How Leaders Adapt to the Contingency Theory of Leadership

The Oxford Dictionary defines contingency as “a future event or circumstance which is possible but cannot be predicted with certainty.” Contingency in leadership means a leader’s and/or a company’s ability to adjust their approach based on the situation. The idea behind it is that leaders or organisations cannot stick to one approach to lead a team and be effective always.

Leadership is a complex topic that has evolved over the last two centuries. Researchers, psychologists, and businesspeople have always focused on what makes a good leader. 

The first of the leadership theories propounded that some benchmarked characteristics of great leaders in history were common enough to qualify as one. Rooted within this thought, the approach evolved to traits necessary for leadership, adding a tad of empiricism. Then studies in Ohio and Michigan universities explored the connection between leadership and human behaviour. 

These areas of study further trickled down to the contingency theory of leadership roughly around the 1960s that looked into circumstances. This theory takes into account the limitations of the behavioural leadership framework. 

For instance, one major limitation of choosing leadership based on behaviour is that it does not take into account emotions and context. A leader with a specific behavioural pattern can be effective for one situation, but not all. So is the concept of choosing a different leader for a different situation instead of relying on them to forcefully change their style of leadership. 

What is the Contingency Theory of Leadership?

The Contingency Theory of Leadership refers to the concept that there is no universal or “one-size-fits-all” approach to effective leadership. 

Simply put, the definition of an effective leader is contingent upon a range of situational variables. The characteristics of the leader, the followers, and the context in which leadership occurs are interconnected.

This theory emphasises the need for leaders or companies to adapt their styles based on the specific demands and circumstances they face.

Key Components of the Contingency Theory of Leadership

• Leadership Styles: Contingency theory acknowledges that different leadership styles may be more or less effective depending on the situation. For instance, a directive style of leadership might be appropriate in situations where tasks are ambiguous and team members lack experience. Sometimes a more participative style is better for a team that has only skilled professionals.

• Situational Factors: The theory broadly highlights the importance of situational factors in determining the optimal leadership approach. These factors can include the nature of the task, the level of task structure, the level of team member experience, and the external environment. Effective leaders assess these factors to determine the most suitable style. So does companies by hiring leaders for specific contexts. 

• Matching Leadership to Situations: The base of this theory lies in the concept of “fit.” This means that the most effective leadership style is contingent upon the specific requirements of a given task or project.

• Leader-Member Relations: The quality of relationships between leaders and their team members is considered a critical variable. When relationships are positive and trust is established, a leader may have more latitude in selecting an appropriate leadership style.

All these components show that there is no single style of leadership that is effective for all situations. 

4 Important Models of Contingency Theory of Leadership

There are different frameworks in the broad contingency theory of leadership. But one of the notable names you will come across is Fred Fiedler. An Austrian psychologist, he is the founder of the original contingency leadership model in his book, A Theory of Leadership (1967). 

After this, there were three more models that came to the fore. 

• Situational Leadership Theory by Hersey and Blanchard
• Path-Goal Theory by Robert House
• Normative Decision Theory, aka the Vroom-Yetton model

All these contingency theories of leadership are based upon different situations. Let’s understand these models, bit by bit.  

Contingency Model of Fred Fiedler

Fiedler’s contingency theory is fairly simple. The psychologist discusses that the leadership style is fixed, but the effectiveness can be improved when the tasks are restructured. 

One of the main components of this model is the LPC (Least Preferred Coworker) scale that helps identify the effectiveness of a leader in two different ways. 

One is task oriented, and the other, relationship oriented. The task oriented leader is focused on completing tasks, while the relationship oriented leader gives more importance to nurturing relationship. 

The LPC scale also prompts leaders to recall their past collaborators and rate their least successful partnership using 1 to 8 bipolar scales. 

Here is a screenshot example of the LPC scale.

Source: Slideshare

Interpretation of the LPC Score

A high LPC score of above 73 shows that the leader is relationship-oriented. In contrast, the leader with a low LPC score of below 54 is task-oriented. There are leaders who can have an average LPC score of between 55 and 72. This middle-ground shows they are both relationship- and task-oriented. 

To explain the favourableness of the situation, the Fiedler model also takes into account another approach. That is the leader’s ability to control the situation of the group. 

Source: Wikipedia

This ability is determined by three key factors. 

