Contingency Theory

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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.

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Contingency Theory Special Interest Group.

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Forum discussions about Contingency Theory. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.

topic The Cynefin Framework
A recent application of contingency thinking on decision-making is the Cynefin framework described by David J. Snowden and Mary E. Boone in the HBR of Nov 2007. They distinguish between 5 decision-mak...
Comments3 comments
topic Why Fiedler's Contingency Theory?
Justify why you would recommend Fiedler's Contingency Theory to any organisation......
🔥 Type 1 and Type 2 Decisions (Jeff Bezos)
We are used to approach decision making from many different angles… strategic to operational, personal to professional, long-term to short-term and so forth. Back in 2015, Amazon's CEO Jeff Bezos shar...
Comments14 comments
topic The Stacey Matrix
The Matrix developed by Ralph Douglas Stacey is a typical contingency approach to decision-making. Stacey's matrix is a useful addition to the Cynefin Framework for choosing the best decision-making a...
Comments3 comments
topic Contingency Theory in 2 Countries
I am writing on how contingency theory may be applied to leaders who share one culture, but reside in two different countires. Any thoughts?...
topic History of Contingency Theory
I would like to know more about the origin and the development of contingency theory. Who can share an overview? Thanks....
topic Contingencies Affecting Management Development
I would like to know the challenges of the environment that can affect management development. Are there any thought of schools on it....
topic Donaldson's Neocontingency Model
In his 1995 book "American anti-management theories of organization: A critique of paradigm proliferation", L. Donaldson developed his "Neocontingency Model". Donaldson argues that when a fit exists b...
Comments1 comments
topic Mission and Objectives > Leadership
I would say the leadership styles / theories would be dependent on a company's level of understanding of its mission and objectives. A clear leadership theory/style would, I believe, be developed thr...
topic Individual Unit of Analysis
Hi, is there any conceptual framework of contingency theory for individual unit of analysis? Thank you....
Comments1 comments
topic How to Apply / Implement Contingency Theories in a Context
I would like to know how can I apply contingency theory in an organisational context? And using this theories, how can I identify management and leadership requirement in a given situation?...
Comments3 comments

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Best Practices

The best, top-rated topics about Contingency Theory. Here you will find the most valuable ideas and practical suggestions.

🥇 Discuss Contingency Theory
The contingency theory accepts that no one leadership style can be effective in all situations and thus the style used will be directed by a number of factors. Please discuss......
Comments3 comments

🥈 Effects of Contigency Variables
In what ways may the variables in the contingency approach affect management approaches in organisations?...
Comments2 comments

🥉 Right Way In Information Age
It was easy to develop a theory in the last century and to ensure that it is valid in a particular environment. However, as information started flooding this world in the digital era, the validity of ...
Comments2 comments

topic Major Weeknesses of Contigency Leadership Approach
What are the weaknesses of the Contigency Leadership Approach?...
topic Contingency Theory Strengths
What are the strengths of contingency theory when applied to a company's organization?...
Comments1 comments

topic What is the Difference between the Contingency Theory versus the Situational Theory of Leadership?
I'm finding it really interesting how confusing and cross defined this subject is. I think that situational and contingency could almost be band under the same group; to be honest they are very simil...
Comments5 comments

Expert Tips

Advanced insights about Contingency Theory. Here you will find professional advices by experts.


Cognitive Resource Theory

When and How the Leader's Intelligence and Experience Influence Group Performance
Fiedler more recently proposed a cognitive resource theory that suggested that leader intelligence and experience can in...

Mintzberg: 7 Myths on Management

Management Development, Leadership Development, Managers versus Leaders, MBA
Prof. Henry Mintzberg refutes 7 myths on leadership and management: ORCHESTRA CONDUCTOR: One myth about management is t...

Least-Preferred Co-worker (LPC) Contingency Theory

Preferred Leadership Styles
Effective leaders seek a match between their preferred style and the situation and, if necessary, change the situation t...

How to Develop your Own Leadership Philosophy

Leadership/Management Development, Coaching, Mentoring
In an article “When should a leader be directive or empowering? How to develop your own situational theory of leadership...

Quotes on Contingency

Nature of contingency
Circumstances? I make circumstances! Napoleon Bonaparte 1769-1821, French Emperor Know nature and know the situation...

How to Use Counterintuition to Fight 5 Frequent Decision Making Errors

Strategic Decision Making, Dealing with Complexity, Dealing with Uncertainty, Strategy
Mauboussin describes five mistakes in decision making that are often made and result in making the wrong decisions. Thes...
Information Sources

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Contingency Leadership Theories In-depth

Contingency Theory, Normative Decision Model, Situational Leadership Theory, Path-Goal Theory
This presentation covers the subject of contingency theory of leadership and situational leadership. The presentation in...

4 Decision-making Contexts: The Cynefin Framework

Decision Making, Situations, Context, Types, Complex Circumstances, Chaos, Crisis Management
Dave Snowden explains the Cynefin Framework, which shows that different circumstances require different ways of decision...

How to Become a Master Manager?

Introduction to Managing People. Know Thyself
This good introduction presentation is about how to be a Master Manager. By J. S. Osland, D. A. Kolb, I. M. Rubin and M....

When does Leadership Matter

CEO Contingency
Noam Waaserman, Nitin Nohria and Bharat N. Anand propose a framework - the "contingent opportunities view" - that resolv...

Which Leadership Theory is the Best One?

Understanding the Usefulness of Leadership Theories
A leadership theory takes some leadership related inputs and describes how they reflect some leadership related outcomes...

Situational Leadership versus Contingency Theory

Situational Leadership, Contingency Theory, Trainings, Workshops
Dr. A. Adams sharply contrasts situational leadership theory with contingency theory: - Situation Leadership Theory: Le...

10 Leadership Theories in a Nutshell

Leadership Theories Overview, Leadership Development, Management Development, Leadership Styles, Coaching, Mentoring
This 5-minute video gives a brief overview of 10 theories of leadership, explaining their main differences: 1. The Grea...

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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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