The best way to view organizational behavior is through a contingency approach.” Build an argument to support the statement”.

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Department of Business Administration.
Assignment no.02
Organizational Behavior (565)
Submitted To
Most Respectable,
Prof.Qasim Raza
Submitted By
Engr.Waseem Saeed
Roll AD-512530
Semester 3’ rd
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD,
PAKISTAN.
Spring 2010

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DEDICATION
I dedicate it to my beloved parents and respected teachers.

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ACKNOWLEDGMENT
All praise and thanks is due to ALLAH, the Lord of
mankind and all that exists, for His blessings, benevolence, and
guidance at every stage of our life.
I am deeply grateful to my course coordinator, Prof.
Qasim Raza, for his guidance, support, and patience. He has been
an invaluable source of knowledge and has certainly helped
inspire many of the ideas expressed in this assignment.
My words will fail to express my deepest heartfelt
thanks to my family, especially my parents & my Cousin, for all
what they did, and still doing, to help me be at this position and
for their continuous support and encouragement. Any mistakes
that remain are mine! I thank you all.

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The best way to view organizational behavior is through
a contingency approach.” Build an argument to support
the statement”.

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ABSTRACT
In this case study, I extend a contingency perspective of
international marketing in an exporting context by considering how
internal and external forces of the firm explain adaptation of the marketing
mix in export markets. The impact of marketing strategy adaptation and
past performance satisfaction on current period satisfaction with
performance is also considered. A survey of over 100 export managers
indicates that external forces play a greater role in explaining marketing
strategy adaptation than do internal forces. Moreover, satisfaction with
performance improvement in the current year is affected.
(i) Directly by the internal forces of the firm,
(ii) Indirectly by external forces,
(iii) Both directly and indirectlyby satisfaction with the
preceding year’s export performance. Implications for the
managementof exporting relationships alsoare discussed.
The contingency approach to managementviews the
organization as a set of interdependentunits operating in an open system.
It differs from all other managementapproaches, though, in that it is based
on the idea that every organization and situation is unique. Its situational
perspective implies thatthere is no single bestway to manage. Therefore,
specific techniques and managerialconcepts must be applied in different
ways and in differentcombinations to achieve organizationalor
departmental effectiveness.

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TOPIC OVERVIEW
In very general terms, the objective of this case study is to
provide a conceptual and empirical understanding ofthe structure and
function of human behavior in organizations. Itry to explore behavioral
influences which affect productivity, organizationaleffectiveness, and
efficiency. We will look at such things as perception, motivation, decision
making communication,leadership, job and organizational design,and
group behavior, as well as exploring a variety ofother topics as they relate
to the administrative process, including organizational power, politics,
change, and development.
In a general sense, the goal of this case study is to both
simplify and complicate our picture of organizationalbehavior to simplify
by systematizingand inter relatingsome basicideas, and to complicate by
pointing out the infinite shades of gray and the multitude of interacting
variables thatcan occur in a behavinghuman organization.
In fact, the contingency theory has been described as a sort of
amalgam of all other ideologies. Its chief contribution to modern
managementtheory is its identification of critical internal and external
variables thataffect managementprocesses.

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TOPIC OBJECTIVES
Upon the successful completion of this case study, you will be able to
understand and appreciate the systems approach as applied to human and
organizational behavior.
(i) Identify the role of personality and perception in affecting behavior
in organizations.
(ii) Criticallyexamine a number of traditional and contemporary
approaches to work motivation.
(iii) Increase your awareness of the potent role of groups in organizations
and how they impactperformance.
(iv) Review the current state of knowledge with respect to leadershipand
leader behavior.
(v) Examine the importantvariables in individualand groupdecision
making and problem solving.
(vi) Understand the pervasiveness and importance of communication in
all aspects of the Organization’s functioning.
(vii) Evaluate a number of differentapproaches to job and organizational
design.
(viii) Take a look at some contemporary issues and approaches
organizational change and Development.

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TABLE OF CONTENTS
Introduction
1. Contingency Approach Defined
2. Conceptual model of the contingency approach
3. Concise description of contingency theory
4. Four importantideas of Contingency Theory
5. The FunctionalistView of Contingency Theory
6. Contingency Planning
7. Essential Elements of a Contingency Plan
8. Barriers to Contingency Planning
9. Implementing a contingency plan.
10.How to Write an Effective Contingency Plan for your Organization
11.Steps for creating a contingency plan
12.Contingency Approach to Management
13.Factor Effecting on Contingency approach in organization
14.Advantages of contingency approach

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Case Study
1) Introduction of UBL
2) History
3) Our Mission & Vision
4) Services
5) Contingency Planning of UBL Bank
6) Steps for Contingency Planning
7) SWOT Analysis
8) Conclusion

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INTRODUCTION
The contingency approach to managementis based on the idea that
there is no one best way to manage and that to be effective, planning,
organizing,leading,and controlling mustbe tailored to the particular
circumstances faced by an organization. Managers have always asked
questions such as
 What is the rightthing to do?
 Should we have a mechanisticor an organicstructure?
 A functional or divisionalstructure?
 Wide or narrow spans of management?
 Tall or flat organizationalstructures?
 Simple or complex control and coordination mechanisms?
 Should we be centralizedor decentralized?
 Should we use task or people oriented leadershipstyles?
 What motivationalapproaches and incentive programs should we
use?
The contingency approach to management(alsocalled the situational
approach) assumes that there is no universal answer tosuch questions
because organizations, people, and situations vary and change over time.
Thus, the rightthing to do depends on a complex variety of critical
environmentaland internal contingencies.

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CONTINGENCYAPPROACH DEFINED:
 Also sometimes called the situationalapproach.
 There is no one universally applicable set of management
principles (rules) by which to manage organizations.
 Organizations are individually different, face different
situations (contingency variables), and require differentways of
managing.
CONCEPTUAL MODEL OF THE CONTINGENCY APPROACH:
According to this model, the formal structure of an organization
defines the roles of its members in a specific way and thereby directs their
behavior to a certain degree. The performance of the organization depends
on the degree to which these role definitions enable members to cope with
the requirements resultingfrom the context of the organization.For
example if there is strong competition and a high degree of technological
change, decisions about new products and marketingstrategies have to be
changed frequently and be taken close to the market.
A formal structure with a high degree of centralization, specialization
and formalization would not fit to the requirements resulting from this
situation; rather roles defined by a low degree of these structural
dimensions would enable members toact in the required flexible way.

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The method to analyze and assess these kinds of relationships is the
comparative quantitative analysis; in the most advanced stage a multi-level
quantitative analysis, assigningdata to the level of the context, the
organization and its members. These variables are operationalzedin
quantitative indicators, and data are collected by standardized
questionnaires distributedto several members ofeach organization under
investigation and afterwards aggregatedto different
However, the basicidea of the situational contingency of a particular
object on its context as well as the idea that the performance of an
institution depends on the fit between its properties and its relevant
context is still valid and of greatheuristicvalue as it suggests the critical
examination oftoo early generalizations and asks for situational
differentiation.

