MANAGERIAL ACCOUNTING RESEARCH 299
including mechanisms of social control and coordination, and environments of
organizations.
The sociological tradition embedded in contingency theory developed dur-
ing the 1960s through various ‘‘structural’’ approaches to organizational studies
(Woodward 1965; Aiken and Hage 1966; Hage and Aiken 1967; Blau 1970, 1973;
Hickson 1966; Child 1972; Pughet al.1968). These studies suggested that orga-
nizations’ structures are contingent upon contextual factors which have been
variously defined to include technology (Woodward 1965), dimensions of task
environment (Burns and Stalker 1961), and organizational size (Pughet al.1969;
Blau 1970). These contextual factors are hypothesized to influence dimensions of
structure including the degree of formalization, specialization, differentiation and
bureaucratization. Discussions of social control and coordination were sometimes
elicited to explain some of the observed relationships among structural properties,
but, by and large, were not of a central importance.
Not all functionalist theories of organizations developed during this period
presented such static images of organizations. Contingency frameworks, for
example, drew directly from these sociological functionalist theories of orga-
nization structure, while also using March and Simon’s (1958) organizational
decision-making perspective. March and Simon (1958) developed a complex
macro-perspective of organizations that viewed them as flexible, loosely-coupled
systems in which human choice and voluntarism, and hence unpredictability,
were major characteristics. The very essence of this decision-making perspective
held that decision-makers in organizations are unlikely in most circumstances to
have the information they need and want, and therefore, that many if not most
decisions are made under conditions of uncertainty. In short, the primary con-
cern of the organizational decision-making perspective is for the treatment of the
problematic ‘‘boundedly rational’’ person which, in turn, is the core legacy passed
onto contingency theory as it seeks to provide insight as to this boundedly rational
decision-maker in relation to the various contingent contextual factors (technology,
environment, etc.) as suggested by the sociological structural perspectives.
March and Simon’s (1958) depiction of the organizational decision-maker under
such conditions of uncertainty was influenced by an earlier organizational theory
tradition: the ‘‘human relations’’ approach to organizational analysis as developed
in the work of Mayo (1933) and more concretely articulated by Barnard’s (1938)
seminal work,The Functions of the Executive. Perhaps the fundamental insight of
this human relations approach in terms of its contribution to the organizational
decision-making of March and Simon (1958), and eventually the contingency
theory perspective, was that social and psychological attitudes were significant
factors to be considered in the design of production processes and its related control
systems. The human relations approach, in turn, extended the early scientific man-
agement work of Frederick W. Taylor was concerned with the rationalization of
work in order to maximize efficiency and productivity and, hence, profits. Scientific
management ushered in the monitoring of the individual worker, but ultimately
contributed to the monitoring of work units within organizations as well. The
fascinating issue which the human relations perspective brought forth (as com-
pared to earlier scientific management work) and pervades through contingency