Structural Contingency Theory: Creativity and Innovation

Table of Contents

In relation to the structural contingency theory, organizations adapt to the environment individually (Thames & Webster, 2009). The environment poses need for innovation, creativity, efficiency, and other needs that organizations must meet, in order to prosper (Daft, 2009). According to the theory, organizations respond to environmental influence by adapting their structure so as to move out of a misfit, characterized by poor performance, in order to restore performance and effectiveness. The foundation of structural contingency theory is the principle that there is a combination between contingency and structure which alters performance. Organizations undergo structural adaptation, in order to attain a fit (Lam, 2004). Innovation and creativity are critical contingency factors that are core to the structural contingency theory.

Innovation and Creativity

Creativity in the process change and technological innovations are essential in the configuration of organizations operating in various environments (Thames & Webster, 2009). Shifts in contingencies such increase in technological sophistication, diversification, technical and market change, and change of organizational size lead the structural adaptation process, which is the essence of the structural contingency theory (Lam, 2004). These changes require structural adjustments as secondary adaptation, in order to restore organizations to equilibrium from the misfit created by the contingency change. According to the contingency theory, the suitable structure for an organization is one that is the best fit for an operating contingency such as technology, environment, or scale of operation (Ibid). This underpins the relationship between innovation and organizational development in relation to the concept of contingency theory. Innovation and creativity confers the potential for entrepreneurship, stability, efficiency, capacity for fast learning and adaptation. Innovation also influences the capacity of structure and strategy to confer a competitive advantage to an organization.

Internal Organizational Constraints

In the quest for development, organizations face internal and external constraints (Thames & Webster, 2009). Internal constraints do not only cause difficulties within the organization but also affect the external environment. Internal problems affect players such as customers, competitors, suppliers, government, communities, media, and other members of the external business environment. For instance, in a manufacturing setting it is not just enough to produce sufficient quantities. The company must produce sufficient quantities fast enough to outperform the competitor. A long lead time can create a sales constraint I that customers prefer manufacturers and suppliers that provide products fast enough as needed. If the internal processes are too slow to accommodate fast supplies, then the suppliers may seek alternative procurements. Poor motivation of staff is another internal constraint that has the potential to alter the organization’s external environment. This can induce reduced productivity or low quality customer service. It is crucial to acknowledge the interconnectedness of internal and external organizational environments (Daft, 2009).

Conclusion

The connection between organizational development and innovation is complex (Lam, 2004). Innovation influences the organization in different ways. These are the structural forms, learning and knowledge creation, and organization’s capacity for adaptation and change. These are the relationships that describe the role of innovation in structural change of formation, knowledge creation, and organizational change and development.

References

Daft, R. (2009). “Organization Theory and Design”. Mason, OH: Southwestern College Publishing Company.

Lam, A. (2004). “Organizational Innovation”. London, UK: Brunel University.

Thames, B. & Webster, D. (2009). “Chasing Change: Building Organizational Capacity in a Turbulent Environment”. Hoboken, NJ: John Wiley & Sons, Inc.

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