek responsibility.

-     The capacity to use a high degree of imagination, ingenuity and creativity in solving organisational problems is widely, not narrowly, distributed in the population.

-     In industry the intellectual potential of the average person is only partly utilised. 

Theory Z ('Japanese' management style)

- Long-term employment and job security

- Collective responsibility

- Implicit, informal control with explicit, formalized measures

- Collective decision-making

- Slow evaluation and promotion

- Moderately specialized careers

- Concern for a total person, including their family

 

Three Idiots crossing the valley

                                       

MANAGEMENT OF THREE IDIOTS

What is TEAM WORK?

Designing the work in such a way that it becomes "Team Based" 

Comparison of TEAM WORK with INDIVIDUAL WORK

what is Team Work???

A team is one wherein all team members work towards a common goal. The communication between the team members should be free from any barriers. It should be well channelized and directed towards team building.

It’s a process of working together in order to achieve a goal. It forms a business part of day to day business as it is necessary for the colleagues in a company to work together. In a team, individuals cooperate using their individual skills and provide constructive feedback.

The Activity – 3 Idiots crossing the valley

We can see that three people were able to cross the valley without much trouble. At each point of time when one of the team member is in trouble (crossing the valley), the other 2 team members support the one at risk. Following observations have been made from the activity:

·        Every Team Member has equal distribution of different kind of risk :

         Fully Safe – 6 times

         Half Safe – 2 times

         Fully Unsafe – 1 time

Here, we see that all three members if the three people were to accomplish this so-called impossible task, they had to do so by proper designing of the team task, with everyone in the team having equal distribution of the risk involved in accomplishing the task.

The moment somebody assumes more responsibility, the entire team is bound to fail as the person not working as a team will bring down the entire team.

So, it is very important to divide labour in an equivalent proportion so that :-

                     1) We can accomplish the task at hand in a co-ordinated and well structured manner.

                     2) We do not deem anyone as weak or small. Everyone should be equally responsible and                                     strong.

                    3) We create interlocking roles to make sure everyone is equally involved in the task and nobody feels over dependent or under dependent, thus leading to loafing and increase in ideal time.

                    4) We can create only one form of authority so that the men are not confused as to who is the man in command.

Theory Z : Japanese management style

Theory Z is the name applied to the so-called "Japanese Management" style popularized during the Asian economic boom of the 1980s. In contrast Theory X, which stated that workers inherently dislike and avoid work and must be driven to it, and Theory Y, which stated that work is natural and can be a source of satisfaction when aimed at higher order human psychological needs, Theory Z focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job. According to Dr. William Ouchi, its leading proponent, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction.

 

Characteristics of the Theory Z

- Long-term employment and job security

- Collective responsibility

- Implicit, informal control with explicit, formalized measures

- Collective decision-making

- Slow evaluation and promotion

- Moderately specialized careers

- Concern for a total person, including their family

Theory Z

Theory Z is a form of management in which workers are involved in the work process on the factory floor. Schedules, division of labor, work assignments, and other aspects of the labor process are given over to workers to do as they see best. Investment policies, wages, fringe benefits and kind of product are not given over to workers to decide; only how best to do that decided by top management.

Theory Z was developed by William Ouchi, in his book 1981 'Theory Z: How American management can Meet the Japanese Challenge'. William Ouchi is professor of management at UCLA, Los Angeles.

Theory Z is often referred to as the 'Japanese' management style. It's interesting that Ouchi chose to name his model 'Theory Z', which tends to give the impression that it's a Mcgregor idea.

Theory Z essentially advocates a combination of all that's best about Mcgregor's XY theory and modern Japanese management, which places a large amount of freedom and trust with workers, and assumes that workers have a strong loyalty and interest in team-working and the organisation.

Theory Z also places more reliance on the attitude and responsibilities of the workers, whereas Mcgregor's XY theory is mainly focused on management and motivation from the manager's and organisation's perspective.