MGMT 370 Lecture Notes 1.26.10 Contingency Theory Argues that there are no universally applicable management theories or techniques What you do ?depends? on the situation Internal contingency factors External contingency factors Internal Contingency Factors Purpose?can?t manage all things the same way. You would run the United Way differently than you would the Marine Core Structure?Some organizations are set up bureaucratically, others based on teamwork Technology?automated vs. by hand calls for different techniques People?can do vs. will do manage differently Tasks?Manage repetitive tasks differently than a law firm External Contingency Factors Socio-Cultural Factors?Consumer taste, anything related to demographics Political/Legal?Oil business in Bolivia different from that in the US, party in power affects things Ways government regulates Laws?ADA Agencies (SEC, etc) Government as a consumer (Lockheed Martin) Government as a promoter?sets up agencies that helps entrepreneurs, tariffs on imported goods Government as an owner of business (bail-outs) Economic Factors? Macro Interest rates Money Supply How easy it is to get credit Micro Supply of Labor Technological Factors Kodak has to transition into digital age How Organizations Deal with their Environments General?take as a given Task Environment React or Proact Anticipation or Influence Task Environment Strategies Competitive Strategies Pricing?designed to get you in a better fit with environment, competitive pricing undercuts competitors Promotions?Create different image than the competitors Production?Demand smoothing?instead of a production schedule tat follows a seasonal demand schedule, have a constant output then stockpile the product, reduces cycle time Cooperative Strategies Cooptation?absorption of uncertain environmental elements?buy out your suppliers, gain control Bargaining?haggling with external environment may be over price of materials or terms of contract Joint Ventures (Coalitions)?Cooperate with a competitor to do something you couldn?t do alone, either too costly, or too risky to take on alone Lobbying?trying to exert direct influence on another party Representation?A company would send its boundary spanners out into the community to take on duties (golf tournaments) this is to raise goodwill to make later ventures Socialization?An education process?sending the word out that youre a good company. Getting your mission statement out Ex. Budweiser?Drink Responsibly Domain Shifts?Move into a different are of doing business
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