The contingency viewpoint is a more recent development of organizational theory that attempts to integrate a variety of management approaches and proposes that there is no best way to organize a corporation or lead a company. Instead, the optimal course of action is contingent or dependent upon the specific internal and external situation a manager may find themselves in. The contingency approach claims that past theories, such as Max Weber's bureaucracy theory of management and Taylor's scientific management, are no longer practiced because they don't recognized that management style and organizational structure are influenced by various aspects of the environment, or contingency factors. The arguments between the previous approaches to management and determining the "best" approach is considered irrelevant in the contingency theory, since the contingency approach demonstrates that there is no "one best way" for managing and leading an organization.
An example of the contingency viewpoint in practice could involve a manager facing a situation with an employee that is late to work on a regular basis. A manager could have a written protocol for a situation like this in which the employee may be fired or, under the contingency viewpoint, the manager may decide to better understand the situation by talking to the employee about why they are late to work and then decide on an appropriate course of action (Figure 1). The value in this would be that the manager may learn that the employee simply needs to adjust her schedule because of extenuating circumstances and would therefore not need to go through the hassles of dismissing the employee.
The contingency viewpoint focuses on management's ability to achieve alignments and good fits between employees and circumstances since the viewpoint suggests that there is no one size fits all management approach. Similarly, there are models for contingency leadership which show the relationship between leadership style and the situation at hand. In these situations, a leader needs to ensure than they are able to assess the situation, determine the task structure, and obtain a position of formal authority in order to be able to adequately manage a contingency situation.
A leader's ability to manage under the contingency viewpoint depends largely on the nature of the environment and how the organization relates to the environment. Therefore, the organizational structure is a major component of the approach that management may take in resolving problems under contingency theory.