Contingency Theory

Contingency Theory

DESCRIPTION

Although several approaches to leadership could be called contingency theories, the most widely recognized is Fiedler’s (1964, 1967; Fiedler & Garcia, 1987). Contingency theory is a leader–match theory (Fiedler & Chemers, 1974), which means it tries to match leaders to appropriate situations. It is called contingency because it suggests that a leader’s effectiveness depends on how well the leader’s style fits the context. To understand the performance of leaders, it is essential to understand the situations in which they lead. Effective leadership is contingent on matching a leader’s style to the right setting.

Fiedler developed contingency theory by studying the styles of many different leaders who worked in different contexts, primarily military organizations. He assessed leaders’ styles, the situations in which they worked, and whether they were effective. After analyzing the styles of hundreds of leaders who were both good and bad, Fiedler and his colleagues were able to make empirically grounded generalizations about which styles of leadership were best and which styles were worst for a given organizational context.

In short, contingency theory is concerned with styles and situations. It provides the framework for effectively matching the leader and the situation.

Leadership Styles

Within the framework of contingency theory, leadership styles are described as task motivated or relationship motivated. Task-motivated leaders

6.1 Learning From the Worst 6.1 Affiliate Management 123

are concerned primarily with reaching a goal, whereas relationship-motivated leaders are concerned with developing close interpersonal relationships. To measure leader styles, Fiedler developed the Least Preferred Coworker (LPC) scale. Leaders who score high on this scale are described as relationship motivated, and those who score low on the scale are identified as task motivated.

Situational Variables

Contingency theory suggests that situations can be characterized in terms of three factors: leader–member relations, task structure, and position power (Figure 6.1). Leader–member relations consist of the group atmosphere and the degree of confidence, loyalty, and attraction that followers feel for their leader. If group atmosphere is positive and subordinates trust, like, and get along with their leader, the leader–member relations are defined as good. On the other hand, if the atmosphere is unfriendly and friction exists within the group, the leader–member relations are defined as poor.

The second situational variable, task structure, is the degree to which the requirements of a task are clear and spelled out. Tasks that are completely structured tend to give more control to the leader, whereas vague and unclear tasks lessen the leader’s control and influence. A task is considered structured when (a) the requirements of the task are clearly stated

Figure 6.1  Contingency Model

SOURCE: Adapted from A Theory of Leadership Effectiveness, by F. E. Fiedler, 1967, New York: McGraw-Hill. Used by permission.

 6.1 Theory Study 6.1 Characteristics of Contingency Theory

and known by the people required to perform them, (b) the path to accomplishing the task has few alternatives, (c) completion of the task can be clearly demonstrated, and (d) only a limited number of correct solutions to the task exist. An example of a highly structured task is cleaning the milkshake machine at McDonald’s. The rules for doing it are clearly stated to the employees, there is only one way to do it, whether it has been done can be verified, and whether it has been done correctly can also be determined easily. An example of a highly unstructured task is the task of running a fund-raiser for a local volunteer organization. Running a fund-raiser does not have a clear set of rules to follow, there are many alternative ways of doing it, one cannot verify the correctness of the way it has been done, and no single best way exists to do it.

Position power, the third characteristic of situations, is the amount of authority a leader has to reward or to punish followers. It includes the legitimate power individuals acquire as a result of the position they hold in an organization. Position power is strong if a person has the authority to hire and fire or give raises in rank or pay; it is weak if a person does not have the authority to do these things.

Together, these three situational factors determine the favorableness of various situations in organizations. Situations that are rated most favorable are those having good leader–follower relations, defined tasks, and strong leader–position power. Situations that are rated least favorable have poor leader–follower relations, unstructured tasks, and weak leader–position power. Situations that are rated moderately favorable fall between these two extremes.

Based on research findings, contingency theory posits that certain styles are effective in certain situations. People who are task motivated (low LPC score) will be effective in both very favorable and very unfavorable situations—that is, in situations that are going along very smoothly or situations that are out of control. People who are relationship motivated (high LPC score) are effective in moderately favorable situations— that is, in situations in which there is some degree of certainty but things are neither completely under their control nor completely out of their control.

It is not entirely clear why leaders with high LPC scores are effective in moderately favorable situations or why leaders with low LPC scores are effective in both very favorable and very unfavorable situations. Fiedler’s (1995) interpretation of the theory adds a degree of clarity to this issue.

