Environmental Contingency Theory: Organization and the Environment

Abstract

The development required by the organization to always be sustainable and continuous begins with many changes either internal or external. External change itself can come from various factors one of them environmental factors. Contingency theory explains the main framework for an organization to define design, structure, managerial etc. Environmental contingency theory makes this work by focusing on an environment that has the potential to change the shape and culture of the organization. The environment also has a role to make the organization develop and innovate because of its demands in having information that always maintained its availability as well as the level of organizational complexity. The purpose of this paper is to enrich the discussion of the theory of environmental contingency as a contingency theory derivative that discusses the role and impact of the uncertainty caused by the environment. The study of this theory also discusses the researchers' thinking about the criticism of social contingency theory. This theory was finally summarizes that each organization adapting the structure through shifting circumstances that do not match (misfit) with a result of their low performance to a state fit, where there is no order to achieve effectivity and performance of the organization that led to the emergence of order to achieve effectiveness and performance of the organization, or a structural change that is positive and productive to the organization, so the argument of this theory is that organizations are individually adapted to their environment. In general, contingency theory also sees organizational compatibility with other variables around the organization explaining that organizational theory is able to describe an overall organizational phenomenon that has not been able to be explained by other theoretical approaches