• Leader-Member Relations: This factor reflects the degree of trust and confidence that exists between the leader and their team members. If the relationship is positive, with mutual respect and understanding, the situation is considered favourable.
• Task Structure: This factor refers to the clarity and structure of tasks. If tasks are well-defined and structured, the situation is considered more favourable.
• Leader’s Position Power: This factor relates to the leader’s formal authority and power to influence and control the team. A leader with high position power has a more favourable situation.

Situational Leadership Model of Hersey and Blanchard

The Situational Leadership Model, developed by Paul Hersey and Ken Blanchard, is a leadership theory that focuses on adapting leadership styles based on the readiness level of followers. 

The model suggests that effective leadership involves adjusting one’s approach according to the specific needs and capabilities of the individuals being led. It proposes four main leadership styles. 

The model categorises leadership styles into four quadrants.

• Directing (Telling): In this style, leaders provide specific instructions and closely supervise followers who are new to a task or lack the necessary skills. The leader takes a directive role and makes decisions for the group.

Related Read: Directing in Management

• Coaching (Selling): Leaders use a coaching approach when followers have some experience but still require guidance and support. The leader maintains a higher level of involvement and provides explanations and feedback.

• Supporting (Participating): This style involves providing support and encouragement to followers who are moderately skilled and experienced. The leader collaborates with the followers and facilitates their decision-making process.

Related Read: Decision-making process in management

• Delegating: In this style, leaders delegate tasks and decision-making to followers who are highly skilled and experienced. 

The model’s core idea is that a leader should be able to assess the readiness level of their followers and adapt their leadership style accordingly. “Readiness” is determined by the follower’s competence (skills and knowledge) and their commitment (motivation and confidence) to perform a specific task or role.

Path-Goal Theory

The Path-Goal Theory was developed by Robert House. It is considered to be one of the most effective context-based leadership models. 

This framework discusses that the leader’s primary role is to facilitate followers’ achievement of goals. The leader has to clarify the path to success and provide the necessary support. 

This can be achieved through four main leadership styles.

• Directive Leadership: Providing clear instructions and expectations to followers.
• Supportive Leadership: Offering emotional support, creating a positive work environment, and addressing followers’ needs.
• Participative Leadership: Involving followers in decision-making and seeking their input.
• Achievement-Oriented Leadership: Setting challenging goals and expressing confidence in followers’ abilities.

Vroom Yetton Model

This was developed by Victor Vroom and Philip Yetton in the book Leadership and Decision-Making (1973).

Here is a screenshot of the model. 

Source: MindTools

Looking at the screenshot above, in this framework, there are seven questions. 

1. Is the quality of the decision important?
2. Is the team commitment to the decision important?
3. Do you have enough information to make the decision on your own?
4. Is the problem well structured?
5. If you made the decision yourself? Would the team support it?
6. Does the team share organisational goals?
7. Is conflict amongst the team over the decision likely?

All these questions can be answered with yes or no (Y/N). So when you answer each of the questions in the decision tree, you can reach five types of scenarios to make the right decisions as a leader. 

• Autocratic (A1): You are a leader who utilises the knowledge already at hand. You do not need any feedback from your followers.

• Autocratic (A2): Your team supports your autocratic leadership style. But you engage your team and extract specific information. This helps you pave the path for your future decision. 

• Consultative (C1): As a leader, you present the scenario to your teammates. You also individually gather the opinions of your team members. Collective discussions are not present in this style. The decision you make is the best of all individual discussions you’ve had. 

• Consultative (C2): You take the final decision but with collective input from all team members. 

• Collaborative (G2): The final decision is consensual with the team members’ inputs. 

Can Contigency Theory of Leadership Work for Small Businesses?

Contingency theory can be particularly relevant and effective in guiding leadership practices within small businesses. Here are some reasons. 

1. Contingency theory recognizes that the effectiveness of leadership depends on various situational factors such as the nature of the task, the maturity of employees, and the organizational culture. In a small business setting, where resources and capabilities may be limited, understanding and responding to these contextual factors is crucial for effective leadership. 
2. Small businesses typically experience rapid growth and frequent changes in market conditions. Contingency theory recognises the dynamic nature of organisations and emphasises the need for leaders to adapt their approach as circumstances evolve. Small business leaders can use contingency theory to anticipate and respond to changes in the business environment, adjusting their leadership style accordingly to support continued growth and success. 
3. Contingency theory advocates for a leadership style that empowers employees and encourages participation in decision-making processes. In small businesses, where employees often play multiple roles and have a direct impact on organizational performance, empowering them can lead to increased motivation, creativity, and productivity. Do refer to terminologies such as job enrichment and job enlargement and their best practices.