Question

System theory and contingency theory of management

Answer 1

There are also contingency theories that relate to decision making. ... An expanded view of contingency theory is that the structure of an organization depends on the company's technology and environment and the effectiveness of the management accounting system is contingent on the organization's structure

Answer 2

Answer:

The primary distinction between system theory and contingency theory is that system theory focuses on the internal dynamics of an organization's structure and behaviour, whereas contingency theory focuses on the organization's external elements. Furthermore, to cover important gaps in the systems theory, contingency theory examines the link between an organisation and its external environment and actions. To put it another way, it is a contribution to system theory.

Explanation:

• System theory focuses on the organization's internal environment and subsystems. It primarily analyses the interdependence and interaction of subsystems. Furthermore, depending on the organization's expectations, the relationship between the organisation and the environment changes on a regular basis.
• A systematic method approaches all organisations in the same manner. However, it does not consider the target organization's background. This technique also provides a theoretical model for the organisation and its different sub-systems. It does not, however, diminish any of the traditional management concepts that the target sector employs. Systems theory is limited by its lack of universality and abstract approach.
• Contingency theory supplements system theory by considering the link between the organisation and the external environment to address gaps in system theory. According to the thesis, there is no one-size-fits-all management action or organisational design. In reality, the context impacts both the design and the managerial choice. In other words, it depends on the circumstances. As a result, situational theory is a synonym for contingency theory.
• Contingency organisational theory does not identify the best method to organise a company, lead it, or make managerial decisions. As a result, the appropriate course of action is based on internal and external variables.
• The primary distinction between system theory and contingency theory is that system theory works with internal organisational dynamics, whereas contingency theory deals with external determinants of organisational structure and behaviour. Furthermore, systems theory examines universal principles that may be used in any scenario. On the contrary, the contingency organisational theory is based on the cure of 'it all depends.' As a result, this is a critical distinction between system theory and contingency theory. Furthermore, the contingency theory provides a clearer understanding of the link between various environmental factors. Furthermore, this theory is performance-oriented and focuses on the application of system theory principles.