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CONCISE DESCRIPTION OF CONTINGENCY THEORY:
There are many forms of contingency theory. In a general sense,
contingency theories are a class of behavioral theory that contends that
there is no one best way of organizing/ leadingand thatan organizational
/ leadershipstyle thatis effective in some situations may not be successful
in others. In other words: The optimal organization, leadershipstyle is
contingent upon various internal and external constraints.
Fourimportantideasof contingency theory are:
1. There is no universal or one best way to manage
2. The design of an organization and its subsystems must 'fit' with
the environment
3. Effective organizations notonly have a proper 'fit' with the
environmentbut alsobetween its subsystems
4. The needs of an organization are better satisfied when it is
properly designed and the managementstyle is appropriate
both to the tasks undertaken and the nature of the work group.
There are alsocontingency theories that relate to decision making.
According to these models, the effectiveness of a decision procedure
depends upon a number of aspects of the situation: the importance of the
decision quality and acceptance; the amount of relevantinformation
possessed by the leader and subordinates;the likelihood thatsubordinates
will accept an autocratic decision or cooperate in trying to make a good

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decision if allowed to participate; the amount of disagreementamong
subordinates with respect to their preferred alternatives.
An expanded view of contingency theory is that the structure of an
organization depends on the company's technology and environmentand
the effectiveness of the managementaccounting system is contingenton
the organization's structure.
The location of information in relation to technology and environment
has an importantinfluence on organization structure. In uncertain
environments with non-routine technology, information is frequently
internal. Where environments are certain, or where technology is routine,
information is external.
The dimensions of structure and control include authority structure
and activities structure, i.e., rules and procedures that determine the
discretion of individuals. Authority relatesto social power. In the
contingency model, decentralizedauthority is more appropriate where
uncertain environments or non-routine technology exist. Centralized
authority is more appropriate when environments are certain. The graphic
illustration below reflects my interpretation of these theoretical concepts.

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The FunctionalistView of Contingency Theory:
Contingency theories from a functionalistperspective where the
assumption is that managementcontrol systems are developed, or adopted
to aid in achieving desiredorganizational goals and outcomes. The
appropriate managementaccounting system is contingent on the external
environment, technology, organizational structure, organizational size,
organizational strategy and nationalculture. The graphicbelow illustrates
this functionalistperspective.

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The Importance of Contingency Plans
Contingency Planning:
A contingency plan is a plan devised for a specific situation when
things could go wrong. Contingency plans are often devised by
governments or businesses who want to be prepared for anything that
could happen.
Business and governmentcontingency plans need to include
planning for marketing to gain stakeholdersupport and understanding.
Stakeholders need to be kept informed of the reasons for any changes, the
vision of the end resultand the proposed plan for getting there. The level
of stakeholders' importance and influence should be considered when
determiningthe amount of marketing required,the timescales for
implementation and completion, and the overall effectiveness of the plan.

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If time permits, input and consultation from the most influential
stakeholders should be incorporated into the building of any contingency
plan as without acceptance from these people any plan will atbest
encounter limited success.
The goal of Contingency Planning is to mitigate business risks due to
a mission critical functional failure caused, directly or indirectly, by non-
complianthardware or software, vendor, package, embeddeddevice,
supplier or external interface or environment. With little time left,
companies must quickly solidify backupstrategies for business units and
technical teams.
Managementis discovering, however, thatcontingency planning is
not necessarily intuitive. One financial institution describedthe process as
a "tail chasing" exercise because they could not determine where various
aspects of the plan began or ended. It is important, therefore, to understand
how your organization can build contingency plans that are both
comprehensive enough to deal with impending issues, yet practical enough
to be clearly articulate and applied.
Contingency planning addresses all aspects of a given year 2000
failure across an enterprise. These failures may include technology failures,
power outages and the inabilityof customers to acquire products or
services. Planning teams must accommodate the upward, downwardor
lateral ripple effect of any failure thatof a critical business function,
regardless of that failure originates.

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Contingency planning is a non-linear process that cannot be
performed by a single task force or business or business unit. The planning
process must rather be approached as a centrally coordinated,yethighly
distributed series of facilitation exercises. In order for managementto
successfully initiate a contingency planning project, they must incorporate
two key sets of deliverables;the bottom-up, tactical portion of the plan and
the top-down, business-driven component of the plan.
The bottom-up process assesses tactical impacts of a system
problem, project overrun, and data interface error or supply chain
interruption. Project teams may alreadyby buildingbottom-up
contingency plans to deal with localized year 2000 failures. Butbottom-up
planning does not consider business-driven priorities,revenue continuity,
enterprise-wide impacts or the ripple effect of a system or supply chain
failure. This is where top-down planning comes into play.
Top-down contingency planning deals with failures in mission
critical functions and the abilityof business units to work around or
contend with those failures to ensure business continuity. This process,
which readies businesses for potential interruptions in ongoing operations,
should be deployed across various business units, infrastructure
(telecommunications, power, facilities, etc.) teams and executive
committees.

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ESSENTIAL ELEMENTS OF A CONTINGENCY PLAN:
The essential elements of a contingency plan include determining
functional criticality, planned mitigation strategies, failure scenarios,
failure probabilities, contingency losses, contingency options, contingency
costs and trigger dates. Each of these planning elements should be
included for each contingency that is linked to a mission critical function,
system, supplier or data interface within an enterprise.
Criticality analysis involvesranking the importance of a function,
system, supplier or interface on a one-to-five scaling (with 5 being most
critical)and buildingcontingencies for high priority items. Current
mitigatingaction should be considered as a way of determiningthe
likelihood ofa failure. In other words, if the currentplans to marginally
test a system, the odds of a problem are likely to be high. Failure
identification requiresthatbusiness unit and technical subject matter
experts perform "what if" analysis on key functions, suppliers and
technologies in their areas. There can be one or more failure scenarios
assigned to a given business function, supplier or technology and each one
of these scenarios may require a contingency plan.
Once a failure scenariohas been identified, analysts can assess the
likelihood or probabilityof a failure using a one-to-five scaling strategy.
Once these factors have been assigned, analysts can multiply contingency
failure probabilities by a functional system or supplier criticality factor as a
way to prioritize contingencies. Contingency loss analysis determinedhow
much a failure would ultimately cost an organization. Notall losses can be

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translated intoa cost figure, but most failures have a monetary impact.
Analysts can then calculate the cost of the contingency plan and compare it
to the projected contingency loss as a way to weed out plans that are not
cost justifiable.
The contingency plan itself outlines how a business or technical
unit can mitigate the impactof a failure. Analysts mustalso assign a
projected trigger date to each contingency to signify when they anticipate
invoking the plan. Pre-2000 contingencies, which could include stockpiling
parts or shutting down a plant, may have specific dates assigned tothem.
Post-1999 plans, on the other hand, are typically invoked when a problem
becomes apparent. As plans are invoked, contingency coordinators, using a
relationaltrackingdatabase thatcontains the totality of all contingency
plans, can record the invocation of a plan and share this data with other
area within the enterprise.
The importance of beginning contingency planningnow is critical
because certain plans may need to be invoked before the year 2000 arrives.
If you are just starting out, focus on mission critical systems, suppliers and
business units as a top priority. There is no time to waste, but be judicious
and avoid sidestepping essential planningrequirements.

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BARRIERS TO CONTINGENCY PLANNING:
The following pitfalls have resulted in ill-timed responses to
narrowly definedproblems, unusable piles of paper and the inability to
successfully launch a contingency planning program.
Limited businessunit participation:
One of the most difficulttasks in launching a contingency planning
initiative is getting the attention of business people that believe the year
2000 should by handled by technical people. The incentive that
managementshould assume that when they arrive atwork on January 3,
2000 thatthey would have no access to systems personnel or to suppliers to
help fix year 2000 problems.With this thought as a backdrop, business
analysts can begin to craft a series of backupplans for critical business
function under their domain.
Overemphasison preventativeversusfuture planning:
Preventative planningis a good idea, but is not the name of the
game when the year 2000 arrives. Companies musthave a finely honed,
integrated strategyto maintain a functioning business environmentwhen
failures do occur. This means that managementwill be able to react to
functional, system or supply chain failures so that those failures do not
result in large-scale losses or the inability tofunction as a business entity.

