This paper examines two dominant management theories — systems theory and contingency theory — and their application within the electronics industry. It begins by defining each framework: systems theory views an organization as a collection of interrelated parts requiring holistic decision-making, while contingency theory advocates situation-specific responses tailored to the unique circumstances at hand. The paper then compares the two approaches across dimensions such as knowledge management, organizational flexibility, and interdisciplinary collaboration. It concludes that, despite their apparent differences, both theories share a multi-perspective orientation and can be applied simultaneously to improve organizational performance and effectiveness.
There are two dominant management theories relevant to the field of electronics that have proven effective tools for managing both organizations and people. The first, contingency theory, suggests that managers must take into account every aspect of a situation before acting upon it, and then act only on those aspects that are key to resolving the matter at hand (McNamara, 1999). Some have referred to contingency theory as an "it depends" theory because it allows managers the flexibility of making a spontaneous decision when considering multiple aspects of a problem (McNamara, 1999).
Systems theory is the other and more predominant management theory adopted or currently in practice within the electronics field. To understand this form of management, one must first understand that a system is a collection of parts that become unified in order to reach a final outcome (McNamara, 1999). All parts of the system are interrelated, and thus if one aspect is changed, the entire system is changed. Managing, therefore, requires that the manager consider how any one decision might affect the overall system framework. Systems theory is beneficial for looking at the broad or bigger picture — the organization as a whole. It is very useful in electronics and other technical fields, where various departments can become more synchronized if the management technique utilized is effective.
Correct utilization of management theory is vital for organizational planning, decision-making, and control (Farmer, Richman, & Ryan, 1966). Because each organization and situation is unique, one management or leadership style may not be appropriate for governing all situations; however, any particular theory can be applied universally across an organization (Callaway, 1999). Systems and contingency theories are examples of two management theories that can be applied universally across an electronics organization to facilitate a productive outcome in virtually any situation.
Systems thinking has been identified as a powerful tool in the electronics and IT field, and is "more widely used as the foundation for managing processes related to innovation and technology" in recent years, because it allows an interdisciplinary approach to management that combines multiple management paradigms into one (Currie & Galliers, 1999, p. 5). It is popular and effective, and allows managers to work with multiple teams possessing various skills and abilities to reach a common ground regarding organizational practices and issues.
A contingency theory approach, though less widely used, is often a model adopted by technologically oriented firms because it allows clear and independent identification of concepts and structures within the organization (Currie & Galliers, 1999). Contingency theory utilization, however, may be more limited with regard to knowledge sharing and knowledge management (Thierauf, 1999) — an important and vital element of any technologically oriented organization. When there are no integrating activities involved in a particular decision, and when an organization is highly specialized rather than diversified, contingency management might prove more beneficial as a management approach, since managers are not obligated to anchor themselves in core competencies or follow specific objectives (Mailick & Stumpf, 1998; Donaldson, 2001). Contingency management may, in fact, afford managers greater flexibility in the short term.
"Argues for a blended, multi-theory management approach"
"Recommends simultaneous use of both theories"
Always verify citation format against your institution’s current style guide requirements.