Contingency factors

With these authors, a whole research tradition was developed around contingency factors. These explain the diversity of organisational structures. In reality, the range of organisation-related problems is broad and leads to a wide variety of organisational solutions. Awareness of these factors may help to define an optimal local organisation; there is, however, no such thing as a "one best way", only a series of optimal solutions depending on contingency factors. These factors are either exogenous, determining factors (size, technology, type of activity, environment, legislation, national culture, system of professional relations) or internal factors (control structure, strategy, coalition of actors, internal politics, power games, history, learning path, etc.).

The contingency theory, therefore, seeks to consider the way organisations develop based on the influence of context variables. The factors of diversity most often mentioned are as follows:

- The size: a family business with 5 people is not organised in the same way as a multinational with several hundreds of thousands of employees. Small firms generally have simple structures, with the general manager exerting direct authority over the workers. This is the case of most firms (only 6% of companies have more than 10 employees and only 0.1% of companies have over 500 employees), even though little organisational research focuses on these companies. As they grow, they gradually set up a series of intermediaries (intermediary hierarchical levels, departments in charge of coordination, communication systems, etc.). Coordination is less spontaneous; it becomes more organised (standardised procedures and information dissemination). A tendency to specialise and standardise can also be seen. Managerial practices, such as flexibility in personnel assignments, extent of delegation of authority, and emphasis on results rather than procedures, are related to the size of the unit managed.

This creates rigidity and affects coordination costs. Nevertheless, size does not determine the final organisational structure; it raises specific problems, notably with respect to coordination, but there is no single solution to these.

- The status and control structure of the organisation:

some organisations have a public status. The capital invested in the organisation is public, owing to strategic reasons and political choices (notably with respect to the company's mission statement). Other organisations are governed by private laws.

These may be partnerships (where the manager is under the control of his/her associates), or corporations. In the case of public limited companies (pic's), the manager is under the control of a general assembly of shareholders, comprising small investors, family capital or legal entities (companies, pension funds, etc.).

The scope and type of shareholding has a certain influence on the organisation. In some cases, the organisation has a Board of Directors, a CEO or an executive board, a supervisory Board, etc. In these cases, the company's management is separate from its control. The centralised organisational structures work best when the task is uniform, and predetermined and environment pressures are lessened; such as if a company has cornered and market and or has a stable product[30].

Other organisations have a Cooperative company status, based on the principle of "one-man, one-vote". This model may serve best in the situation where innovation and the ability to respond to environmental change quickly is key.

Others have the status of Association with the obligation to reinvest and no transfer of ownership possibility.

The challenge for all managers will be to balance the need for uniformity with the demands for diversity. Uniformity guarantees ease of control and supervision, ease of integrating work of multiple subgroups or teams (such as between offices) and economy since it is easier to pay for and maintain one system rather than many (one type of form verse multiple forms). However the environment in which the organisation is based, and for which the product is being delivered, is constantly changing making it unpredictable. Organisations must than manage responses to these changes- diversifying their processes and thinking.

Organisations may tend to seek too much uniformity, following the classic futile fight against the law of entropy- that all things move towards greater disorder. An organisation should recognize the many demands for diversity classify their importance and decide on which to pursue, maximizing the cost of diversity with the achievement of goals carefully.

- The type of production:

Mass production: e.g. car
Small series production: e.g. aircraft
Unit production: e.g. Channel Tunnel
Process flow production: e.g. petrochemical -
Seasonal production: e.g. a farm or forest work
Seasonal flow production: e.g. sugar
Contingent production: e.g. coal mine
Services production: e.g. council, bank, computer service

- Technology: this can be defined as all the processes and operations performed by the company and implementing non-human means. It constitutes a specific requirement. Many debates can be found in literature with each generation of new technologies. These focus on the relatively restricting or determining influence of the technology on the organisation.

In the hypothesis of technological determinism, technology imposes a certain method for dividing up labour and a method for coordination. For example, according to Charles PERROW, technology determines organisational structure in two different ways. The variety of components that it requires (diversity or standardisation of materials, frequency of unforeseeable events, simplicity or complexity of equipment) affects the organisation's degree of rigidity or flexibility. The type of technological decision-making process (routine, rational search for solutions based on tacit know-how) affects the possibility of centralising or decentralising the search for a solution. The automotive industry, for example, makes standardised and mass-produced products, uses standardised materials, standardised equipment and procedures and has hierarchical structures and a high degree of formalisation. In the public works sector, on the other hand, each site has its own specific characteristics, intermediary actors have a higher degree of autonomy and there are frequent meetings to make adjustments.

In the hypothesis of social constructivism, the structure is assumed to be the result of actor interplay and what the actors do with the technology. The shape of a table (round or oval) does not mean that the relations between people will be equal. It creates spatial structuring (symmetrical or asymmetrical) in which social interactions take place according to the space available. This is why significant differences can be seen between companies using the same technology: important organisation choices, with respect to the same technology, depend on the organisation itself.

- The environment: organisations are part of a social, economic and ecological environment. This environment has a certain amount of influence on internal dynamics and structures. For example, a company located in the country or in the city does not amount to the same thing. The company Schneider in Le Creusot (in France, at the start of the 19th century) constituted a town in the middle of the countryside: the factory (14,000 employees) laid its mark on the surrounding environment (social works, schools, control of local power, etc.). On the other hand, the company Renault in Billancourt (5,000 employees), in the Parisian suburbs, depended greatly on its environment; it selected or rejected labour from the Parisian catchment area in relation to its needs. Three characteristics can be used to qualify the environment:

o Its potential (munificence): if this is high, the pressure that it exerts will be low. This makes regular growth possible for the organisation.

o Its complexity: if it is heterogeneous, the organisation will develop business divisions and complex forms of coordination.

o Its degree of unpredictability. If the environment is dynamic and unstable, the organisation will tend to remain flexible.

The contingency theory is widely used by Henri MlNTZBERG to highlight the link between the structure of an organisation and its internal functioning, also taking into account the objectives of its managers. According to Mintzberg, there is no relationship of determinism between the environment and an organisation; on the contrary, the influence stems from the adjustments between a series of simple elements that add up. It is thus a question of adjusting to the environment in line with the organisation's policy and its internal coherence. All of these elements form a system (see the systems theory that follows). From there on, Mintzberg conceives six key models of basic organisational configuration (see chapter on organisational structures).