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Inadequatefunding:
Most organizations setaside limited funds for contingency
planning in 1998 and, ifthey were reasonablyprepared, setaside
additionalfunds for 1999. This means that middle managers and direct
reports to the CFO and CIO will be cutting corners at a time when they can
leastafford it. Contingency planning and invocation funding must be set
aside now and reflect contingency requirements intoand beyond the year
2000.
Considering narrowly defined year2000failure impacts: Some
organizations are buildingtactical plans to fend off a system failure here or
a corrupt data input there. Other companies are focusing solely on business
continuity to developoptions for a business unit in crisis. The biggestrisk
is that piecemeal planning, being performedby segregatedteams, does not
fully reflects the breadth of contingencies that must be deployed from
across an organization. Managementcan only deliver integrated
contingency plans by linking tactical failures tostrategicimpacts and vice
versa via a central contingency managementteam and planning repository.

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Some things you should think about when developing — and
implementing — a contingency plan.
1. Whose gotyourback?
If you’re working with a team, as long as you keep them well-
informed, team members are often in the ideal position to take over a
project for you while you’re out of commission. If you are working solo,
however, you may not have identified someone to help take over your
workload ata moment’s notice. Choosing this person presents some
obvious challenges because, technically, the person who mightbest know
how to handle the things you do is potentially alsoyour competition. You
need to find someone who is experienced and savvy enough to keep
projects afloatbut not necessarilysomeone who could easily replace you in
the eyes of the client. The key is to pick someone you trust to best represent
you and your interests. Tapinto your most solid relationships to identify
this person.
2. Whatwill they do?
When you are working on projects for clients, get in the habitof
documenting whatyou are doing and any relevantresources, contacts and
timelines. Determinewhattasks are mission critical to keep the project
moving forward and the clienthappy while you’re away. Developa list of
main tasks for each clientproject.

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3. How will you prepare them?
You should touch base with your point person often enough to
keep lines of communications open and the relationshipstrong. You may
want to provide them with access to a with your listof tasks so they can
familiarize themselves with the work without giving awaytoo much detail.
This would be your guide and reference document if you were caught in
an emergency and needed to relay directions tothem quickly.
4. How will you notify and prepare clients?
When you are planning for an absence — such as a pregnancy and
birth — you can communicate and prepare for your absence far enough in
advance to build client confidence. But whatif you’re in a car accident?
Sure, the client will tell you, “don’t worry, we’ve got it covered until you
get back on your feet,” but they have their own bottom line to consider.
Being able to trigger your stand-in immediatelyand letthe client know this
person is “working with you” to handle things in your absence is not only
a good confidence builder butcan help you hold on to the client.
5. Whatare the risks?
With anything in business, there is a risk of losing business when
something happens to you. Even bringing in a trusted stand-in could result
in the clientdeciding to go with that person in the future instead of you.
Business is all about relationships and trust. There is no way to prevent
client attrition — not even with seemingly bindingcontracts. Some of the
most importantaspects of business are to have open communication with

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your client and a relationshipbased on mutual respect and trust. With
open communications, even difficult decisions can be made mutually and
without burning bridges.
6. How will you hand offthe work?
While you probably don’tneed to do an actual drill to run through
the steps of handing off clientprojects to someone else during a crisis, you
should clearly communicate whatthey should do and how they can access
critical files and information to take over in your time of need. Thatcould
include giving them access to a shared file system such as drop.ioor Drop
box as needed. And what if something really badhappens — like you’re in
a coma? How can they help handle things, and who in your family should
they stay in touch with for updates?
7. How will you getit back?
Clearly communicate how projects will be transferred back toyou
when you’re ready. There may be some transitioningtime to get you back
up to speed with developments, especially ifyou’ve been out of
commission for a while. Realize thatthis transition could be emotional for
you as you are eager to get back into the swing of things, but mightjust
need some time to process everything.
8. Giving it up.
In some extreme cases, you may have to make the decision to give up
the client. This should be a decision discussed directly with your client to
find a mutually agreeable and professional manner in which to part ways.

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The logical nextstep mightbe to give the clientwork to your stand-in or
the clientmightwant to put the project up to bid again or work with
someone else. The wisestthing to do in this situation is to make the
decision that is best for your well-beingand the well-beingof the
relationshipyouhave with the client. Keeping relationships strong and
intact will work well for everyone in the long run.
When you are working on your business contingency plan, put
everything in writing,not just for your own reference but to make sure you
are on the same page with the person who will act as your stand-in. Some
may advise consulting a lawyer todraw up a contract that covers the
details of the business relationshipbetween you, your stand-in and your
clients. Regardless, havingthe process in writing can help to temper
expectations on all sides.
When I took a six-week maternity leave,I fully expected to
continue to work on a reduced schedule within the first few weeks post-
partum. I was taken aback to find that not only was I unable to do this, but
that my doctor strongly recommended thatI take off three months to
recover after a number of unexpected complications. I didn’thave a
contingency plan in place and lost thousands of dollars of income. Luckily,
I had excellent relationships with my clients, and all of the jobs were still
there when I got back on my feet. Today, I’m even luckier to have a virtual
team who can pick up the slack if anything were to happen, all of them
people whom I trust implicitlyto do the rightthing.

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How to Write an Effective Contingency Plan for your Organization
At first pass, your organization's contingency planningand testing
seems time-consuming and non-value added.
It also seems pessimistic: planning worst-case scenarios can be depressing
work when most folks would rather be entering the future with a spiritof
optimism.
However, the very process of contingency planning can get an
entire organization positivelythinking about the importance of various
business systems. In a fast-paced environment, contingency planningcan
lead to implementingbetter systems and processes overall.
Late last century, the Y2K hysteria underscored the urgency for
contingency planning. Today, mostquality driven organizations willhave
a contingency plan and contingency planning process. Why?
1. You need to effectively deal with a rapidly changing business and
technology environment
2. You need to understand and document the business processes that
are vital to your company's business.
Bottom line? An organizationalcontingency plan can reduce business risk.
A solid procedure can make contingency planning a manageable and
positive experience that produces a workable plan.

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STEPS FOR CREATING A CONTINGENCY PLAN
First, senior staff needs to decide who the lead for contingency
planning is. Usually a StrategicPlanning or Quality departmentmanageris
best suited for this task. A contingency plan is a requirementfor many
quality systems - you may wantto go to your Quality Departmentfor
guidance on plans or processes that are alreadyin development.
The company-wide contingency plan leader provides tools, skills and
a knowledge base so that each departmentcan write its own contingency
plans. (A common misconception is that the contingency plan leader should be
writing all contingency plans. This would be near-impossible: subject matter
experts closest to the system have the best working knowledge, and
therefore are best suited to writing and brainstorming with their
department.)The leader's key functions are to provide a common means
for writing and reporting; to train; to set deadlines;to promote enthusiasm
and to mentor.
For example, there are many ways to write and store plans. Many
templates and databases are available for an organization. The lead decides
how plans are organized:
Will the organization use a similarsetof folders?
A database?
A special network drive?
The intranet?

