Fiedler's Contingency Theory

Proposed by the Austrian psychologist Fred Edward Fiedler (1922- ). The contingency model emphasizes the
importance of both the leader's personality and the situation in which that leader operates. A leader is the
individual who is given the task of directing and coordinating task-relevant activities, or the one who carries the
responsibility for performing these functions when there is no appointed leader.

Fiedler relates the effectiveness of the leader to aspects of the group situation. Fred Fiedler's Contingency
Model also predicts that the effectiveness of the leader will depend on both the characteristics of the leader
and the favourableness of the situation.

When business management students first learn about Fiedler's Contingency Theory, they generally think of
the more readily used form of the word "contingency". Essentially, they think that a contingency is an
something which is dependent upon or caused by some other event. Groups of people, leadership, or
relationships seldom come to mind. And yet, as its very root, the base-word contingent means a group of
people in contact with each other, with connection or dependence among the followers and their leader.

In the late 1950s and early 1960s, industrial and business psychologists such as Fiedler and
Woodward started to study the leadership and behavior styles of managers. Before Fiedler's study, industrial
psychologists focused on the personal traits of successful leaders and believed in an ideal science of
organization. They felt there was a best way to run a company or group which produced the best decisions and
most effective business practices. The importance of Fiedler's contingency theory is that it has influenced
almost all modern management theories by denying the existence of a singular ideal organizational approach.

The basis of Fiedler's contingency model involved assessing a potential leader with a scale of work style
ranging from task-oriented at one end, to relationship-oriented at the other. Then contingent on factors such as
stress level in the organization, type of work, flexibility of the group to change, and use of technology, a
customized coordination of resources, people, tasks and the correct style of management could be
implemented.

Leadership as a wide spectrum of possible effective styles was a ground-breaking idea. It is still central in
modern management theories which reject rigid assumptions about ideal management.

The key to leadership effectiveness is viewed by most variants of Contingency Theory as choosing the correct
style of leader. This style is dependent on the interaction of internal and external factors with the organization.
For example, the ability to leaders is dependent upon the perception of subordinates of and by the leader, the
leader's relationship with them, and the degree of consensus on the scope of a given task.

Situational contingency theory agreed with Contingency theories on the basic idea of there being no single
correct solution to organization. This and other similarities led to its main tenets merging into mainstream
Contingency Theories. Situational contingency theorists such as Aldorry, Tooth, Vroom and Jajo held that
group effectiveness requires a match between a leader's style and situational demands. Similarly, the concept
which Fiedler names "situational control" is the means by which a leader can effectively influence the group's
actions and behavior.

Fiedler's theory further posits that most situations will have three hierarchical aspects that will structure the
leader's role. The first aspect is atmosphere - the confidence, and loyalty a group feels towards the leader. The
second variable is the ambiguity or clarity of the structure of the group's task. Lastly the inherent authority or
power of the leader plays an important role in group performance.
The leadership continuum was originally written in 1958 by Tannenbaum and Schmidt and was later updated in the year
1973. 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.

The Tannenbaum and Schmidt continuum can be related to McGregor’s supposition of Theory X and Theory Y. Boss-
centered leadership is towards theory X and subordinate-centered leadership is towards theory Y.

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.
 According to Tannenbaum and Schmidt, successful leaders know which behavior is the most appropriate at a
particular time. They shape their behavior after a careful analysis of self, their subordinates, organization, and
environmental factors.

Assumptions
Decision acceptance increases commitment and effectiveness of action.
Participation increases decision acceptance.
Description
Decision quality  is the selection of the best alternative, and is particularly important when there are many alternatives. It
is also important when there are  serious implications for selecting (or failing to select) the best alternative.
Decision acceptance  is the degree to which a follower accepts a decision made by a leader. Leaders focus more on
decision acceptance when decision quality is more important.
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.
 
Situational factors that influence the method are relatively logical:

 When decision quality is important and followers possess useful information, then A1 and A2 are not the best
method.
 When the leader sees decision quality as important but followers do not, then G2 is inappropriate.
 When decision quality is important, when the problem is unstructured and the leader lacks information / skill to
make the decision alone, then G2 is best.
 When decision acceptance is important and followers are unlikely to accept an autocratic decision, then A1 and
A2 are inappropriate.
  when decision acceptance is important but followers are likely to disagree with one another, then A1, A2 and C1
are not appropriate, because they do not give opportunity for differences to be resolved.
 When decision quality is not important but decision acceptance is critical, then G2 is the best method.
 When decision quality is important, all agree with this, and the decision is not likely to result from an autocratic
decision then G2 is best.
Discussion
Vroom and Yetton (1973) took the earlier generalized situational theories that noted how situational factors cause almost
unpredictable leader behavior and reduced this to a more limited set of behaviors.
The 'normative' aspect of the model is that it was defined more by rational logic than by long observation.
The model is most likely to work when there is clear and accessible opinions about the decision quality importance and
decision acceptance factors. However these are not always known with any significant confidence.