What is the Difference Between System Theory and Contingency Theory?

The main difference between system theory and contingency theory lies in their focus and approach to organizational structures and behavior. Here are the key distinctions between the two:

System Theory:

1. Focuses on the internal dynamics of an organization's structure and behavior.
2. Emphasizes interdependence and interaction among sub-systems.
3. Treats all organizations alike, without considering the background or unique characteristics of each organization.
4. Provides a theoretical model for understanding organizations and their sub-systems.
5. Does not take into account the external environment and its impact on the organization.

Contingency Theory:

1. Focuses on the external determinants of an organization's behavior and structure, such as the impact of the environment on organizational design and managerial style.
2. Suggests that each organization is a unique entity, with different characteristics and facing different situations.
3. Emphasizes the organization's external environment and the impact of the environment on organization structure and managerial style.
4. Provides practical solutions to organizational problems, rather than merely offering a theoretical model.
5. Rejects the blind application of classical principles of management, asserting that the management effectiveness is contingent or dependent upon the interplay between the organization and its environment.

In summary, system theory focuses on internal organizational dynamics, while contingency theory emphasizes the impact of external factors on an organization's structure and behavior. Contingency theory can be seen as an extension or addition to system theory, filling in the gaps and addressing the external factors that system theory does not consider.

Comparative Table: System Theory vs Contingency Theory

The key difference between system theory and contingency theory lies in their focus and approach. System theory deals with the internal dynamics of an organization, while contingency theory focuses on the external determinants of an organization's structure and behavior. Here is a table summarizing the differences between the two theories:

Both theories consider an organization as a system that consists of several sub-systems and emphasize maintaining and adapting activities for the growth and survival of the organization. However, contingency theory is an addition to system theory, filling in its gaps by considering the impact of external factors on an organization's structure and behavior.