CONTINGENCY

THEORY
PREPARED BY: BLOCK B
 TABLE OF CONTENTS

01 DEFINITION
DEFINITION 02 THEORY

03 EXAMPLE
EXAMPLE 04 SUMMARY
SUMMARY
 CONTINGENCY APPROACH TO MANAGEMENT

This theory attempts to predict:

★ style of leadership;

★ leader member relations;

★ power vested in the position of leader; and

★ structure of the job or task harmonize

to determine the leader's ability to achieve productive output.

 CONCEPT

A leader must recognized various

leadership styles,hence applicable
at every other situations.
FRED FIELDER
● The Fielder
Contingency
Model was
created mid-
1960’s.
● A scientist who
studied
personality and
characteristics
of leaders.
 2
FACTORS 1. Leadership style

2. Situational favorableness

A
 LEADERSHIP STYLE
0001

● Fielder firmly believed that this style is

fixed.

● Measured using a scale he developed

called
“Least-Preferred Co-worker (LCP) Scale”
 Least-Preferred
Co-worker (LCP) Scale
Name: Scoring
Final score is the total of the numbers
encircled in the scale.
Venus has a beautiful name
● 57 or less = Low LCP
Title: (Task motivated)

● 58 to 63 = Middle LCP (Socio-

independent leaders, task or how
Author: with others view them)
● 64 or above = High LCP (Motivated
Jenna Doe by relationship)
 SITUATIONAL FAVORABLENESS

LEADER-MEMBER
TASK STRUCTURE POSITION POWER
RELATIONS
Control subordinates
Leader is supported Task with clear goals and through reward and

procedures punishment
by group members
Example:

Relationship between independent variable and

dependent variable in the study of organizational
behaviors:

❏ Independent variables (x) are the cause of the change in

the dependent variable; while

❏ Dependent variables (y) are a response affected by an

independent variable.
Cheapo Pharmacy has been trying to improve and perfect their
organization by studying different variables that affect employees and
their service. Companies need to use trial and error to see what
variables provide the results needed.

❏ Motivation and leadership are incorporated as the independent

variables; while

❏ productivity, turnover and absenteeism are referred as the dependent

variables.
 Managers at Cheapo Pharmacy aims to
decrease turnover, or workers quitting and
END leaving for other positions.

RESULT End result:

The Cheapo Pharmacy planned to improved

worker job satisfaction towards keeping up
with the sales and profits. Thus,
contingency theory independent variables
leads to solve the conflict in the company.
 Practical Applications of the
In the organizational world
Theory
 Can be used to  Can help determine  Can help in
assess the a person’s suitability implementing
effectiveness of an changes in the roles
to a position in and responsibilities
individual in a comparison to that management
particular role and preceding position might need to make
look at the reasons using performance to bring effectiveness
for one’s and tendencies as to the role of the
effectiveness or base person leading the
ineffectiveness. same.
 APPLICATION
APPLICATION OF
OF CONTINGENCY
CONTINGENCY THEORY
THEORY TO
TO PHARMACY
PHARMACY
MANAGEMENT
MANAGEMENT AND
AND LEADERSHIP
LEADERSHIP
Case Scenario:

A family owned pharmaceutical company, Universal Drugs, was looking to change to a more team-work
oriented management environment by promoting one of two internal employees. The newly created position gave the
new manager freedom to conduct performance reviews and report directly to the owners.

The owners can use the contingency theory to define the new role to qualify one of the applicants more than
the other. They would define the task structure aspects of the job; completing performance reviews. The importance of
relationship building through training and coaching of the employees and the ability to diffuse difficult situations is
important.

Universal Drugs can benefit from the contingency theory in the decision making by understanding that the
theory does have flaws. Those who employ this theory do not learn to change their approach to match the situation;
they change the situation to match their leadership style.
 Contingency  The accounting information system must be
Theory on Relation flexible enough to include environmental and
to Accounting to organizational structure in consideration.
 