6.2 Least Preferred Coworker Theory 6.2 Role of Leaders

He provides the following line of reasoning for why leaders who are working in the “wrong” (i.e., mismatched) situation are ineffective:

• A leader whose LPC style does not match a particular situation experiences stress and anxiety;
• under stress, the leader reverts to less mature ways of coping that were learned in early development; and
• the leader’s less mature coping style results in poor decision making, which results in negative work outcomes.

Although various interpretations of contingency theory can be made, researchers are still unclear regarding the inner workings of the theory.

HOW DOES CONTINGENCY THEORY WORK?

By measuring a leader’s LPC score and the three situational variables, one can predict whether the leader is going to be effective in a particular setting. The relationship between a leader’s style and various types of situations is illustrated in Figure 6.1. The figure is best understood by interpreting the rows from top to bottom. For example, a situation that has good leader– member relations, a structured task, and strong position power would fall in Category 1 of preferred leadership style. Alternatively, a situation that has poor leader–member relations, a structured task, and weak position power would fall in Category 6 of leadership style. By assessing the three situational variables, one can place any organizational context in one of the eight categories represented in Figure 6.1.

Once the nature of the situation is determined, the fit between the leader’s style and the situation can be evaluated. The figure indicates that low LPCs (low LPC score) are effective in Categories 1, 2, 3, and 8, whereas high LPCs (high LPC score) are effective in Categories 4, 5, 6, and 7. Middle LPCs are effective in Categories 1, 2, and 3. If a leader’s style matches the appropriate category in the model, that leader will be effective; if a leader’s style does not match the category, that leader will not be effective.

It is important to point out that contingency theory stresses that leaders are not effective in all situations. If your style is a good match for the situation in which you work, you will succeed at your job. If your style does not match the situation, you probably will fail.

 6.2 Follower Self-Leadership 6.3 Power Poisoning

STRENGTHS

Contingency theory has several major strengths. First, it is supported by a great deal of empirical research (see Peters, Hartke, & Pohlman, 1985; Strube & Garcia, 1981). In an era in which print and electronic media abound with accounts of “how to be a successful leader,” contingency theory offers an approach to leadership that has a long tradition. Many researchers have tested it and found it to be a valid and reliable approach to explaining how effective leadership can be achieved. Contingency theory is grounded in research.

Second, contingency theory has broadened our understanding of leadership by forcing us to consider the impact of situations on leaders. Before contingency theory was developed, leadership theories focused on whether there was a single, best type of leadership (e.g., trait approach). However, contingency theory emphasized the importance of focusing on the relationship between the leader’s style and the demands of various situations. In essence, contingency theory shifted the emphasis to leadership contexts, particularly the link between the leader and the situations.

Third, contingency theory is predictive and therefore provides useful information about the type of leadership that is most likely to be effective in certain contexts. From the data provided by the LPC scale and the descriptions of three aspects of a situation (i.e., leader–member relations, task structure, and position power), it is possible to determine the probability of success for a given person in a given situation. This gives contingency theory predictive power that other leadership theories do not have.

Fourth, this theory does not require that people be effective in all situations. So often leaders in organizations feel the need to be all things to all people, which may be asking too much of them. Contingency theory argues that leaders should not expect to be able to lead in every situation. Companies should try to place leaders in optimal situations, in situations that are ideal for their leadership style. When it is obvious that leaders are in the wrong situation, efforts should be made to change the work variables or move the leader to another context. Contingency theory matches the leader and the situation, but does not demand that the leader fit every situation.

Fifth, contingency theory provides data on leaders’ styles that could be useful to organizations in developing leadership profiles. The LPC score is

6.3 Healthcare Providers 6.3 Global Mindset

one piece of information that could be used, along with other assessments in human resource planning, to develop profiles on individuals to determine how and where they would best serve an organization.

CRITICISMS

Although many studies support the validity of contingency theory, it has also received much criticism in the research literature. A brief discussion of these criticisms will help to clarify the overall value of contingency theory as a leadership theory.

First, contingency theory has been criticized because it fails to explain fully why people with certain leadership styles are more effective in some situations than in others. Fiedler (1993) called this a “black box problem” because a level of mystery remains about why task-motivated leaders are good in extreme settings and relationship-motivated leaders are good in moderately favorable settings.

