Contingency theory is an important part of management theory, which began in the 1960s, formed and developed in the 1970s. With the help of contingency theory, managers expect to find a path out of the jungle. According to the theory, it is significant to note that everything changes in a dynamic process, and there is no one best way of leading an organization (Cameron et al., 2001; Cancel et al., 1999). Managers have to find an appropriate way of management based on specific predisposing and situational factors (Fiedler, 1964). When it comes to the application of contingency theory, the situation in America is different from China.
On one hand, the status of contingency theory has turned to be on the wane gradually in America since the late 1980s. Contingency theory can not solve many problems in management, especially in dealing with turbulent and complex environment and condition. It suggests people to comply with the environment, and it has limitation in guiding practice. For example, the leadership style in Field’s Theory lack of flexibility, since Field argued that leaders are naturally fixed in how they handle situations (Northouse, 2013).
At the same time, contingency theory believes that other management theories are seeking a universally applicable and best way. In other words, it assumes that other theories pursue a best theory. However, there is no one best theory, and most schools of management do not pursue that. Harold Koontz criticized the opinion and he pointed out that, management theories and management science do not believe a best way of acting in various different situations exists (Koontz, O’Donnell & Weihrich, 2010).
On the other hand, contingency theory develops rapidly both in the theory and practice in China. In the first place, managers in China attach importance to contingency factors. Even though contingency theory comes from the western civilization, its core thought is in accordance with Chinese traditional culture. The Confucianism stresses that, people shall make changes as the circumstances may require. It suggests high flexibility. As an old Chinese saying goes, the man who can recognize the facts of a situation is a paragon of men.
What is more, there is a large gap between American advanced theory and management practice in China. The management theory in America is far ahead of China. In the meantime, with the social progress and the development of reformation in China, Chinese management innovation relies largely on the introduce of advanced management method. In this way, Chinese managers begin to pay attention to the combination between western management method and the reality of Chinese companies. Specifically, many scholars in China explore how high schools, hospitals, corporations, and banks apply contingency theory.
In general, contingency theory is applied differently in America and China, which results from different levels of economic development and national situations. The voice of contingency theory tends to be weak in America, while it plays a more important role in China.
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