Contingency theory

Contingency theory is a class of behavioral theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation. Several contingency approaches were developed concurrently in the late 1960s. They suggested that previous theories such as Weber's bureaucracy and Taylor's scientific management had failed because they neglected that management style and organizational structure were influenced by various aspects of the environment: the contingency factors. There could not be "one best way" for leadership or organization. Historically, contingency theory has sought to formulate broad generalizations about the formal structures that are typically associated with or best fit the use of different technologies. The perspective originated with the work of Joan Woodward (1958), who argued that technologies directly determine differences in such organizational attributes as span of control, centralization of authority, and the formalization of rules and procedures. Gareth Morgan in his book Images of Organization describes the main ideas underlying contingency in a nutshell:

Organizations are open systems that need careful management to satisfy and balance internal needs and to adapt to environmental circumstances There is no one best way of organizing. The appropriate form depends on the kind of task or environment one is dealing with. Management must be concerned, above all else, with achieving alignments and good fits Different types or species of organizations are needed in different types of environments

Fred Fiedler's contingency model focused on individual leadership. William Richard Scott describes contingency theory in the following manner: "The best way to organize depends on the nature of the environment to which the organization must relate". The work of other researchers including Paul Lawrence, Jay Lorsch, and James D. Thompson complements this statement. They are more interested in the impact of contingency factors on organizational structure. Theirstructural contingency theory was the dominant paradigm of organizational structural theories for most of the 1970s. A major empirical test was furnished by Johannes M Pennings who examined the interaction between environmental uncertainty, organization structure and various aspects of performance.

Fiedler contingency model From Wikipedia, the free encyclopedia The Fiedler contingency model is a leadership theory of industrial and organizational psychology developed by Fred Fiedler (born 1922), one of the leading scientists who helped his field move from the research of traits and personal characteristics of leaders to leadership styles and behaviours. Two factors The first management style, Taylorists, assumed there was one best style of leadership. Fiedlers contingency model postulates that the leaders effectiveness is based on situational contingency which is a result of interaction of two factors: leadership style and situational favourableness (later called situational control). More than 400 studies have since investigated this relationship. Least preferred co-worker (LPC) The leadership style of the leader, thus, fixed and measured by what he calls the least preferred co-worker (LPC) scale, an instrument for measuring an individuals leadership orientation. The LPC scale asks a leader to think of all the people with whom they have ever worked and then describe the person with whom they have worked least well, using a series of bipolar scales of 1 to 8, such as the following: Unfriendly 1 2 3 4 5 6 7 8 Friendly Uncooperative 1 2 3 4 5 6 7 8 Cooperative Hostile 1 2 3 4 5 6 7 8 Supportive .... 1 2 3 4 5 6 7 8 .... Guarded 1 2 3 4 5 6 7 8 Open The responses to these scales (usually 18-25 in total) are summed and averaged: a high LPC score suggests that the leader has a humanrelations orientation, while a low LPC score indicates a task orientation. Fiedler assumes that everybody's least preferred coworker in fact is on average about equally unpleasant. But people who are indeed relationship motivated, tend to describe their least preferred coworkers in a more positive manner, e.g.,

more pleasant and more efficient. Therefore, they receive higher LPC scores. People who are task motivated, on the other hand, tend to rate their least preferred coworkers in a more negative manner. Therefore, they receive lower LPC scores. So, the Least Preferred Coworker (LPC) scale is actually not about the least preferred worker at all, instead, it is about the person who takes the test; it is about that person's motivation type. This is so, because, individuals who rate their least preferred coworker in relatively favorable light on these scales derive satisfaction out of interpersonal relationship, and those who rate the coworker in a relatively unfavorable light get satisfaction out of successful task performance. This method reveals an individual's emotional reaction to people they cannot work with. Critics point out that this is not always an accurate measurement of leadership effectiveness. Situational favourableness According to Fiedler, there is no ideal leader. Both low-LPC (task-oriented) and high-LPC (relationship-oriented) leaders can be effective if their leadership orientation fits the situation. The contingency theory allows for predicting the characteristics of the appropriate situations for effectiveness. Three situational components determine the favourableness of situational control: 1. Leader-Member Relations, referring to the degree of mutual trust, respect and confidence between the leader and the subordinates. 2. Task Structure, referring to the extent to which group tasks are clear and structured. 3. Leader Position Power, referring to the power inherent in the leader's position itself. When there is a good leader-member relation, a highly structured task, and high leader position power, the situation is considered a "favorable situation." Fiedler found that lowLPC leaders are more effective in extremely favourable or unfavourable situations, whereas high-LPC leaders perform best in situations with intermediate favourability Cognitive Resource Theory