The answer provided by the theory for why leaders with low LPC scores are effective in extremes is that these people feel more certain in contexts where they have a lot of control and are comfortable strongly exerting themselves. On the other hand, high LPCs are not effective in extreme situations because when they have a lot of control, they tend to overreact; when they have little control, they tend to focus so much on relationships that they fail to do the task. In moderate situations, high LPCs are effective because they are allowed to focus on relationship issues, whereas low LPCs feel frustrated because of the lack of certainty. Because critics find these explanations somewhat inadequate, contingency theory is often challenged.

A second major criticism of this theory concerns the LPC scale. The LPC scale has been questioned because it does not seem valid on the surface, it does not correlate well with other standard leadership measures (Fiedler, 1993), and it is not easy to complete correctly.

The LPC scale measures a person’s leadership style by asking the person to characterize another person’s behavior. Because projection is involved in the measure, it is difficult for respondents to understand how their descriptions of another person on the scale reflect their own leadership style. It does not make sense, on the surface, to measure your style through your evaluations of another person’s style.

 6.2 Fiedler’s Contingency Theory

Although it may not be adequate for many people, the answer to this criticism is that the LPC scale is a measure of a person’s motivational hierarchy. Those who are highly task motivated see their least preferred coworker in a very negative light because that person gets in the way of their own accomplishment of a task. The primary need for these people is to get the job done, and only their secondary needs shift toward people issues. On the other hand, those who are relationship motivated see their least preferred coworker in terms that are more positive because their primary need is to get along with people, and only their secondary needs revolve around tasks. In short, the LPC scale measures a respondent’s style by assessing the degree to which the respondent sees another person getting in the way of his or her own goal accomplishment.

Although it takes only a few minutes to complete, the instructions on the LPC scale are not clear; they do not fully explain how the respondent is to select his or her least preferred coworker. Some respondents may get confused between a person who is their least liked coworker and one who is their least preferred coworker. Because their final LPC score is based on whom they choose as a least preferred coworker, the lack of clear directions on whom to choose as a least preferred coworker makes the LPC measure problematic.

Although Fiedler and his colleagues have research to back up the test– retest reliability of the LPC scale (Fiedler & Garcia, 1987), the scale remains suspect for many practitioners because it lacks face validity. Another criticism of contingency theory is that it is cumbersome to use in real-world settings. It is cumbersome because it entails assessing the leader’s style and three complex situational variables (leader–member relations, task structure, and position power), each of which requires a different instrument. Administering a battery of questionnaires in ongoing organizations can be difficult because it breaks up the normal flow of organizational communication and operations.

A final criticism of contingency theory is that it fails to explain adequately what organizations should do when there is a mismatch between the leader and the situation in the workplace. Because it is a personality theory, contingency theory does not advocate teaching leaders how to adapt their styles to various situations as a means to improve leadership in an organization. Rather, this approach advocates that leaders engage in situational engineering, which means, in essence, changing situations to fit the leader. Although Fiedler and his colleagues argue that most situations can be changed in one respect or another to fit the leader’s style, the

6.4 Leader Behavior Diagnostics

prescriptions for how one engages in situational engineering are not clearly set forth in the theory.

In fact, situations are not always easily changed to match the leader’s style. For example, if a leader’s style does not match an unstructured, lowpower situation, it may be impossible to make the task more structured and increase the position power to fit the leader’s style. Similarly, progression up the management ladder in organizations may mean that a leader moves into a new situation in which her or his style does not fit. For example, a manager with a high LPC (relationship-motivated) score might receive a promotion that places her in a context that has good leader–member relations, task structure, and position power, thus rendering her ineffective according to contingency theory. Certainly, it would be questionable for a company to change this situation, which otherwise would be considered nearly ideal in most ways. Overall, changing the situation can result in positive outcomes, but this does present significant workability problems for organizations.

APPLICATION

Contingency theory has many applications in the organizational world: It can be used to answer a host of questions about the leadership of individuals in various types of organizations. For example, it can be used to explain why a person is ineffective in a particular position even though the person is a conscientious, loyal, and hardworking manager. In addition, the theory can be used to predict whether a person who has worked well in one position in an organization will be equally effective if moved into a quite different position in the same company. Furthermore, contingency theory can point to changes that upper management might like to make in a lower-level position in order to guarantee a good fit between an existing manager and a particular work context. These are just a few of the ways in which this theory could be applied in organizational settings.

