Sample Concepts

Sample concepts from last year:

1)      Contingency Theory

Contingency Theory states that organizations can be best adapt to the demands of the environment if their internal features match these demands. They are contingent on their environment. Uncertain environments filled with much change create different constraints and opportunities than placid environments. If the environment is more varied, individual subunits may be more differentiated. The structure, according to Lawrence and Lorsch, of each subunit should be suited to specific an environment to which it relates and the differentiation of the entire organization to match the overall complexity of the environment.

Satisfice (p. 114) – To settle for acceptable as opposed to optimal solutions, to attend to problems sequentially rather than simultaneously, and to utilize existing repertories of performance programs whenever possible rather than developing novel responses for each situation.

This concept is used by March and Simon as a way to simplify decision making in organizations. Some environments pose levels of complexity that organizations cannot manage unless they introduce simplifying restrictions on the information processed. This idea is found in relation to Lawrence and Lorsch’s contingency theory. This theory says there is no one best organizational form but many, and how well it performs is based on how well the organization’s form is related to the environment.

The idea of “satisfice” originally seemed like a cop out way to deal with problems, but after a little more thought, it seems necessary in some situations. When an organization has to deal with a very volatile environment it may be to difficult to think about coming out running rather than just getting through the unstable situation. I think that if Enron had taken this approach, rather than continually trying to impress Wall Street, the might have had a chance to avoid the complete destruction.


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