The Cognitive Resource theory is a leadership theory of industrial and organizational psychology developed by Fred Fiedler and Joe Garciain 1987 as a reconceptualization of the Fiedler contingency model. The theory focuses on the influence of the leader's intelligence andexperience on his or her reaction to stress. 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. Description 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. The Hersey-Blanchard Situational Leadership Theory Choosing the Right Leadership Style for the Right People You've just finished training the newest member of your team. Now that he's ready to start working, you give him the data that you need him to enter into the company's database, and then you hurry off to a meeting. When you return later that afternoon, you're disappointed to find that he hasn't done anything. He didn't know what to do, and he didn't have the confidence to ask for help. As a result, hours have been lost, and now you have to rush to enter the data on time. Although you may want to blame the worker, the truth is that you're as much to blame as he is. How can you avoid situations like this? Management experts Paul Hersey and Ken Blanchard argue that these things happen because leaders don't match their style of leadership to the maturity of the person or group they're leading. When style and maturity aren't matched, failure is the result. In this article, we'll review the Hersey-Blanchard Situational Leadership Theory, and we'll explain how it's used in different leadership situations. Hersey-Blanchard Situational Leadership Theory The Hersey-Blanchard Situational Leadership Theory was created by Dr Paul Hersey, a professor and author of "The Situational Leader," and Ken Blanchard, author of the best selling "The One-Minute Manager," among others. The theory states that instead of using just one style, successful leaders should change their leadership styles based on the maturity of the people they're leading and the details of the task. Using this theory, leaders should be able to place more or less emphasis on the task, and more or less emphasis on the relationships with the people they're leading, depending on what's needed to get the job done successfully. Leadership Styles According to Hersey and Blanchard, there are four main leadership styles: Telling (S1) Leaders tell their people exactly what to do, and how to do it. Selling (S2) Leaders still provide information and direction, but there's more communication with followers. Leaders "sell" their message to get the team on board. Participating (S3) Leaders focus more on the relationship and less on direction. The leader works with the team, and shares decision-making responsibilities. Delegating (S4) Leaders pass most of the responsibility onto the follower or group. The leaders still monitor progress, but they're less involved in decisions. As you can see, styles S1 and S2 are focused on getting the task done. Styles S3 and S4 are more concerned with developing team members' abilities to work independently. Maturity Levels According to Hersey and Blanchard, knowing when to use each style is largely dependent on the maturity of the person or group you're leading. They break maturity down into four different levels:

M1 People at this level of maturity are at the bottom level of the scale. They lack the knowledge, skills, or confidence to work on their own, and they often need to be pushed to take the task on. M2 at this level, followers might be willing to work on the task, but they still don't have the skills to do it successfully. M3 Here, followers are ready and willing to help with the task. They have more skills than the M2 group, but they're still not confident in their abilities. M4 These followers are able to work on their own. They have high confidence and strong skills, and they're committed to the task. The Hersey-Blanchard model maps each leadership style to each maturity level, as shown below. Maturity Level Most Appropriate Leadership Style M1: Low maturity S1: Telling/directing M2: Medium maturity, limited S2: Selling/coaching skills M3: Medium maturity, higher S3: Participating/supporting skills but lacking confidence M4: High maturity S4: Delegating To use this model, reflect on the maturity of individuals within your team. The table above then shows which leadership style Hersey and Blanchard consider the most effective for people with that level of maturity. Leadership Style Examples 1. You're about to leave for an extended holiday, and your tasks will be handled by an experienced colleague. He's very familiar with your responsibilities, and he's excited to do the job. 2. Instead of trusting his knowledge and skills to do the work, you spend hours creating a detailed list of tasks for which he'll be responsible, and instructions on how to do them. 3. The result? Your work gets done, but you've damaged the relationship with your colleague by your lack of trust. He was an M4 in maturity, and yet you used an S1 leadership style instead of an S4, which would have been more appropriate. 2. You've just been put in charge of leading a new team. It's your first time working with these people. As far as you can tell, they have some of the necessary skills to reach the department's goals, but not all of them. The good news is that they're excited and willing to do the work. 3. You estimate they're at an M3 maturity level, so you use the matching S3 leadership style. You coach them through the project's goals, pushing and teaching where necessary, but largely leaving them to make their own decisions. As a result, their relationship with you is strengthened, and the team's efforts are a success.

Pathgoal theory From Wikipedia, the free encyclopedia

The path-goal theory, also known as the path-goal theory of leader effectiveness or the path-goal model, is a leadership theory in the field of organizational studies developed by Robert House, an Ohio State University graduate, in 1971 and revised in 1996. The theory states that a leader's behavior is contingent to the satisfaction, motivation and performance of his subordinates. The revised version also argues that the leader engages in behaviors that complement subordinate's abilities and compensate for deficiencies. The path-goal model can be classified both as a contingency or as a transactional leadership theory.

