„Contingency theory states that there is no single organizational structure that is highly effective for all organizations.“
— Lex Donaldson
Context: Within organization studies, contingency theory has provided a coherent paradigm for the analysis of the structure of organizations. The paradigm has constituted a framework in which research progressed leading to the construction of a scientific body of knowledge... Contingency theory states that there is no single organizational structure that is highly effective for all organizations. It sees the structure that is optimal as varying according to certain factors such as organizational strategy or size. Thus the optimal structure is contingent upon these factors which are termed the contingency factors. For example, a small-sized organization, one that has few employees, is optimally structured by a centralized structure in which decision-making authority is concentrated at the top of the hierarchy, whereas a large organization, one that has many employees, is optimally structured by a decentralized structure in which decision-making authority is dispersed down to lower levels of the hierarchy. Lex Donaldson, "The normal science of structural contingency theory." Studying Organizations: Theory and Method. Thousand Oaks, Calif: Sage (1999): 51-70.