Contingency Theory in the Study of Performance Management and Organizational Effectiveness in Non-Profit Organizations

Abstract

This article examines how contingency theory applies to performance management (PM) and organizational effectiveness in nonprofit organizations (NPOs). Contingency theory states that organizational performance depends on the alignment between contextual factors, such as environmental uncertainty, organizational size, technology, culture, and stakeholder complexity, and management control systems. Through a review of the literature, this article provides a historical overview of contingency theory, identifies the main contingency factors affecting NPOs, and analyzes how these factors shape performance management systems and organizational effectiveness. This synthesis contributes to management control research by clarifying how contingency theory explains performance variations in the unique institutional environment of the nonprofit sector.