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The company-wide lead providesthe organization with common tools and
training sothat everyone is following a similarprocess that produces a
standardized plan.
CONTINGENCY (SITUATIONAL) APPROACH.
COMPARISION WITH OTHER THEORIES
Introduced in 1967, Fiedler's contingency theory was the first to
specify how situational factors interactwith leader traits and behavior to
influence leadershipeffectiveness. The theory suggests that the
"favorability" of the situation determines the effectiveness of task- and
person-oriented leader behavior.
Favorabilityis determined by
(1) The respect and trust that followers have for the leader;
(2) The extent to which subordinates' responsibilities can be structured and
performance measured;
(3) The control the leader has over subordinates' rewards. The situation is
most favorable when followers respect and trust the leader, the task is
highly structured, and the leader has control over rewards and
punishments.

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Fiedler's research indicated that task-oriented leaders were more
effective when the situation was either highly favorable or highly
unfavorable, butthat person-oriented leaders were more effective in the
moderately favorable or unfavorable situations. The theory did not
necessarily propose that leaders could adapttheir leadershipstyles to
differentsituations, but that leaders with differentleadershipstyles would
be more effective when placed in situations that matched their preferred
style.
Fiedler's contingency theory has been criticized on both conceptual
and methodological grounds. However,empirical research has supported
many of the specific propositions of the theory, and it remains an
importantcontribution to the understanding ofleadershipeffectiveness
Comparison of contingencytheory with system theory
Contingency Theory SystemsTheory
The contingency approach to
managementis based on the idea
that there is no one best way to
manage and thatto be effective,
planning, organizing, leading,and
controlling must be tailored tothe
particular circumstances faced by an
organization. Managers have always
A central theme of systems theory is
that nonlinear relationships might
exist between variables.Small
changes in one variable can cause
huge changes in another, and large
changes in a variable mighthave
only a nominal effect on another.
The concept of nonlinearity adds

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asked questions such as "What is the
rightthing to do? Should we have a
mechanisticor an organicstructure?
A functional or divisionalstructure?
Wide or narrow spans of
management?Tallor flat
organizational structures?Simple or
complex control and coordination
mechanisms?Should we be
centralizedor decentralized?Should
we use task or people oriented
leadershipstyles?What
motivationalapproaches and
incentive programs should we use?"
The contingency approach to
management(alsocalled the
situational approach)assumes that
there is no universal answerto such
questions because organizations,
people, and situations vary and
change over time. Thus, the right
thing to do depends on a complex
variety of critical environmental and
internal contingencies.
enormous complexity to our
understandingof organizations.In
fact, one of the most salient
argumentagainstsystems theory is
that the complexity introduced by
nonlinearitymakes itdifficultor
impossible to fully understand the
relationships between variables
Understandinghow our actions
shape our reality. If I believe thatmy
current state was created by
somebody else, or by forces outside
my control, why should I hold a
vision?The central premise behind
holding a vision is that somehow I
can shape my future, Systems
thinking helps us see how our own
actions have shaped our current
reality, therebygivingus confidence
that we can create a differentreality
in the future

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Path-goaltheory proposes that subordinates' characteristics and
characteristics of the work environmentdetermine which leader behaviors
will be more effective. Key characteristics ofsubordinates identifiedby the
theory are locus of control, work experience, ability, and the need for
affiliation. Importantenvironmentalcharacteristics named by the theory
are the nature of the task, the formal authority system, and the nature of
the work group. The theory includes four differentleader behaviors, which
include directive leadership, supportive leadership, participative
leadership, and achievement-oriented leadership.

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According to the theory, leader behavior should reduce barriers to
subordinates' goal attainment, strengthen subordinates' expectancies that
improved performance will lead to valued rewards, and provide coaching
to make the path to payoffs easier for subordinates. Path-goaltheory
suggests that the leader behaviorthatwill accomplish these tasks depends
upon the subordinate and environmentalcontingency factors.
Path-goal theory has been criticized because itdoes not consider
interactions among the contingency factors and alsobecause of the
complexity of its underlyingtheoretical model, expectancy theory.
Empiricalresearch has provided some support for the theory's
propositions, primarilyas they relate to directive and supportive leader
behaviors.
NaturalSelection or Ecology Theory:
Ecology theories draw on Darwin’s theory of natural selection to
explain the persistence of certain organizationalforms. Organizations
whose structures are not fitted to the environmentwill not perform well
and will die-out. Indeed, most new organizations fail within the first few
years. Successful organizations provide models to other organizations as to
what a survivalform looks like. Therefore, successful forms are imitated
and become the dominantstructural type. Structures, then, are hard to
change. There is a structural inertia to change that maintains the existence
of structural types and limits the successful adaptation of a new form.

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Resource DependencyTheory:
A problem with the ecology theory is that it may explain why
existing firms tend to all look like one another – they imitate the form of
successful firms – but, it offers little insightas to how a successful structure
arises. The resource dependency view is that organizations adaptto
environmentalresources. Organizations developa capabilityor
competency to do something: 3-M makes innovative uses of adhesives and
Disney is a top entertainmentfirm. Todevelopa competency the
organization notonly must develop internal resources, but it is dependent
upon external resources. These include labor markets, customers,
suppliers, financial markets,and other stakeholders and economicfactors.
This dependency has implications for how organizationalstructure. Most
resource dependency theorists link structure to environmental factors. For
example, under conditions of scarcity, organizations try to conserve
resources by implementing greatercontrols through hierarchy,
centralization, and formalization. These controls are relaxed in a
prosperous environment.
InstitutionalTheory:
This approach is now in vogue. In many ways the institutional
approach accommodates the other process theories with currentinterest in
culture and “ideational” systems (the way we think about and understand
the outside world). Organizations are social inventions – we make them
up. The models available for this are based on our experience and whatwe
teach and write aboutorganizations. Banks look the way they do because

35. 35
there is a dominant, accepted view of what a “bank” ought” to look like.
Although higher learning could be configured in alternative forms,
universities have historicallycome to pretty much look like one another –
we have a cultural and institutional agreement on whatthey ought to look
like. And, if I saw Sam’s Universityoperating from an e-mail address and
website, I would know that this is not a “real”university - maybe some
form of distance learning,which today is not as valued culturallyas a
higher education.
Institutions do change. An entrepreneur or innovator tries some
new form. The new form competes with old forms for acceptance. Usually
with success, and sometimes simply through perseverance, novel forms of
organization dobecome institutionalized. Consider the way we organize to
deliver movies: the historical institution is derived from traditionaltheater;
but, in the 1950’s people would see movies seated in their cars at a drive-in
movie. Today, movies are deliveredto homes via pay-per-view. The
institutional perspective suggests that there may be many ways to organize
but some forms are accepted, others are not. Why forms are rejected and
others are accepted can be explained by social values and by the economics
of organizational forms. I suspect that we see few drive-ins today because
movies are made to exploit the technologies available through the theater
experience (which we value) and because it is simply more efficient (less
costly) to show multiple screenings in small rooms than to bear the costs of
land to construct a large drive-in a city. People stopped going to drive-ins,
business stopped buildingdrive-ins, and the dominantway to “correctly”

36. 36
organize a movie today is the theater. The same logicapplies to other forms
of institutions and organizations
Table. Comparison ofsix contingency theories
Contingency
Theory
Leader Traits Leader Behavior Situational
Variables
Intervening
Variables
Validation
Results
Path-Goal
Theory
None Instrumental,
Supportive,
Participative,
Achievement
Many aspects Expectancies,
Valences, Role
Ambiguity
Many Studies,
some support
Leadership
substitutes
Theory
None Instrumental,
Supportive
Many aspects None Few Studies,
inconclusive
Multiple
linkage model
None Many aspects Many aspects Effort, ability
organization,
teamwork, resources,
external coordination
Few Studies,
inconclusive
LPC
Contingency
Model
LPC None Task
Structure, L-
M Relations
None Many studies,
some support
Cognitive
Resource
Theory
Intelligence,
Experience
Directive Stress Group
Support
None Few studies,
some support
Normative
Decision
Theory
None Decision
Procedures
Many aspects Decision Quality and
acceptance
Many studies,
moderate
support

