History of Management - Systems Thinking & Contingency Thinking

What is systems thinking? What is contingency thinking? Why are both types of thinking useful for managers in contemporary organizations?

Ans:

Systems thinking views organizations as open systems that interact with their environment in a continual process of transforming resource inputs into product outputs. Systems thinking also views the organization as a collection of interrelated parts or subsystems that must function together to achieve a common purpose. Each subsystem needs to perform its tasks well and to work well with the other subsystems.

Contingency thinking tries to match managerial responses with the problems and opportunities unique to different situations, particularly those posed by individual and environmental differences. Contingency approaches to management assert that there is no one best way to manage. Instead, managers should understand individual and situational differences and respond to them in appropriate ways.

Systems thinking and contingency thinking recognize the realities of complex modern organizations and their interplay with dynamic and competitive global environments. Failure to embrace either systems thinking or contingency thinking undermines the effective management and leadership of organizations.

Source: Management, 11th Edition - John R. Schermerhorn