Leadership Theories: Contingency Theories

2.6.4 Contingency Theories

Contingency theories of leadership assume that there is no one best style of leadership and that the most effective style of leadership depends on specific conditions or situations faced.

For example, Fiedler's LPC (least preferred co-worker) contingency theory suggests that both the leaders characteristics and situational factors are crucial. Task oriented leaders (termed high- LPC leaders) are more effective than people -oriented leaders (termed low-LPC leaders) under conditions in which the leader has either high or low controls over the group in question.

In Contrast People- Oriented leaders are more effective under conditions where the leader has moderate control.

As per this theory to some extent, they all looked at the relationship between leader and follower as a transaction. The leader needs to recognize what followers want from their work and if performance warrants it, provide it. There is an exchange of a promise of future rewards for appropriate levels of effort, a quid pro quo or give and take between leader and follower. Various conditions cause some rewards to work and others to fail. The wise leader learned to match the proper rewards with the proper situation or contingency. The leader responds to followers' self-interests as long as they are getting the job done.

Assumptions

• The leader's ability to lead is contingent upon various situational factors, including the leader's preferred style, the capabilities and behaviors of followers and also various other situational factors.

Fiedler Contingency model

This model proposes that effective leadership performance depends on the match between the leader's style and the degree to which the situation gives control to the leader. The leader's style is identifying using the least preferred co-worker questionnaire. The situation is based on the factors like leader member relations, task structure and the position power of the leader. The leader's style, once identified is fixed and the model than goes on to match leaders and the situations.

Assumptions

• Leaders prioritize between task-focus and people-focus.
• Relationships, power and task structure are the three key factors that drive effective styles.

Cognitive Resource Theory

Cognitive Resource Theory predicts that:
1. A leader's cognitive ability contributes to the performance of the team only when the leader's approach is directive. When leaders are better at planning and decision-making, in order for their plans and decisions to be implemented, they need to tell people what to do, rather than hope they agree with them.

When they are not better than people in the team, then a non-directive approach is more appropriate, for example where they facilitate an open discussion where the ideas of team can be aired and the best approach identified and implemented.

2. Stress affects the relationship between intelligence and decision quality.
When there is low stress, then intelligence is fully functional and makes an optimal contribution. However, during high stress, a natural intelligence not only makes no difference, but it may also have a negative effect. One reason for this may be that an intelligent person seeks rational solutions, which may not be available (and may be one of the causes of stress). In such situations, a leader who is inexperienced in 'gut feel' decisions is forced to rely on this unfamiliar approach. Another possibility is that the leader retreats within him/herself, to think hard about the problem, leaving the group to their own devices.

3. Experience is positively related to decision quality under high stress.
When there is a high stress situation and intelligence is impaired, experience of the same or similar situations enables the leader to react in appropriate ways without having to think carefully about the situation. Experience of decision-making under stress also will contribute to a better decision than trying to muddle through with brain-power alone.

4. For simple tasks, leader intelligence and experience is irrelevant.
When subordinates are given tasks which do not need direction or support, then it does not matter how good the leader is at making decisions, because they are easy to make, even for subordinates, and hence do not need any further support.

Assumptions

• Intelligence and experience and other cognitive resources are factors in leadership success.
• Cognitive capabilities, although significant are not enough to predict leadership success.
• Stress impacts the ability to make decisions.

Strategic Contingencies Theory

Intraorganizational power depends on three factors: problem skills, actor centrality and uniqueness of skill.

If you have the skills and expertise to resolve important problems, then you are going to be in demand. And by the law of supply and demand, that gives your the upper hand in negotiations. It also gives you power from the reciprocity created.

If you work in a central part of the workflow of the organization, then what you do is very important. This gives you many opportunities to be noticed. It also means you are on the critical path, such that if your part of the company fails, the whole show stops. Again creating attention and giving you bargaining power.

Finally, if you are difficult to replace, then if you do make enemies up the hierarchy, then they cannot just move you out or sideways.

Example
A production manager in an organization is in charge of a key manufacturing operation (centrality), and understands its complexities very well (uniqueness). From a long experience, when things go wrong, he is very good at fixing things, both mechanically and with the unions.