37. 37
CONTINGENCYPERSPECTIVE AND ORGANIZATIONTHEORY
Environmental change and uncertainty, work technology, and the
size of a company are all identified as environmentalfactors impacting the
effectiveness of differentorganizational forms. According tothe
contingency perspective, stable environments suggestmechanistic
structures that emphasize centralization, formalization,standardization,
and specialization toachieve efficiency and consistency. Certainty and
predictabilitypermitthe use of policies, rules, and procedures to guide
decision making for routine tasks and problems. Unstable environments
suggest organicstructures which emphasize decentralization toachieve
flexibility and adaptability.Uncertaintyand unpredictabilityrequire
general problem solvingmethods for no routine tasks and problems. Paul
Lawrence and Jay Lorsch suggest that organizationalunits operating in
differing environments developdifferentinternal unitcharacteristics, and
that the greater the internal differences, the greater the need for
coordination between units.
Joan Woodward found that financiallysuccessful manufacturing
organizations with differenttypes of work technologies (such as unit or
small batch; large-batch or mass-production; or continuous-process)
differed in the number of managementlevels, span of management, and
the degree of worker specialization. She linked differences in organization
to firm performance and suggested that certain organizationalforms were
appropriate for certain types of work technologies.

38. 38
Organizationalsize is another contingency variable thoughtto
impact the effectiveness of differentorganizationalforms. Small
organizations can behave informallywhile largerorganizations tend to
become more formalized.The owner of a small organization may directly
control most things, but large organizations require more complex and
indirectcontrol mechanisms. Large organizations can have more
specialized staff, units, and jobs. Hence, a divisional structure is not
appropriate for a small organization butmay be for a large organization.

39. 39
The situationalleadership theory:
Was initiallyintroduced in 1969 and revised in 1977 by Hersey and
Blanchard. The theory suggests that the key contingency factor affecting
leaders' choice of leadershipstyle is the task-related maturity of the
subordinates. Subordinate maturity is defined in terms of the ability of
subordinates to accept responsibility for their own task-related behavior.
The theory classifies leader behaviors intothe two broad classes of task-
oriented and relationship-oriented behaviors. The major proposition of
situational leadershiptheory is that the effectiveness of task and
relationship-oriented leadershipdepends upon the maturity of a leader's
subordinates.
Situational leadershiptheory has been criticized on both theoretical and
methodological grounds.However, itremains one of the better-known
contingency theories of leadershipand offers importantinsights into the
interaction between subordinate abilityand leadershipstyle
Contingency Perspectiveand Leadership:
Dissatisfaction with trait-basedtheories of leadershipeffectiveness
led to the developmentof contingency leadershiptheories. Fred Fiedler,in
the 1960s and 1970s, was an early pioneer in this area. Various aspects of
the situation have been identified as impacting the effectiveness of different
leadershipstyles. For example, Fiedler suggests thatthe degree to which
subordinates like or trust the leader, the degree to which the task is
structured, and the formal authority possessed by the leader are key
determinants of the leadership situation.

40. 40
Task-oriented or relationshiporiented leadershipshould would each work
if they fit the characteristics of the situation.
Other contingency leadershiptheories were developed as well. However,
empirical research has been mixed as to the validityof these theories
Fiedler’s Contingency Theory of Leadership
 Leader’s style is an enduring personal characteristic that
is not easily changed
o Relationship Oriented
o Task Oriented
 Most effective style of leadership depends on the situation
o Leader-member relations
o Task structure
o Position power
 Must match leadership style to situation
Fiedler’s Contingency Theory of Leadership
 Situations vary in favorability for leading
o Leader-member relations (good-poor)
o Task structure (high-low)
o Position power (high-low)
 Used Least Preferred Co-Employee Scale
 Eight leadership situations (octants)

41. 41
Fiedler’s Contingency Theory of Leadership
 Task-oriented leaders are most effective in very favorable or
very unfavorable situations
 Relationship-oriented leaders are most effective in moderately
favorable situations
Fiedler’s Contingency Theory of Leadership
 Leaders mustbe assigned to situations in which they will be effective.
If that won’t work, the situation must be changed to fit the leader.
 Research provides some support for model but also suggest needs
modifying
Situational Leadership Model
 The style of leadershipshould be matched to the readiness (a situatio
nal Contingency of the followers
o Telling style
o Selling style
o Participating style
o Delegating style

42. 42
CONTINGENCY APPROACH TO CONFLICT MANAGEMENT:
The approaches to conflict management are often demonstrated by
a continuum of flight (moving away from the conflict) and fight (being
confrontational) at the extremes. Both extremes are inappropriate with a
win-lose orientation to conflict, which often lead to prolonged conflicts and
negotiation for the parties involved. As the contingency approach lies
somewhere between these extremes, it is seen as a more effective way to
conflict resolution. The contingency approach takes the view that "one" best
way of managingconflictunder all conditions does not exist, but that there
are optimal ways of managing conflict under certain conditions.
The contingency approach to diagnose conflicts and identified five styles of
conflict management. These management styles are identified as:
1. Avoidance is often a form of flight suggesting indifference,
evasion, withdrawal, or isolation. Avoidance is usually used
when the issue is trivialor when the costs outweigh the benefits
of resolution.
2. Compromise/sharing involves splitting the difference or giving
up something to get something. This may be appropriate when
the objectives are important, or when potential disruptions are
likely to result from assertive behaviour.

43. 43
3. Competition frequently means a desire to win at the other's
expense. It is a win-lose power struggle where the opinions and
interests of others are of little concern. This is practised in
situations when quick, decisive action is essential, as in
emergencies or when critical issues require unpopular action,
as in cost cutting.
4. Accommodation means a submission to others at one’s own
expense. On occasion, it can represent generosity, while atother
times; it might mean conserving energy and resources by
giving up a few battles in order to win the war. This is usually
when an individual wants to build good will for more
important matters and/or to minimize losses when defeat is
inevitable.
5. Collaborationrepresents a desire to fully satisfy the interests of
both parties. It is a mutually beneficial stance based on trust
and problem solving. A common practice in circumstances
when both sets of concerns are so important that only an
integrative solution is acceptable.
The five management styles are identified to help resolve
organization conflicts that usually stems from the senior management’s
attempt to meet organizational demands and on the other hand, trying to
balance the need to satisfy individual needs of the employees. A CEO can
apply the contingency approach to conflict management as explained
above within the organization when the need arises.

44. 44
The Contingency Approach BelievesThatIt Is Impossible To Select One
Way of Managing That Works Best In All Situations
The contingency approach believes thatit is impossible to select one
way of managingthatworks best in all situations like promoted by Taylor.
Their approach is to identify the conditions of a task (scientific
managementschool), managerial job (administrative managementschool)
and person (human relations school) as parts of a complete management
situation and attempt to integrate them all into a solution which is most
appropriate for a specific circumstance. Contingency refers to the
immediate (contingentor touching) circumstances. The manager has to
systematicallytry to identify which technique or approach will be the best
solution for a problem which exists in a particular circumstance or context.
An example of this is the never ending problem of increasing
productivity. The differentexperts would offer the following
solutions:
 Behavioral scientist: create a climate which is psychologically
motivating;
 Classical managementapproach: create a new incentive scheme;
 Contingency approach: both ideas are viable and itdepends on the
possible fit of each solution with the goals, structure and resources of
the organization. .

