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Contingency theory is a behavioral theory based on their views that there is no “one best way” to lead an organization, organize a cooperation or to make a decision. Contingency theory states that these actions are dependant (contingent) to the internal and external factors. Thus it states that there is no single theory of contingency management.Some important contingencies for organizations are: Technology Suppliers and Distributers Customers and Competitors Consumer Interest Groups Government Unions
Researchers of contingency theory states that the decision making process depends on a number of variables. These variables are: The importance of the decision – is the decision a strategic or difficult decisions to reverse. The amount of information available to the leaders and subordinates- has a similar decision been made before and is there available information on the results. The relationship between leaders and subordinates more leaders are likely the greater support they will have from subordinates. The likelihood of subordinates accepting on autocratic decision or cooperate with taking a few good decisions if allowed to participate- how well motivated are the staff? The amount of disagreement among subordinates with respect to the preferred alternative- the greater need for an autocratic approach, perhaps.
Theorists of the Contingency Management TheoryFred Edward FiedlerKenneth BlanchardPaul HerseyVictor VroomPhilip YettonArthur Jago
Fred Edward Fiedler (1922) is one of the leading expertson the study of leadership and organizationalperformance and thus has had a profound impact onsocial organizational and industrial psychology. Beforehe even entered his teen years, Fiedler decided to be apsychologist. Fourteen years later, he graduated fromthe University of Chicago and started his research intochanging the way that people think of leadership.Beginning in 1954, Fiedler began studying leadership inhigh school basketball teams. This lead to thedevelopment of the Least Preferred Co-worker scale.The result of his research, in 1967 lead to the publishingof his famous book, ‘A Theory of LeadershipEffectiveness.” This book proposed his contingencymodel of leadership, the first leadership theory tomeasure member- leader relationships.
Kenneth H. Blanchard (May 6th 1939), bornin Orange, Ney Jersey attended NewRochelle High School, graduating in 1957.He completed his BA in government andphilosophy in 1961, a MA degree insociology and counseling in1963 and a PhDdegree in education administration andleadership in 1967. In the 1960’s hedeveloped the Situational leadership theoryand model with Paul Hersey.
Paul Hersey born in 1931, is a behavioral scientistand entrepreneur. He is known for his work onSituational leadership theory with KennethBlanchard. They published Management andOrganization Behavior.
Victor H. Vroom is a business school professor atthe Yale School of Management, who was born on 9August 1932 in Montreal, Canada. He holds a PhDfrom University of Michigan. Vrooms primary researchwas on the expectancy theory of motivation, whichattempts to explain why individuals choose to followcertain courses of action in organizations, particularlyin decision-making and leadership. His most well-known books are Work and Motivation, Leadershipand Decision Making and The New Leadership.
Fred Edward Fiedler Contingency theory of leadership emphasizes that the effectiveness of leadership is dependant (contingent) on matching its leadership style to right situations. This theory was originally developed by Fred E. Fiedler after studying various leaders in different context. It is contradictory to “situational leadership” which stress for leaders to adapt to the situation. Situation in this context may have different meanings. As it relates to the development/readiness level of the organization, it also relates to three factors in contingency. These factors are: Leader- Member- Relations- it is a measure of leadership acceptance between the organizational hierarchies. If the subordinates have trust, confidence and feel adequately motivated by their superiors, it is positive. Task Structure- it is a measure of the clarity of the projects or tasks, their methods to achieve the end product. There are clear guidelines to follow and progress can be easily tracked. Positional Power- it is a measure of the amount of authority the leader has to influence the productivity of the followers, whether he rewards or punishes them. The positional power can be weak if subordinates do not directly report the leader.
Leadership Styles S1: Telling / Directing Follower: R1: Low competence, low commitment / Unable and unwilling or insecure Leader: High task focus, low relationship focus When the follower cannot do the job and is unwilling or afraid to try, then the leader takes a highly directive role, telling them what to do but without a great deal of concern for the relationship. The leader may also provide a working structure, both for the job and in terms of how the person is controlled. S2: Selling / Coaching Follower: R2: Some competence, variable commitment / Unable but willing or motivated Leader: High task focus, high relationship focus When the follower can do the job, at least to some extent, and perhaps is over-confident about their ability in this, then telling them what to do may demotivate them or lead to resistance. The leader thus needs to sell another way of working, explaining and clarifying decisions. S3: Participating / Supporting Follower: R3: High competence, variable commitment / Able but unwilling or insecure Leader: Low task focus, high relationship focus When the follower can do the job, but is refusing to do it or otherwise showing insufficient commitment, the leader need not worry about showing them what to do, and instead is concerned with finding out why the person is refusing and thence persuading them to cooperate. S4: Delegating / Observing Follower: R4: High competence, high commitment / Able and willing or motivated Leader: Low task focus, low relationship focus When the follower can do the job and is motivated to do it, then the leader can basically leave them to it, largely trusting them to get on with the job although they also may need to keep a relatively distant eye on things to ensure everything is going to plan.
According to Hersey and Blanchard, knowing when to use each style is largely dependent on the maturity of the person or group youre leading. They break maturity down into four different levels: M1 – People at this level of maturity are at the bottom level of the scale. They lack the knowledge, skills, or confidence to work on their own, and they often need to be pushed to take the task on. M2 – at this level, followers might be willing to work on the task, but they still dont have the skills to do it successfully. M3 – Here, followers are ready and willing to help with the task. They have more skills than the M2 group, but theyre still not confident in their abilities. M4 – These followers are able to work on their own. They have high confidence and strong skills, and theyre committed to the task.
Maturity Level Most Appropriate Leadership StyleM1: Low maturity S1: Telling/directingM2: Medium maturity, limited skills S2: Selling/coachingM3: Medium maturity, higher skills but S3: Participating/supportinglacking confidenceM4: High maturity S4: Delegating
Understanding the Model: When you sit down to make a decision, your style, and the degree of participation you need to get from your team, are affected by three main factors: Decision Quality – how important is it to come up with the "right" solution? The higher the quality of the decision needed, the more you should involve other people in the decision. Subordinate Commitment - how important is it that your team and others buy into the decision? When teammates need to embrace the decision you should increase the participation levels. Time Constraints – How much time do you have to make the decision? The more time you have, the more you have the luxury of including others, and of using the decision as an opportunity for teambuilding. Vroom and Yetton defined five different decision procedures. Two are autocratic (A1 and A2), two are consultative (C1 and C2) and one is Group based (G2). A1: Leader takes known information and then decides alone. A2: Leader gets information from followers, and then decides alone. C1: Leader shares problem with followers individually, listens to ideas and then decides alone. C2: Leader shares problems with followers as a group, listens to ideas and then decides alone. G2: Leader shares problems with followers as a group and then seeks and accepts consensus agreement.