Importance of Environmental Factors.

1)      Why organizational adaptation to environmental changes is important?

2)      From this discussion, explain the main features of contingency theory.

3)      How the contingency theory leads to the development of complex adaptive systems (CAS) approach?

 It is a fact that an organization has to deal with various internal and external factors, which can play part in its success or failure, and one of the important external factors is environment. The organization is surrounded by an environment, which can be significant to it in so many ways. Any changes to the environmental factors can have a huge impact on the organization. An organization can lose important segment of the customer or it can lose any cost advantage for its business processes due to changes in surrounding environment. So, organization cannot leave these environmental changes unattended for too long, and they will have to adapt to these particular environmental changes so that business processes can be run normally, smoothly & deficiently as they were running before these changes.

There are several good points of the contingency theory;

The flexible ways for the styles of the management and the leader can decision by considering the various point rather than by making the standards one to taking decision for their employees and organization.

By applying this theory business can be able to measure the problems in effective manners as well as their management can be adapted for specific needs of the organization.

The opinions of the employees matter for taking the decision about the organization as well as for any kinds of the management change with in the organizations.

Keeping above mentioned discussion about environmental factors in view, it can be said that contingency theory is the one, which can be instrumental for an organization to adapt to the environmental changes. According to contingency theory, the organization cannot adopt any universal set rule or guideline, which can make it a perfect one by making those universal decisions, rather theory asserts that organization is an entity, which is dependent on various internal as well as external factors, and it will have to make decisions according to these changing factors. Uncertainty is a main feature for structure of an organization, which is covered by contingency theory, which means that an organization will have to deal with uncertainty by making optimal decisions time to time by looking at changes in internal & external elements.

So, when an organization will try to react to every change in the internal and external environment, and decisions will be made accordingly for each individual factor; that means the organization is using contingency theory, which is leading to develop the essence of complex adaptive systems (CAS). The CAS asserts that organization cannot wholly understand the system behavior of whole organization just by understanding parts of an organization individually. It clearly means that an organization has a system, which is based on various interacting parts; these parts change & evolve over time. So organization will have to use complex adaptive system method to deal with the changes of every part of the system so that whole organization can be managed successfully.

Why power and politics are important concepts to consider in designing organizational structure and operational procedures? Explain this by comparing a rationalistic approach in organizational theory.

The theory of the rational organization is referred as the idea that an organization, just like as the business is referred as the tool for attaining the set of the goals.  The formal structure is used in the rationale organization for defining the role of each member in the organization. According to this theory the goals and roles are defined in effective manners. According to this theory the management process in the organization must be rationale and predictable.

This contingency theory deals with the situation, which means that a leader acts according to the demand of a situation. It also means that leadership does not come with any particular methods to apply; rather leader reacts to certain given situations. So, it is up to their ability and skills that how they adapt to different situations and what necessary skills they show as per requirement of a situation. An organization may have to face different situations, and this theory asserts that a leader should have skills to act according to each situation to achieve success.

The rational organization will have a proper system or structure, where roles will be defined for everyone, and they will act accordingly. In real terms, organizations do have a rationalistic approach in their behavior, but it is not the only thing to structure an organization, because organizations also have politics in their behavior as well. Meanwhile the contingency management theory leads towards the democratic leadership’s styles in which all of the employees and audiences are involved in the decision and matters of the organization. According to the contingency theory of the Fiedler the leader always follow the two major points which are the task oriented and people oriented.

The organization is an entity, which has to design a proper structure so that organizational procedures can be managed accordingly. In this process, the organization has to make various decisions and distribute authority so that relevant powers can be exercised. Keeping this fact in view, the organizations are considered political structures as organizations also deal with distribution of power and authority, which means that politics is also an element in its structure. To understand the political pyramid in structure of an organization, it is important to understand that individuals get a power base in organizations, which means that other than the economic point of view, the organizations will have a political structure to handle that provide various options for people to grow their career through authority & power. The power exercised by an individual leads to complete few relevant activities and power is used to influence others so that those activities are performed accordingly. It is also a fact that power is not only enjoyed by the leaders, but it is also exercised by employees in a way so that they can ensure their survival.

The politics and power are important parts of organizational behavior, but they can also be dangerous as well because when power and authority is exercised, and if it had no particular checks then various problematic things can happen such as corruption, abuse of power, excessive domination, scandals, as well as suppression & exploitation of people having no power. There is one more view to handle structure of organization and that is rationalistic approach of organizational theory. According to this theory, the organization is an entity, which has certain definable objectives to achieve. The rational organization will have a proper system or structure, where roles will be defined for everyone, and they will act accordingly. In real terms, organizations do have a rationalistic approach in their behavior, but it is not the only thing to structure an organization, because organizations also have politics in their behavior as well. The individuals may have defined role but they can use power on their own terms to influence others in the organization.