Pharmacy
 Information system must have a changeable
Management
nature to adapt to change in circumstances.

 Despite its weaknesses, it is accepted by

researchers for having been a useful approach
to fix leadership and control issues in the
management department.
 FOUR IMPORTANT IDEAS

1. There is no limitation in providing ways towards a successful

managing strategies.
2. The planned action must be applicable in the vicinity.
3. Efficacy of the institutions must also recognized the subsystems.
4. End result is achieved successfully through recognizing proper
management style, appropriate both to the tasks and work group.
 SUMMARY
SUMMARY:

Contingency theory, a class of behavioral theory that emphasizes that there is no best way in leading and that
leadership style is effective in some situation which may not be successful in others. Leadership style is dependent
upon various internal and external constraints.

Limitations may include scope of organization, how it adjusts to its situation, variations among supplies and
operational pursuits, schemes, technologies used, etc.

CT of leadership

Success of the leader is a function of various possibilities in the form of subordinate, task, and/or group variables. The
effectivity set by the leader is dependent among the demands and needs of the situation. CT of leadership advocates
the different styles of leadership that fits to the needs created by organizational situations.
 RESOURCES
Situational (Contingency) Approaches to Leadership. (2019). Openstax. Retrieved from
https://opentextbc.ca/principlesofmanagementopenstax/chapter/situational-contingency-approaches-to-leadership/

Contingency Theory Examples (Page 1) - Line.17QQ.com. (2021). Retrieved 28 April 2021, from
https://line.17qq.com/articles/sehwuqcrx.html

Management.net, �. (2021). Summary of Contingency Theory (Fiedler, Hersey, Blanchard). Abstract. Retrieved 28 April 2021, from
https://www.valuebasedmanagement.net/methods_contingency_theory.html#:~:text=Contingency%20theories%20(CT)%20are%20a,not%
20be%20successful%20in%20others

(2021). Retrieved 28 April 2021, from

https://study.com/academy/lesson/contingency-theory-definition-and-significance-to-organizational-behavior.html#:~:text=For%20example
%2C%20Cheapo%20Toys%20is,is%20causing%20the%20employee%20turnover
.

(2021). Retrieved 28 April 2021, from

https://study.com/academy/lesson/contingency-approach-of-management-definition-example-quiz.html
Frank-Smith. (2015, February 23). PennState. Retrieved from sites.psu.edu: https://sites.psu.edu/leadership/2015/02/23/contingency-
theory-and-the-job-application/
 RESOURCES
Gordon. (1976). Retrieved from scholar.rhsmith.umd.edu: https://sites.psu.edu/leadership/2015/02/23/contingency-theory-and-the-job-application/

Islam, H. (2012, February 1). Retrieved from academicjournals.org: https://academicjournals.org/article/article1380711715_Islam%20and%20Hu.pdf

Soares, M.-A. (2019, February). ResearchGate. Retrieved from researchgate.net:

https://www.researchgate.net/publication/331315932_Relationship_between_environment_structure_and_efficiency_in_contingency_the
ory_a_systematic_review_of_literature

Suleiman, A. Y. (2018, July). ResearchGate. Retrieved from researchgate.net:

https://www.researchgate.net/publication/326156499_Explored_and_Critique_of_Contingency_Theory_for_Management_Accounting_Re
search

Vidal, C. R. (2017, December 5). SAGE journals. Retrieved from journals.sagepub:

https://journals.sagepub.com/doi/full/10.1177/1847979017743172

Frederick. (2016, January/March). Contingency Management of Health Care Organizations: It Depends. Retrieved May 1, 2021, from National Center
for Bioetechnology Information: https://pubmed.ncbi.nlm.nih.gov/?term=Olden+PC&cauthor_id=27892910

Team, I. E. (2020, December 4). Understanding the Contingency Theory of Leadership. Retrieved May 1, 2021, from Indeed:
https://www.indeed.com/career-advice/career-development/contingency-theory-of-leadership

 
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