CONTINGENCY AND SITUATIONAL LEADERSHIP

 The essence of a contingency approach of leadership is that leaders are most effective when
they make their decisions based on situational factors including characteristics of group
members.
 Results of a research comparing leaders from a sample of 35 fortune 500 companies and
those from 35 Inc. companies.
o Inc. CEO significantly exceeded F500 CEOs in developing and implementing technical
ideas.
o The large-company CEOs had a significantly better developed sub-set of inter-
personal skills.
 Fiedler’s Contingency Theory of Leadership Effectiveness
o The best style of leadership is determined by the situation in which the leader is
working in.
o The least preferred employee Scale (LPC)
 Leadership can be relationship oriented or task oriented.
 Relatively permanent aspect and mgrs. Should work in situations theat suit
their style.
 LPC scale helps determining a mgr’s leadership style by seeing how they
describe employees they would like to work with the least.
 Situations can be of high, moderate and low control.
 3 dimension for control classification:-
 Leader-member relations
 Task structure
 Position power
 A leader will have the best control if he enjoys a good leader-member
relationship equation.
 Findings state that task oriented leaders perform well in both low and high
control situations while relationship oriented leaders do well in situations of
moderate control.
 A situation can be made more condusive to best match one’s leadership
style. For eg. To increase control:-
 Task structure: being more specific about one expectations,
providing deadlines, showing examples of acceptable work and
providing written instructions.
 Leader member relations: Display interest
 Position Power: request more formal authority
o Evaluation
 A major problem lies in matching the situation to the leader.
 If a relationship oriented leader finds himself in a situation becoming too
favourable to exercise control, it is doubtful he or she can be transferred to
a less favourable position.
 Path-Goal Theory of Leadership effectiveness by Robert House
o Based on the expectancy theory of motivation.
o A manager should choose his leadership style depending on the characteristics of his
subordinates and the demands of the task
o The type of subordinates is determined by how much control they think they have
on the environment and how well they think they can do the assigned task.
o Environmental contingency factors:-
 The tasks of the group members
 The work groups
 The authority system within the organisation
o Leadership styles

Participative Consultative Improving morale of

well-motivated
employees who have
non-repetitive tasks
Achievement oriented Challenging goals, pushing Ambiguous and non-
for improvement repetitive tasks
Directive Planning, organising, Unclear tasks or when
controlling direction improves
morale
Supportive Concern, emotionally Dissatisfying, stressful or
supportive frustrating tasks
 The styles can very well be used in combination.
 How the leader improves performance
o Recognise or activate group members needs
o Provide personal pay-offs subject to good performance
o Specify the clear path to personal pay-offs
Clarify expectations and hoe efforts will lead to performance and performance to
rewards
o Increase opportunities for personal satisfaction subject to effective performance.
o Reduce frustrating barriers in the path of achieving goals
o Do not irritate employees by instructing them on something they already know well
o Make clear the desired ability of goals to the group members.
 The Hershey-Blanchard Situational Leadership Model
o It bases leadership style primarily on characteristics of group members
o The word model is used as unlike other theories it does not state why things happen
as generally a theory does, but instead suggests some procedures that can be
repeated.
o Task behaviour are the extent to which leader spells out duties and responsibilities.
o Relationship behaviour is the extent of engaging in two way or multi way
communication.
Diagrammatic Representation:

 Readiness in situational leadership is the extent to which a group has the ability or
willingness or confidence to accomplish a specific task. It is therefore, more task oriented
than a trait or characteristic.
 As the group readiness increases, a leader should focus more on a relationship behaviour.

 Evaluation
o Corroborates common sense and therefore appealing.
o Model represents categories and guidelines so precisely that it reflects infallibility.
o In reality, leadership decisions are not as clear cut as the quadrant system suggests.
 o Research findings have been mixed. There are very few cases in which high tsk high
relationship orientation does not produce results.

 Contingency Leadership in the Executive Suite

systematic, dispassionate and structured

approach to strengths and weaknesses
suitable in an unstable environment
Strategic Creating, testing and designing long term where the volume and pace of change are
approach business strategy high or CEOs need to frequently make
80% CEOs time in external factors such as decisions of enormous consequence
customers, competitors, technological
advances and market trends
useful in cases where a comoany has far
The CEO and the corporate staff add flung operations and the business
value to the company by hiring, retaining managers are better equipped to
and developing employees formulate strategy than tose in the
Human corporate group
assets
contingency factor favouring this
approach Useful in situations where business unit
approach is when CEOs feel strongly that
managers are to be developed to such an
the company's values and standards are
extent that they can make decisions the
essential for the success of the
way a CEO would
organisation
add value by selecting, disseminating and
continually updating an area of expertise
which will give the company a contingency factor is if possessing certain
Expertise competitive edge expertise can give the firm a distinct
Approach
Employees with good technical expertise competitive advantage
who share it across organisational units
are rewarded
Creates value by creating,
communicating and overseeing an explicit
set of controls like rules, financial done to ensure uniform and predictable
Box measures, procedures etc. experiences for employee and customer
Approach and to lower risks in areas such as
Rewards employees whose behaviour banking or nuclear power plants.
and performance match the control
standards
CEOs who insists on a complete process
of reinvention if such change entails short It arises when the CEO feels that a lack of
term disturbances such as anxiety, change will be the company's undoing
Change confusion or poorer financial results
Agent
Approach The contingency factor is not something
such CEOs spend around 75% of their
visible but rather the CEOs vision that
time giving meetings, speeches and urging
troubles lie ahead unless the company
their employees to accept change
changes now