45. 45
The contingency approach may consider, for policy reasons, that an
incentive scheme was not relevant. The complexity of each situation should
be noted and decisions made in each individualcircumstance.
CONTINGENCY APPROACH TO MANAGEMENT:
The contingency approach to managementis based on the idea that
there is no single bestway to manage. Contingency refers to the immediate
contingent circumstances. Effective organizations musttailor their
planning, organizing, leading,and controlling totheir particular
circumstances. In other words, managers should identify the conditions of
a task, the requirements of the managementjob, and people involved as
parts of a complete managementsituation. The leaders mustthen work to
integrate all these facets into a solution that is most appropriate for a
specific circumstance.
The contingency theory is similar to situation theory in that there is
an assumption that no simple way is always right. Situation theory,
however, focuses more on the behaviors thatthe leader should use. The
contingency theory takes a broader view thatincludes contingent factors
about leader capabilityand alsoincludes other variables within the
situation.

46. 46
OB TAKES A CONTINGENCY APPROACH:
Just because people can behave differently atdifferenttimes doesn’t
mean, of course, that we can’t offer reasonably accurate explanations of
human behavior or make valid predictions. It does mean, however, that OB
must consider behavior within the context in which it occurs known as a
contingency approach. So, for example, OB scholars avoid stating that
effective leaders should always seek the ideas of their employees before
making a decision. Rather, we may find that in some situations a
participative style is clearly superior, but, in other situations, an autocratic
decision style is more effective. In other words, the effectiveness of a
particular leadershipstyle depends upon the situation in which it is used.
The OB scholar therefore tries to describe the situations to which each style
is suited.
Consistent with the contingency approach, Point/Counterpoint
debates are provided in each chapter. These debates are included to
highlightthe fact that within OB there are disagreements.By directly
addressingsome of the more controversial issues using the
Point/Counterpoint format, you gain the opportunity to explore different
points of view, discover how diverse perspectives complement and oppose
each other, and gain insight into some of the debates currently taking place
within the OB field.

47. 47
OB is a lively field and, like many disciplines,has disagreements
over specific findings, methods, and theories. Some of the
Point/Counterpoint arguments are more charged than others, but each
makes some valid points that you should find thought provoking. The key
is to be able to decipher under what conditions each argument may be
rightor wrong.
FACTOR EFFECTING ON CONTINGENCY APPROACH IN
ORGANIZATION
Organizational Design:
We tend to view organizinga matter of decision-making: we decide to
arrange the people, jobs, and positions that we have available to meet
management’s needs. But, there are real constraints on the forms of
organization available tous. Hospitals tend not to be structured like fast
food restaurants, and banks are notorganized like a manufacturing plant.
The task (or type of work to be done), the technology (the way we know
how to do something), and our knowledge of what has worked and what
does not work influence and limitour choice of organizational design.
The classictheorists, Taylor, Fayol,and Weber contributed to the
architectural perspective on organizations by focusing on their structural
attributes:
Three major contingency factors that affect organization designinclude
strategy, size, and technology. Strategy affects organization designin that
structure should change as an organization's strategychanges. Size affects
organization designbecause as organizations grow,they tend to become

48. 48
more formalized and bureaucratic. Finally,technology affects organization
design because the production process should fit with the type of
organization structure in order to be effective.

49. 49
Size:
Number of personnel, outputs (customers, sales), resources (wealth),
or capacity provides measures of an organization’s size. But, organizations
grow and the structure changes with increases in size. As organizations
grow there is a greater need to regain the coordination thatcould be
accomplished informally in a small group, and there is a tendency for
division of labor with more and more specialists and departments.
To achieve greater coordination, layers of managementmay be
added to create hierarchy.As hierarchy increases power becomes difficult
to concentrate at the top and there can be a distribution of power to lower
managers.Decentralization can occur as lower level managers assume
decision-making,butto retain some degree of standard operational
procedures, the organization increasingrelies on written policies and
procedures. This formalization of organizational rules helps to maintain
order across the growing organization and ensures conformity and
continuity in practices.
Also, with growth organizations begin to divide the work into
ordered units that perform specialized work. Increased specialization of
work into departments is termed differentiation.The extent to which an
organization is departmentalized, divisional,and hierarchicallylayered
characterizes the organization’s complexity.

50. 50
Span of Control:-
“How many employees can or should a manager oversee?” Thatis
the issue of span of control. Span of control has interesting implications for
work, how work is performed, and the organizationalstructure. A narrow
span of control describes a low number of workers under a manager. The
structure that is created is tall, or mechanistic. The tall pyramid structure is
created by the hierarchicallayering required tomaintain a low manager-to-
employee ratio. The tightsupervision inherentin the mechanisticstructure
is characteristicof bureaucracy. Work is performed under tight controls,
little variabilityof tasks is permitted, and there is high specialization or
departmentalization.
Technology/Task:-
The knowledge or technology of how work is to be performed affects
how we organize. Consider: If the work requires tightcontrols and can
tolerate few mistakes, such as the processing of checks at a bank, the
repetitive and mechanical work requires high formalization, specialization,
and division of labor. If the work is creative, such as Research and
Development, creativityis required and the organization is not formalized,
division of labor is not clear, and decision-making is highly decentralized.
Custom (small batch or job order):-
Production is in small quantities or one of a kind. Because the
product is novel or designed for a specific buyer or use, there is no
“standard”way for manufacturer. Custom technology relies on the skill,

51. 51
craftsmanshipand ability of the worker, therefore work supervision is not
helpful and there is no economy of scale. Examples include: tailored suits,
private yachts, artisticcreations.
Unit production/smallbatch:-
Companies that make one-of-a-kind custom products or small
quantities of products (e.g., ship building, aircraftmanufacture, furniture
maker, tailors,printers of engraved wedding invitation, surgicalteams).
 In these companies, typically, people's skills and knowledge is more
importantthan the machines used.
 Relativelyexpensive to operate: work process is unpredictable, hard
to pre-program or automate.
 Flatorganization (few levels of hierarchy).
 CEO has low span of control (directreports).
 Relativelylow percentage of managers
 Organicstructure
Mass Production (large batch):-
The manufacture of products for a mass marketrequires controls to
insure a standardize product. The assemblyline production can make plant
costs (fixed costs) high which are spread over large production to achieve
low unit costs. The skill level of a large labor force is low to keep variable
costs low, but this requires tightsupervision. Managementcontrols are

52. 52
importantto ensure no variations in the making of the standardized
product. Examples include:.
Mass production/large batch:-
Companies that sell huge volumes of identical products (e.g., cars,
razor blades,aluminum cans, toasters). Make heavy use of automation and
assembly lines. Typically,
 Bigger than small batch
 Taller hierarchies
 Bottom level is huge (supervisor span of control is 48)
 Relativelygreaternumber of managers (because hierarchy is so tall)
 Mechanistic, bureaucraticstructure
 Relativelycheapto operate
Continuous(process) Production:-
This technology is controlled by the manufacturing process itself and
requires little worker involvement. For example, oil refining intakes
continuous crude oil for transformation intopetroleum products Custom,
mass production, and process technologies are in Woodward’s work
“ideal”types, but are typical of certain industries. Successful firms, she
found, matched their technology base with the structural type illustrated at
the right. Other researchers have found similarresults to conclude that
there is an inverted U relationshipbetween use of technology and
structural complexity.