CASE STUDIES

The following three case studies (Cases 6.1, 6.2, and 6.3) provide leadership situations that can be analyzed and evaluated from the perspective of contingency theory. As you read the cases, try to diagnose them using the

 6.5 Contingency Approach 6.4 Leadership Effectiveness

principles of contingency theory. It will be helpful to try to categorize each case using information provided in Figure 6.1. At the end of each case, a series of questions will help you analyze the case.

CASE 6.1

No Control Over the Student Council

Tamara Popovich has been elected president of the student council at the local college she attends. She likes the other council members, and they seem to like her. Her first job as president of the council is to develop a new policy for student computer fees. This is the first year that computer fees are being assessed, so there are no specific guidelines for what should be included in this policy. Because the council members are elected by the student body, Tamara has no control over how they work, and has no way of rewarding or punishing them. In a leadership course Tamara took, she filled out the LPC questionnaire, and her score was 98.

Questions

1. How will Tamara do as president of the student council?
2. According to her LPC score, what are her primary needs?
3. How will these needs affect her ability to develop the new policy for computer fees?
4. How can Tamara change the situation to match her management style?

CASE 6.2

Giving Him a Hard Time

Bill Smith has been the high school band teacher for 15 years. Every year, he is in charge of planning and conducting a different type of concert for the holidays. This year, his plan is to present a special jazz program in conjunction with the senior choir. For some reason, the band and choir members have it in for Bill and are constantly giving him trouble. Band and choir are extracurricular activities in which students volunteer to participate. While taking a management class at a local university, Bill took the LPC scale, and his score was 44.

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Questions

1. According to Figure 6.1, what category does this situation fall into?
2. Will Bill be successful in his efforts to run the holiday program?
3. Should the school administration make any changes regarding Bill’s position?

CASE 6.3

What’s the Best Leader Match?

Universal Drugs is a family-owned pharmaceutical company that manufactures generic drugs such as aspirin and vitamin pills. The owners of the company have expressed a strong interest in making the management of the company, which traditionally has been very authoritarian, more teamwork oriented.

To design and implement the new management structure, the owners have decided to create a new position. The person in this position would report directly to the owners and have complete freedom to conduct performance reviews of all managers directly involved in the new system. Two employees from within the company have applied for the new position.

Martha Lee has been with Universal for 15 years and has been voted by her peers “most outstanding manager” on three different occasions. She is friendly, honest, and extremely conscientious about reaching shortterm and long-term goals. When given the LPC scale by the personnel department, Martha received a score of 52.

Bill Washington came to Universal 5 years ago with an advanced degree in organizational development. He is director of training, where all of his subordinates say he is the most caring manager they have ever had. While at Universal, Bill has built a reputation for being a real people person. Reflecting his reputation is his score on the LPC scale, an 89.

Questions

1. According to contingency theory, which of the two applicants should the new owner choose to head the new management structure? Why?
2. Could the owner define the new position according to contingency theory in such a way that it would qualify one of the applicants more than the other?
3. Will Universal Drugs benefit by using contingency theory in its decision making regarding its new management structure?

LEADERSHIP INSTRUMENT

The LPC scale is used in contingency theory to measure a person’s leadership style. For example, it measures your style by having you describe a coworker with whom you had difficulty completing a job. This need not be a coworker you disliked a great deal but rather someone with whom you least liked to work. After you have selected this person, the LPC instrument asks you to describe your coworker on 18 sets of adjectives.

Low LPCs are task motivated. Their primary needs are to accomplish tasks, and their secondary needs are focused on getting along with people. In a work setting, they are concerned with achieving success on assigned tasks, even at the cost of poor interpersonal relationships with coworkers. Low LPCs gain self-esteem by achieving their goals. They may attend to interpersonal relationships, but only after they first have directed themselves toward the tasks of the group.

Middle LPCs are socioindependent. In the context of work, they are self-directed and not overly concerned with the task or with how others view them. They are more removed from the situation and act more independently than low or high LPCs.

