CONTINGENCY THEORY

A contingency theory is an organizational theory that claims that there is no best

way to organize a corporation, to lead a company, or to make decisions. Instead,
the optimal course of action is contingent (dependent) upon the internal and
external situation. A contingent leader effectively applies his own style of
leadership to the right situation.
Fiedler's contingency theory is one of the contingency theories that states that
effective leadership depends not only on the style of leading but on the control
over a situation. There needs to be good leader-member relations, task with clear
goals and procedures, and the ability for the leader to mete out rewards and
punishments.
In contingency theory of leadership, the success of the leader is a function of
various contingencies in the form of subordinate, task, and/or group variables. The
effectiveness of a given pattern of leader behavior is contingent upon the demands
imposed by the situation. These theories stress using different styles of leadership
appropriate to the needs created by different organizational situations. No single
contingency theory has been postulated.
The leader's ability to lead is contingent upon various situational factors, including
the leader's preferred style, the capabilities and behaviors of followers and also
various other situational factors.
Contingency theories are a class of behavioral theory that contend that there is no
one best way of leading and that a leadership style that is effective in some
situations may not be successful in others.
An effect of this is that leaders who are very effective at one place and time may
become unsuccessful either when transplanted to another situation or when the
factors around them change.
This helps to explain how some leaders who seem for a while to have the 'Midas
touch' suddenly appear to go off the boil and make very unsuccessful decisions.
Contingency theory is similar to situational theory in that there is an assumption of
no simple one right way. The main difference is that situational theory tends to
focus more on the behaviors that the leader should adopt, given situational factors
(often about follower behavior), whereas contingency theory takes a broader view
that includes contingent factors about leader capability and other variables within
the situation.

Their work suggests a continuum of possible leadership behavior available to a

manager and along which many leadership styles may be placed. The continuum
presents a range of action related to the degree of authority used by the manager
and to the area of freedom available to non-managers in arriving at decisions. A
broad range of leadership styles have been depicted on the continuum between
two extremes of autocratic and free rein (See figure 1). The left side shows a style
where control is maintained by a manager and the right side shows the release of
 control. However, neither extreme is absolute and authority and freedom are never
without their limitations.
A manager is characterized according to degree of control that is maintained by
him. According to this approach, four main styles of leadership have been
identified: Tells: The manager identifies a problem, chooses a decision, and
announces this to subordinates. The subordinates are not a party to the decision
making process and the manager expects them to implement his decisions as soon
as possible. Sells: The decision is chosen by the manager only but he understands
that there will be some amount of resistance from those faced with the decision
and therefore makes efforts to persuade them to accept it. Consults: Though the
problem is identified by the manager, he does not take a final decision. The
problem is presented to the subordinates and the solutions are suggested by the
subordinates. Joins: The manager defines the limits within which the decision can
be taken by the subordinates and then makes the final decision along with the
subordinates.
The model says that task-oriented leaders usually view their LPCs more negatively,
resulting in a lower score. Fiedler called these low LPC-leaders. He said that low
LPCs are very effective at completing tasks. They're quick to organize a group to
get tasks and projects done. Relationship-building is a low priority. However,
relationship-oriented leaders usually view their LPCs more positively, giving them a
higher score. These are high-LPC leaders. High LPCs focus more on personal
connections, and they're good at avoiding and managing conflict. They're better
able to make complex decisions
The model states that there is no one best style of leadership. Instead, a leader's
effectiveness is based on the situation. This is the result of two factors
"leadership style" and "situational favorableness" (later called "situational
control").

Leader-Member Relations This is the level of trust and confidence that your team
has in you. A leader who is more trusted and has more influence with the group is in a
more favorable situation than a leader who is not trusted.

Task Structure This refers to the type of task you're doing: clear and structured, or
vague and unstructured. Unstructured tasks, or tasks where the team and leader have
little knowledge of how to achieve them, are viewed unfavorably.

Leader's Position Power This is the amount of power you have to direct the group,
and provide reward or punishment. The more power you have, the more favorable your
situation. Fiedler identifies power as being either strong or weak.

Examples:

Task-oriented leadership would be advisable in natural disaster, like a flood or fire. In an

uncertain situation the leader-member relations are usually poor, the task is
unstructured, and the position power is weak. The one who emerges as a leader to direct
the group's activity usually does not know subordinates personally. The task-oriented
leader who gets things accomplished proves to be the most successful. If the leader is
considerate (relationship-oriented), they may waste so much time in the disaster, that
things get out of control and lives are lost. Blue-collar workers generally want to know
exactly what they are supposed to do. Therefore, their work environment is usually
highly structured. The leader's position power is strong if management backs their
decision. Finally, even though the leader may not be relationship-oriented, leader-
member relations may be extremely strong if they can gain promotions and salary
increases for subordinates. Under these situations the task-oriented style of leadership is
preferred over the (considerate) relationship-oriented style. The considerate
(relationship-oriented) style of leadership can be appropriate in an environment where
the situation is moderately favorable or certain. For example, when (1) leader-member
relations are good, (2) the task is structured, and (3) position power is either strong or
weak. Situations like this exist with research scientists, who do not like superiors to
structure the task for them. They prefer to follow their own creative leads in order to
solve problems. In a situation like this a considerate style of leadership is preferred over
the task-oriented.

Fred Fiedler developed what is known as the Contingency Model of Leadership. He

is famous for being the first management theorist to say that leadership
effectiveness depends on the situation
The pathgoal theory, also known as the pathgoal theory of leader effectiveness
or the pathgoal model, is a leadership theory developed by Robert House, an Ohio
State University graduate, in 1971 and revised in 1996. The theory states that a
leader's behavior is contingent to the satisfaction, motivation and performance of
her or his subordinates. The revised version also argues that the leader engages in
behaviors that complement subordinate's abilities and compensate for
deficiencies. According to Robert House and John Antonakis, the pathgoal model
can be classified as a form of instrumental leadership

According to it, if you want your people to achieve their goals, you need to help, support,
and motivate them. You can do this in three ways:

Helping them identify and achieve their goals.

Clearing away obstacles, thereby improving performance.
Offering appropriate rewards along the way.

To do this, you can use four different types of leadership:

Supportive leadership Here, you focus on relationships. You show sensitivity to

individual team members' needs, and you consider your team members' best interests.
This leadership style is best when tasks are repetitive or stressful.

Directive leadership With this, you communicate goals and expectations, and you
assign clear tasks. This style works best when tasks or projects are unstructured, or
when tasks are complex and team members are inexperienced.
Participative leadership With participative leadership, you focus on mutual
participation. You consult with your group, and you consider their ideas and expertise
before making a decision. This approach works best when your team members are
experienced, when the task is complex and challenging, and when your team members
want to give you their input.

Achievement-oriented leadership Here, you set challenging goals for your team.
You have confidence in your team's abilities, so you expect your team to perform well,
and you maintain high standards for everyone. This style works best when team
members are unmotivated or unchallenged in their work. The best style to use is then
dependent on the situational factors explained below.

What is Fiedlers Contingency Theory?

A behavioural theory based on their views that there is no one best way to lead an
organisation, organise a cooperation or to make a decision.
Also known as its all depends theory.
The effectiveness of a leader in achieving high group performance is depends on the
leaders motivational system and the degree to which the leader controls and influences
the situation.