53. 53
Low level technology (Custom) requires an organicstructure; mass
production that combines labor resources with machines requires
mechanisticstructures; and, high level technology (production is
dependentupon machines)is matched with an organicstructure.
Continuous Production. Primarilycompanies thatrefine liquids and
powders (e.g., chemical companies, oil refineries, bakeries,dairies,
distilleries/breweries, electricpower plants). Machines do
everything; humans just monitor the machines and plan changes.
 These organizations are tall and thin or even inverted pyramid:
almostnobody at the bottom
 At the very top there is an organicstructure
Lower levels more mechanistic, butbecause machines do everything, there
is not much paper work, low level supervision, etc

54. 54
Strategy:-
For most of America’s business history firm’s produced a single
product for a local market. The organizational structure to support this
business strategy is the functional form. This simple form is organized
around a division of labor into specialized functions (or departments) that
interrelate to create, deliver and manage a product. This form is often
characterizedas organizing inputs for transformation into a single output.
Environment:-
The environmentrepresents factors outside the organization to
which managementreacts, rather than “manage there is a simple
correlation between environments and structure: organicstructures are
found in changing or dynamicenvironments; mechanisticstructures are
found in staticor stable environments. The interpretation of this
relationshipis that in dynamicenvironments, such as in the software
developmentindustry, organizations needs to promote creativity and
interpersonal communications for problem solving. Industries, such as
textile manufacturing, have staticenvironments, not much innovation and
not many changes to the way the product is made, and have mechanistic
structures. Tall, hierarchical structures afford the controls necessary to
manufacture a product that is well understood.

55. 55
Advantagesof contingencyapproach:
Contingency approachhelpsin programmed decision
The contingency approach recognizes that problems can be
categorized a number of different ways. Simon refers to problems on a
continuum from well-structured to ill-structured (Simon 1973:181).A well-
structured problem has identifiable procedures for its resolution: that is,
the problem, when confronted, has a known methodology to resolve it.
According to Mint berg, an ill-defined problem involves a task requiring
decision processes that have not been encountered in quite the same form
and for which no predetermined and explicitsetof ordered responses
exists. The contingency approach led theorists to differentiate between
programmeddecisions to handle well-structured problemsby providing
routine and repetitive procedures and non-programmeddecisions to
handle a problem requiring a unique solution. Rules and policies
predominate in programmeddecisions thereby providingmanagers with a
high degree of certainty aboutthe appropriateness of the solution. In
contrast, non-programmed decisions bringmanagers a high degree of
uncertainty and therefore risk. The problem therefore requires both
qualitative and quantitative solution methodologies to reduce the risk.
When a managersolves a problem in isolation the risk is higher
than when a manager enrolls others to assistwith the solution. The risk
may be reduced by a factor associated with the increased number of people
who participate in the problem solution. This is why some managersprefer

56. 56
to solve problems in a group situation. The advantagesof group problem
solving are:
 More complete information
 More alternatives are generated
 Acceptance of solutions are increased
 The legitimacy of the solution is increased.
The disadvantages of group problem solving are:
 Minorities can dominate (more powerful)
 Pressures to conform are applied by more powerful members
 Time consuming
 Responsibilityfor the solution is ambiguous.
The contingency approach has spawned two separate approaches to
problem solving: qualitative approaches and quantitative approaches.

57. 57
THE CONTINGENCYAPPROACHTO ORGANIZATIONDESIGN.
Classical views of organization design were thatthe ideal structural
design was a mechanistic/bureaucraticorganization. We now recognize
that the ideal organization design depends on contingency factors.
A. Mechanisticand organicorganizations. Twodiverse organizational
forms can be described.
1. A mechanisticorganization or bureaucracy is a structure that is
high in complexity, formalization, and centralization.
2. An organicorganization or adhocracy is a structure that is low in
complexity, formalization, and centralization.
B. Strategy and structure. Strategy and structure are closely linked, and
as strategy changes, the structure should also.
C. Size and structure. There is considerable historicalevidence thatan
organization's size significantly affects its structure.
D.Technology and structure. Every organization uses some form of
technology to transform inputs into outputs. Tworesearch studies on the
relationshipbetween technology and structure have been significant.
1. Joan Woodward found that three distinct technologies had
increasing levels of complexity and sophistication.

58. 58
a. Unit production describes the production of items in units or
small batches.
b. Mass production describes large-batch manufacturing.
c. Process production describes continuous-process production.
2. Charles Perrow looked at knowledge technology rather than
manufacturing technology. He proposed that technology be viewed from
two dimensions.
a. Task variability describes the number of exceptions individuals
encounter in their work.
b. Problem analyzability describes the type of search procedures
employees follow in responding to exceptions.
3. What's our conclusion? We can conclude that the processes or
methods that transform inputs into outputs differ by their degree of
routineness.In general, the more routine the technology, the more
standardized the structure can be.
E. Environmentand structure. Research has shown that environment
is a major influence on structure. We also know that mechanistic
organizations tend to be ill-equipped to respond to rapid environmental
change.

59. 59
The Top Ten Things You Need to Know About the Contingency
Approach
1. The contingency approach was broughtabout in the late 1950's after
thinkers who proposed that their approach was inflexible tofuture
changes and challengedthe managementprinciples of Henri Fayol and
Frederick Taylor.
2. Fred Fiedler, an early adaptor ofthe contingency approach suggested
that leadershipstyles would vary dependingon the situations they were
placed. For example the task they were given, the trust from subordinates,
and the authority granted to the manager.
3. Location of an organization is going to have adverse effects on the
management principles used. If a company decides to expand its reach
across the county it’s going to have to change the way it manages its people
and environmentfrom one location to the next.
4. Managementofan individual is alwaysgoing to be differentin terms of
what their idea of growth and exceptions are for themselves. Managers
will have to take that into account and then decide the proper way to lead
and motive that individual.
5. Environmental uncertaintyplays a big factor in the contingency
approach, with the ever-changing surroundings managementstyles must
be flexible and able to adaptto things around it. Managementideas cannot
be set in stone and expect to survive.

60. 60
6. A good way to look at the contingency approach is with an "if, then"
attitude. Startby saying "If this is my situation, then this is the best way for
me to manage it." With this sort of managementstyle youhave to rely on
what you know, can figure out, and determine how to solve the problem.
7. Work place technology is ever changing and managers have to be able to
adaptand respond to the changes. The way you manage a company that
relies heavily on technology, such as tracking and shipping orders will not
be the same as a company that uses technology as a sole purpose to send
emails.
8. Diversitywith clients and employees is going to always demand
differentforms of managementtechniques. Whether it is cultural or
ethnicity, special care is going to be needed to manage the different
individuals.
9. Size of an organization can have an effect on the way it needs to be
managed.An example would be of a group of 20 people who may require
an informal managementapproach, where as a group 1,000 people tend to
be formal.
10. Managingfor the future demands contingency planning. Management
styles have to be able to adaptto an ever-changing future. What may work
now in this current economic climate may not in the future and
managementphilosophies mustbe able to adjust.

61. 61
ON

62. 62
INTRODUCTION OF UBL
United Bank Limited (UBL) is one of the largestcommercial
banks in Pakistan having more than 1,000 branches inside the country. Its
15 branches outside the country are in the United States of America, Qatar,
UAE, Bahrain, and Republicof Yemen. It also has representative offices in
Tehran, Iran, and Almaty, Kazakhstan. It owns subsidiaries in the UK
(United National Bank Limited), and in Zurich, Switzerland.
History
Agha Hasan Abedi founded the bank in 1959. In 1971 the
Governmentof Pakistan nationalizedthe bank. In 2002, the Government of
Pakistan sold it in an open auction to a consortium of Abu Dhabi Group
and Best way Group.
In 2002 the bank merged its operations in the UK with those belonging to
National Bank of Pakistan to form United National Bank Limited. United
Bank owns 55% of the joint-venture and National Bank of Pakistan owning
the remainder.
Atif Riaz Bokhari, President & CEO of UBL was brought by President
General Musharraf from Bank of America. Atif is younger brother of
General Asif Riaz Bukhari, a commando who is a close friend of General
Musharraf.

