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Detailed Answer.

Explanation:

Theories of management provide different ways of understanding how organisations can be led

effectively. Two important perspectives are the systems approach and the contingency approach.

Both move beyond early “one best way” classical theories and instead highlight the complexity and

adaptability required in modern organisations.

The systems approach views the organisation as an integrated whole made up of interdependent

subsystems such as HR, finance, operations and procurement. It is based on systems theory, seeing

organisations as “open systems” that interact with their external environment. Inputs such as people,

information and resources are transformed into outputs such as products, services and stakeholder

value. Feedback loops are essential to monitor performance and make adjustments. The key idea is

synergy — the whole is greater than the sum of the parts. For example, in procurement, sourcing

decisions influence not only supplier performance but also finance (budgets), operations

(continuity), and CSR (sustainability). A systems approach ensures that procurement strategies are

aligned to wider organisational goals and continuous improvement.

The contingency approach develops this idea further, arguing that there is no universal way to

manage. Instead, the best approach depends on situational factors such as environment, size,

technology, or workforce capability. It rejects “one-size-fits-all” rules and stresses that management

must adapt. For example, in a stable market, a hierarchical structure with formal rules may work

well, whereas in volatile markets, flexible and decentralised decision-making is more effective. In

procurement, this could mean using strict process controls for routine, low-value items, but adopting

agile, collaborative approaches when managing strategic supplier partnerships in uncertain global

supply chains.

In comparison, the systems approach gives managers a holistic view of how different parts of the

organisation connect and interact with the external environment, while the contingency approach

emphasises adaptability and situational leadership. Together, they suggest that effective managers

need both a broad systems perspective and the ability to tailor their approach depending on context.

In conclusion, the systems approach stresses coordination, integration and feedback across the

organisation, while the contingency approach stresses flexibility and the idea that “it depends.” Both

are highly relevant to procurement and supply leaders who must integrate across functions and

adapt strategies to dynamic and uncertain supply environments.