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
There is no universal way or one best way to manage an organization.
The design of an organization and its subsystems must 'fit' with the
environment.
Effective organizations not only have a proper 'fit' with the environment,
but also between its subsystems.
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.
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.
Forum discussions about Contingency Theory. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.
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...
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...
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...
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?...
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....
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....
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...
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...
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?...
The best, top-rated topics about Contingency Theory. Here you will find the most valuable ideas and practical suggestions.
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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......
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 ...
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...
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...
Preferred Leadership Styles Effective leaders seek a match between their preferred style and the situation and, if necessary, change the situation t...
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...
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
Various sources of information regarding Contingency Theory. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.
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...
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...
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....
Understanding the Usefulness of Leadership Theories A leadership theory takes some leadership related inputs and describes how they reflect some leadership related outcomes...
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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