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.

Forum Start a new topic about Contingency Theory Write here. Ask a question or explain something. Current forum discussions about Contingency Theory: How to Apply / Implement Contingency Theory to an Organization? 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?... 36   3 comments Effects of Contigency Variables In what ways may the variables in the contingency approach affect management approaches in organisations?... 32   3 comments The Essense of Contingency Theory The contingency theory (theories) accept(s) 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...... 32   4 comments Validity of Theories in the 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 and... 30   2 comments The Limitations/Weaknesses of Contingency Leadership Approach What are the limitations and drawbacks of the Contigency Leadership Approach?... 25   1 comments

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Expert Tips Advanced insights about Contingency Theory. Here you will find professional advices by experts. Consultancy Tips Teaching Tips Practical Implementation Tips 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...

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 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...

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