Contingency theory presently provides a major framework for organizational
design. There are, however, several major challenges to it. Contingency theory
is said to be static. However, the SARFIT formulation of structural adaptation,
with the Cartesian approach to fit, provides a theory of organizational change.
Moreover, difficulties become opportunities for theory development, in the
new concepts of quasi-fit and hetero-performance. The contingency theory of
organizational structure is said to be obsolete because of new organizational
forms, but this lacks credibility. A rival theory of organizational structure is
institutional theory, however it is problematic. Challenges and opportunities in
methodology are also discussed.