High LPCs are motivated by relationships. These people derive their major satisfaction in an organization from interpersonal relationships. A high LPC sees positive qualities even in the coworker she or he least prefers, and even if the high LPC does not work well with that person. In an organizational setting, the high LPC attends to tasks, but only after she or he is certain that the relationships between people are in good shape.

Least Preferred Coworker (LPC) Measure

Instructions: Think of the person with whom you can work least well. He or she may be someone you work with now or someone you knew in the past. That person does not have to be the person you like the least but should be the person with whom you had the most difficulty in getting a job done. Describe this person as he or she appears to you by circling the appropriate number for each of the following items.

SOURCE: Adapted from “The LPC Questionnaire,” in Improving Leadership Effectiveness by Fiedler, F. E., & Chemers, M. M. Copyright © 1984. Reprinted with permission.

Scoring Interpretation

Your final LPC score is the sum of the numbers you circled on the 18 scales. If your score is 57 or below, you are a low LPC, which suggests that you are task motivated. If your score is within the range of 58 to 63, you are a middle LPC, which means you are independent. People who score 64 or above are called high LPCs, and they are thought to be more relationship motivated.

Because the LPC is a personality measure, the score you get on the LPC scale is believed to be quite stable over time and not easily changed. Low LPCs tend to remain low, moderate LPCs tend to remain moderate, and high LPCs tend to remain high. As was pointed out earlier in the chapter, research shows that the test–retest reliability of the LPC is very strong (Fiedler & Garcia, 1987).

SUMMARY

Contingency theory represents a shift in leadership research from focusing on only the leader to focusing on the leader in conjunction with the situation in which the leader works. It is a leader–match theory that emphasizes the importance of matching a leader’s style with the demands of a situation.

To measure leadership style, a personality-like measure called the Least Preferred Coworker (LPC) scale is used. It delineates people who are highly task motivated (low LPCs), those who are socioindependent (middle LPCs), and those who are relationship motivated (high LPCs).

To measure situations, three variables are assessed: leader–member relations, task structure, and position power. Taken together, these variables point to the style of leadership that has the best chance of being successful. In general, contingency theory suggests that low LPCs are effective in extremes and that high LPCs are effective in moderately favorable situations.

The strengths of contingency theory include these: It is backed by a large amount of research, it is the first leadership theory to emphasize the impact of situations on leaders, it is predictive of leadership effectiveness, it allows leaders not to be effective in all situations, and it can provide useful leadership profile data.

On the negative side, contingency theory can be criticized because it has not adequately explained the link between styles and situations, and it relies heavily on the LPC scale, which has been questioned for its face validity and workability. Contingency theory is not easily used in ongoing organizations. Finally, it does not fully explain how organizations can use the results of this theory in situational engineering. Regardless of these criticisms, contingency theory has made a substantial contribution to our understanding of the leadership process.

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6.3 Chapter Summary

REFERENCES

Fiedler, F. E. (1964). A contingency model of leadership effectiveness. In L. Berkowitz (Ed.), Advances in experimental social psychology (Vol. 1, pp. 149–190). New York: Academic Press.

Fiedler, F. E. (1967). A theory of leadership effectiveness. New York: McGraw-Hill.

Fiedler, F. E. (1993). The leadership situation and the black box in contingency theories. In M. M. Chemers & R. Ayman (Eds.), Leadership, theory, and research: Perspectives and directions (pp. 1–28). New York: Academic Press.

Fiedler, F. E. (1995). Reflections by an accidental theorist. Leadership Quarterly, 6(4), 453–461.

Fiedler, F. E., & Chemers, M. M. (1974). Leadership and effective management. Glenview, IL: Scott, Foresman.

Fiedler, F. E., & Chemers, M. M. (1984). Improving leadership effectiveness: The leader match concept (2nd ed.). New York: Wiley.

Fiedler, F. E., & Garcia, J. E. (1987). New approaches to leadership: Cognitive resources and organizational performance. New York: Wiley.

Peters, L. H., Hartke, D. D., & Pohlman, J. T. (1985). Fiedler’s contingency theory of leadership: An application of the meta-analysis procedures of Schmidt and Hunter. Psychological Bulletin, 97, 274–285.

Strube, M. J., & Garcia, J. E. (1981). A meta-analytic investigation of Fiedler’s contingency model of leadership effectiveness. Psychological Bulletin, 90, 307–321.