Contingency Theory

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The optimal organization / leadership / decision-making style is dependent (contingent) upon various internal and external constraints (factors). Explanation of Contingency Theory.

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  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print

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. An organizational / leadership / decision making style that is effective in some situations, may be not successful in other situations. In other words: The optimal organization / leadership / decision-making style depends upon various internal and external constraints (factors).


Contingency Theory factors

Some examples of such constraints (factors) include:

  • The size of the organization.
  • How the firm adapts itself to its environment.
  • Differences among resources and operations activities.
  • Assumptions of managers about employees.
  • Strategies.
  • Technologies being used.
  • etc.

1. Contingency Theory on the organization

  1. There is no universal way or one best way to manage an organization.
  2. The design of an organization and its subsystems must 'fit' with the environment.
  3. Effective organizations not only have a proper 'fit' with the environment, but also between its subsystems.
  4. The needs of an organization are better satisfied when it is properly designed and the management style is appropriate both to the tasks undertaken and the nature of the work group.

2. Contingency Theory of leadership

In the Contingency Theory of leadership, the success of the leader is a function of various factors in the form of subordinate, task, and/or group variables. The effectiveness of a given pattern of leader behavior is contingent upon the demands imposed by the situation. These theories stress using different styles of leadership appropriate to the needs created by different organizational situations. Some of these theories are:

  • Contingency Theory (Fiedler): Fiedler's theory is the earliest and most extensively researched. Fiedler's approach departs from trait and behavioral models by asserting that group performance is contingent on the leader's psychological orientation and on three contextual variables: group atmosphere, task structure, and leader's power position. This theory explains that group performance is a result of interaction of two factors. These factors are known as leadership style and situational favorableness. In Fiedler's model, leadership effectiveness is the result of interaction between the style of the leader and the characteristics of the environment in which the leader works.
  • Situational Theory (Hersey & Blanchard). This theory is an extension of Blake and Mouton's Managerial Grid Model, and Reddin's 3-D management style theory. This model expanded the notion of relationship and task dimensions to leadership, and a readiness dimension was added.
  • Leadership Pipeline (Drotter)

3. Contingency Theory of decision-making

Vroom and Yetton's Decision Participation Contingency Theory or the Normative Decision Theory: According to this model, the effectiveness of a decision procedure depends upon a number of aspects of the situation:

  • The importance of the decision quality and acceptance.
  • The amount of relevant information possessed by the leader and subordinates.
  • The likelihood that subordinates will accept an autocratic decision, or the likelihood that subordinates will cooperate to make a good decision if they may participate.
  • The amount of disagreement among subordinates with respect to their alternatives.

Contingency Theory and Situational theory

Contingency Theory is similar to situational theory in that there is an assumption of no simple way that is always right. The main difference is that situational theory focuses more on the behaviors which the leader should use. Given situational factors (often about follower behavior). Whereas Contingency Theory takes a broader view, which includes contingent factors about leader capability, but also includes other variables within the situation.


Contingency Theory Forum
  How to Apply / Implement Contingency Theories in a Context
I would like to know how can I apply contingency t...
     
 
  Contingency Theory versus Situational Theory
I'm finding it really interesting how confusing an...
     
 
  Effects of Contigency Variables
In what ways may the variables in the contingency ...
     
 
  History of Contingency Theory
I would like to know more about the origin and the...
     
 
  Contingency Theory in 2 Countries
I am writing on how contingency theory may be appl...
     
 
  Contingency Theory Strengths
What are the strengths of contingency theory when ...
     
 
  Why Fiedler's Contingency Theory?
Justify why you would recommend Fiedler's Continge...
     
 
  Major Weeknesses of Contigency Leadership Approach
What are the weaknesses of the Contigency Leadersh...
     
 
  Contingencies Affecting Management Development
I would like to know the challenges of the environ...
     
 
  Individual Unit of Analysis
Hi, is there any conceptual framework of contingen...
     
 
  Mission and Objectives > Leadership
I would say the leadership styles / theories would...
     
 
  Discuss Contingency Theory
The contingency theory accepts that no one leaders...
     
 
  Donaldson's Neocontingency Model
In his 1995 book "American anti-management theorie...
     
 
  Right Way In Information Age
It was easy to develop a theory in the last centur...
     
 

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Best Practices - Contingency Theory Premium
  The Cynefin Framework
A recent application of contingency thinking on de...
     
 

Expert Tips - Contingency Theory Premium
 

Cognitive Resource Theory

Fiedler more recently proposed a cognitive reso...
Usage (application): When and How the Leader's Intelligence and Experience Influence Group Performance
 
 
 

Least-Preferred Co-worker (LPC) Contingency Theory

Effective leaders seek a match between their prefe...
Usage (application): Preferred Leadership Styles
 
 
 

How to Develop your Own Leadership Philosophy

In an article “When should a leader be directive o...
Usage (application): Leadership/Management Development, Coaching, Mentoring
 
 
 

Quotes on Contingency

Circumstances? I make circumstances!
Napoleon...
Usage (application): Nature of contingency
 
 
 

How to Use Counterintuition to Fight 5 Frequent Decision Making Errors

Mauboussin describes five mistakes in decision mak...
Usage (application): Strategic Decision Making, Dealing with Complexity, Dealing with Uncertainty, Strategy
 
 

Resources - Contingency Theory Premium

Contingency Leadership Theories In-depth

This presentation covers the subject of contingenc...
Usage (application): Contingency Theory, Normative Decision Model, Situational Leadership Theory, Path-Goal Theory
 

4 Decision-making Contexts: The Cynefin Framework

Dave Snowden explains the Cynefin Framework, which...
Usage (application): Decision Making, Situations, Context, Types, Complex Circumstances, Chaos, Crisis Management
 

How to Become a Master Manager?

This good introduction presentation is about how t...
Usage (application): Introduction to Managing People. Know Thyself
 

When does Leadership Matter

Noam Waaserman, Nitin Nohria and Bharat N. Anand p...
Usage (application): CEO Contingency
 

Mintzberg: 7 Myths on Management

In this interesting interview Prof. Henry Mintzber...
Usage (application): Management Development, Leadership Development, Managers versus Leaders, MBA
 

Situational Leadership versus Contingency Theory

Dr. A. Adams sharply contrasts situational leaders...
Usage (application): Situational Leadership, Contingency Theory, Trainings, Workshops
 

10 Leadership Theories in a Nutshell

This 5-minute video gives a brief overview of 10 t...
Usage (application): Leadership Theories Overview, Leadership Development, Management Development, Leadership Styles, Coaching, Mentoring
 
 

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Compare with Contingency Theory:  Situational Leadership  |  Leadership Styles  |  Leadership Pipeline  |  Ten Schools of Thought  |  Mechanistic and Organic Systems  |  Six Change Approaches  |  Core Group Theory  |  Groupthink  |  Levels of Culture  |  Culture Types  |  Changing Organization Cultures  |  Leadership Continuum  |  Cultural Intelligence  |  Scenario Planning  |  Results-Based Leadership  |  Moral Purpose  |  EPIC ADVISERS


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