[edit]Original theory According to the original theory, the managers job is viewed as guiding workers to choose the best paths to reach their goals, as well as the organizational goals. The theory argues that leaders will have to engage in different types of leadership behavior depending on the nature and the demands of a particular situation. It is the leaders job to assist followers in attaining goals and to provide the direction and support needed to ensure that their goals are compatible with the organizations goals.[4] A leaders behavior is acceptable to subordinates when viewed as a source of satisfaction, and motivational when need satisfaction is contingent on performance, and the leader facilitates, coaches, and rewards effective performance. The original path-goal theory identifiesachievement-oriented, directive, participative, and supportive leader behaviors:

The directive path-goal clarifying leader behavior refers to situations where the leader lets followers know what is expected of them and tells them how to perform their tasks. The theory argues that this behavior has the most positive effect when the subordinates' role and task demands are ambiguous and intrinsically satisfying.[5]

The achievement-oriented leader behavior refers to situations where the leader sets challenging goals for followers, expects them to perform at their highest level, and shows confidence in their ability to meet this expectation.[5] Occupations in which the achievement motive were most predominant were technical jobs, sales persons, scientists, engineers, and entrepreneurs.[2]

The participative leader behavior involves leaders consulting with followers and asking for their suggestions before making a decision. This behavior is predominant when subordinates are highly personally involved in their work.[2]

The supportive leader behavior is directed towards the satisfaction of subordinates needs and preferences. The leader shows concern for the followers psychological well being.[5] This behavior is especially needed in situations in which tasks or relationships are psychologically or physically distressing.[2]

Path-goal theory assumes that leaders are flexible and that they can change their style, as situations require. The theory proposes two contingency variables, such as environment and follower characteristics, that moderate the leader behavior-outcome relationship. Environment is outside the control of the follower-task structure, authority system, and work group. Environmental factors determine the type of leader behavior required if the follower outcomes are to be maximized. Follower characteristics are the locus of control, experience, and perceived ability. Personal characteristics of subordinates determine how the environment and leader are interpreted. Effective leaders clarify the path to help their followers achieve goals and make the journey easier by reducing roadblocks and pitfalls. [1] [6] Research demonstrates that employee performance and satisfaction are positively influenced when the leader compensates for the shortcomings in either the employee or the work setting. In contrast to the Fiedler contingency model, the path-goal model states that the four leadership styles are fluid, and that leaders can adopt any of the four depending on what the situation demands. Leadership style in asia The "New Asian Leader"? There are three prototypes: 1) Li Ka-shing of Hutchison Whampoa-Cheung Kong: old Chinese leadership in transition like Li Ka-shing. Rags-to-riches in one generation; handing over his business empire to his two sons who are Western-trained. There are many such examples in Asia. Li Ka-shing is in different areas of businesstelecommunications, security, and high-end ITand is very interested in becoming a contractor in the emerging homeland security construct in America. With Li Ka-shing, the threat to success is his reliance on an international concern to be a significant contractor in the establishment of the U.S. homeland security hierarchy. Li's personal story is an amazing tale of success. After the death of his father, Liat age twelvewent to work in a plastics factory. Within a decade he started his own plastics company, which he later leveraged into a real estate and investment concern. It then was an early entrant into China's telecom and IT wave of the early 1990s, and became a market leader. Li is a man who seeks to establish a positive legacy. He created a foundation in 1980 to help young Chinese students have the educational and other opportunities he had to

make for himself at age twelve. He also started his own university, Shantou University, in 1981, with a similar purpose. 2) William and Victor Fung of Li & Fung: old traditional Chinese family-owned companies now run by the third generation of the family, Western- and highlyeducated, who use Western technology extensively to face globalization and succeed. Very much Western-centric in approach yet Asian in practice, the Fungs of Li & Fung have mastered techniques of getting maximum efficiency out of the supply chain, taking raw materials and making low-cost, high-demand consumer goods, particularly clothing, much more cheaply than in the United States. What the Fungs have accomplished is similar to what Japanese automakers accomplished a generation ago. By strictly adhering to principles of quality control principles that were espoused by American business consultant Edward Deming Nissan and Toyota made cheaper, better cars than the Americans did, eventually causing the big three U.S. automakers to follow suit. William and Victor Fung are interested in being business consultants, teaching others how to do what they've done. Both men are Harvard-educated and have a desire to be open and forthcoming about their business model. As Asian companies seekaccess to world capital markets, they will move toward professional managers who will employ leadership styles more akin to those now used in the United States. The main threats with Li & Fung are these: driving down labor costs, and concerns about relying on suppliers who potentially abuse the human rights of workers or pay less than a standard living wage. Victor and William Fung are the new type of Asian leaderswill they soon be the only type? 3) New Economy business leaders. Information technology and the Internet are bringing out a high-tech type of leadership that is common in America's high-tech sector. Entrepreneurial, innovative, hard-driving, very flexible, ambitious, optimistic, visionary in the technology and business aspects, they will play a good, but not dominant role. N. R. Narayana Murthy of India's Infosys and Stan Shih of Acer are good examples. They have adopted an almost entirely Western style of leadership and are succeeding in Asia.