Around the 1960s, Systems Theory was introduced into management, presenting the organization through two core characteristics: Totality and Purpose.
Totality means that organizations must be conceived globally, as a whole. They need to be seen as systems, as integrated entities. The systemic approach means assimilating the whole rather than isolated parts, and recognizing the synergistic effect through which the result is greater than the sum of its components.
Purpose means that every system and every organization has an aim to achieve. The vision of purpose reveals that it is function, not structure, that produces the organization. This is the teleological view of organizational life.
The Age of Contingency
After the 1970s, research began pointing toward a new reality. Thriving organizations were those capable of continuously adapting and adjusting to environmental demands with agility, dexterity, and the capacity to seize opportunities. The most successful organizations became those that could adjust to the pressures, constraints, and contingencies of their environment.
Contingency refers to eventuality, to the possibility of something happening or not. Everything contingent is ephemeral and fleeting. The only permanent thing is change itself. Every organization in development must undergo constant review, improvement, and adjustment to its external environment: this is what Contingency Theory captures as a situational approach.
Flexibility, adaptability, innovation, revitalization, and continuous improvement became operative words for organizations seeking to keep pace with the market and achieve survival, growth, and success.
Everything Is Relative and Interdependent
Contingency Theory emphasized that "everything is relative" and "everything depends." Contingent factors such as the environment, the size of the institution, and the complexity of its operations all exert influence. From another perspective, Contingency Theory was seen not as a theory in the strict sense, but as an incorporation of systems theory assumptions about interdependence and the organic, open, adaptive nature of organizations.
Systems Theory and Contingency Theory are recalled here to help us reflect on the present moment. What are we still choosing to believe, in order to avoid changing or investing, that no longer makes sense? What is no longer producing positive effects or results in this era of purpose, relativity, totality, and interdependence? These are the questions that leadership must be willing to sit with and answer honestly.