63. 63
Our Mission:
To improve the quality of life for millions
Our Vision:
To be the most admired Financial Institution in Pakistan
Our Core Purpose:
Enablingsuccess; Realizingdreams
Services:-
 Consumer Banking
 Commercial banking
 Corporate Banking
 Investment
 Treasury
 UBL Ameen Islamic Banking
Online banking
UBL’s state of the art online banking, customers were able to access their
account from more than 900 branches located in 150 cities across Pakistan.
Transactions such as Cash Deposit, Cheque Encashment, Stop Payment,
Account Statement, and Funds Transfer were done online without the need
to travel to the local branch.

64. 64
CONTINGENCY PLANNING OF UBL BANK
Recent volatility in the wholesale funding markets has
highlighted both the importance of sound liquidity risk management
practices and the fact that financial institutions can and have experienced
liquidity problems even during good economic times. As a result, a bank
management's ability to adequately meet daily and emergency liquidity
needs while controlling liquidity risk through risk identification,
monitoring, and controls is receiving increasingly intense regulatory
scrutiny. To meet the new demands of liquidity risk management, UBL
bank have evolved new techniques.
Bank should have a formal contingency plan of policies and
procedures to use as a blueprint in the event the bank is unable to fund
some or all of its activities in a timely manner and at a reasonable cost.
Industry experts generally agree that these crises tend to develop very
rapidly. Their onset is no longer measured in days but rather hours.
A comprehensive contingency funding plan can provide a
useful framework for meeting both temporary and long-range liquidity
disruptions. A good plan should emphasize a reliable but flexible
administrative structure, realisticaction plans, ongoing communications at
all levels, and a set of metrics backed by adequate management
information systems. Periodic testing of contingency MIS requirements
ensures the availability of timely reports for rapid decision-making.

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Steps for ContingencyPlanning
The UBL has been taking the following these steps for
contingency planning.
1.Examine basicinformation on and strategy for businesscontinuity
measuresat each of the Bank'scomputersystems
The Bank examined the following points for each section's computer
systems: whether existing contingency plans are in place;
- whether manual procedures are possible for performing business
operations usually carried out by such systems; and general approach to
continuity of business processes.
2. Coordinatecontingency plansofeach office and departmentof the
UBL
Individualcontingency plans drawn up by each office and departmentof
the Bank are to be coordinated with those of other offices and departments
as well as those of the parties outside the Bank and modified where
necessary. In this process, feasibilityof the contingency plans, including
that of securing the necessary staff members, is alsochecked in detail. All
sections of the Bank share the results of this coordination.
3. Draw up detailed contingency action plans
Each section of the Bank develops more detailed "action plans" based on
business continuity measures defined in the Year 2000 contingency plan.
Each section sets out step by step procedures of business continuity
measures and the tasks of each staff member so that the Bank's business
operations can be carried out even in Year 2000 contingencies.

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SWOT ANALYSIS
Strengths:-
•3rdlargest Bank of Pakistan in term of deposits
• 2nd largest Privatized Bank of Pakistan
•Improved operational efficiency as to its past
•Courteous Customer service and fast delivery of online and offline
services
•Marvelous Image and Reputation of the bank in the eyes of its customers
•Extensive Branch network
•UBL Product positioning is very effective standard of living
Weaknesses:-
•No standardization in terms of branches some of the branches are very
attractive and most of the branches are not very good like other branches.
•In some regions, urban areas of Pakistan service of UBL is not good as
compared to other privatized banks
•The application time is also quite lengthy.
•UBL is a step behind in using new technology as compared to other banks
•All branches need orientation for customer dealing.
•Most of the employees are overload with the work and promotion is also
not timely.
•Employees are not well dressed

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Opportunities:-
•Bank can extend its network in other cities of Pakistan like other 4 remote
cities, it would increase their sales.
•Proper orientation of employees in all branches can help them to cope up
with foreign banks
•By bringing new technology and modern business processes will bring
the change and increase their profitability
•Call centre services should be improved to enhance their network
Threats:-
•Large and increasing competition
•High operating costs
•Lack of huge deposits

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QUESTION:-
1. How is it a best way to view organization behavior through
contingency approach?
2. Best way to view organizational behavioris through a contingency
approach?
3. The best way to view organizational behavioris the contingency
approach?
4. Why is contingency approach the best way to view organizational
behavior?
5. How does bureaucracy differ from the contingency approach to
management?
6. What is the example of the Contingency Model of Human behavior?
7. The best way of view organization behavior is through contingency?
8. Distinguish between contingency approach and system approach?
9. The best way to view organizational behavioris through?
10.View of organization behavior through a contingency approach?
11.What is a contingency approach to organizationalbehavior?
12.Ways to build an organizationaltrustamongstpartners?
13.What is a Contingency approach to organization behavior?
14.What is contingency approach to leadership?
15.What is the basicapproach on human behavior?
16.What argumentsupport by Gompers’s?
17.Job Design and Contingency approach?
18.Explain the contingency approach?
19.Contingency approach and OB Model?

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Conclusion:-
The contingency approach to managementis based on the idea that
there is no single bestway to manage. Contingency refers to the immediate
contingent circumstances. Effective organizations musttailor their
planning, organizing, leading,and controlling totheir particular
circumstances. In other words, managers should identify the conditions of
a task, the requirements of the managementjob, and people involved as
parts of a complete managementsituation. The leaders mustthen work to
integrate all these facets into a solution that is most appropriate for a
specific circumstance.
The contingency theory is similarto situation theory in that there is
an assumption that no simple way is always right. Situation theory,
however, focuses more on the behaviors thatthe leader should use. The
contingency theory takes a broader view thatincludes contingent factors
about leader capabilityand alsoincludes other variables within the
situation.
Organizational behavior theories comprise a framework for
understandinghow individuals and groups behave and provide a basis for
research and practical application of these behaviors. OB research takes
several forms, including: meta-analyses which pool the results of many
other studies; field studies involving real-life situations; laboratory studies
which enable researchers tointentionally manipulate variables; sample
surveys or questionnaires; and case studies which provide in-depth
analysis ofa single situation. The results of these research methods are

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then put to practical use in one of three ways: directapplication
(instrumental use); general enlightenment(conceptual use); and
verification or legitimization of extantbeliefs (symbolicuse). Symbolicuse
can be detrimental ifthe research results are used to reinforce prejudice or
bias.
Organizationalbehavior practice occurs when people learn by
doing. As is true of learning experiences in general,understandingis
enhanced when OB theory and research are put into practice in
organizations.
Differences in communication effectiveness are a function both of
type of organization and composition of work force (age, sex, education,
tenure). The communication process is influenced by many internal and
external constraints from the organization and its subsystems. The
constraints determine the status of the organization ofthe environmental
supra system and the state of each subsystem. The communication process
is thus contingent upon external and internal stimuliand upon the degree
of freedom of states within the system allowed by the organizational
constraints. Some internal contingencies are: structural contingencies,
output, and demographic, spatiotemporaland traditionalcontingencies.
External contingencies are: economic, technological, legal,and
environmentalcontingencies.