CONTINGENCY AND SITUATIONAL LEADERSHIP

The essence of a contingency approach of leadership is that leaders are most effective when they make their decisions based on situational factors including characteristics of group members.

Results of a research comparing leaders from a sample of 35 fortune 500 companies and those from 35 Inc. companies.

o Inc. CEO significantly exceeded F500 CEOs in developing and implementing technical ideas.

o The large-company CEOs had a significantly better developed sub-set of inter-personal skills.

Fiedler’s Contingency Theory of Leadership Effectivenesso The best style of leadership is determined by the situation in which the leader is

working in.o The least preferred employee Scale (LPC)

Leadership can be relationship oriented or task oriented. Relatively permanent aspect and mgrs. Should work in situations theat suit

their style. LPC scale helps determining a mgr’s leadership style by seeing how they

describe employees they would like to work with the least. Situations can be of high, moderate and low control. 3 dimension for control classification:-

Leader-member relations Task structure Position power

A leader will have the best control if he enjoys a good leader-member relationship equation.

Findings state that task oriented leaders perform well in both low and high control situations while relationship oriented leaders do well in situations of moderate control.

A situation can be made more condusive to best match one’s leadership style. For eg. To increase control:-

Task structure: being more specific about one expectations, providing deadlines, showing examples of acceptable work and providing written instructions.

Leader member relations: Display interest Position Power: request more formal authority

o Evaluation A major problem lies in matching the situation to the leader. If a relationship oriented leader finds himself in a situation becoming too

favourable to exercise control, it is doubtful he or she can be transferred to a less favourable position.

Path-Goal Theory of Leadership effectiveness by Robert Houseo Based on the expectancy theory of motivation.o A manager should choose his leadership style depending on the characteristics of his

subordinates and the demands of the tasko The type of subordinates is determined by how much control they think they have

on the environment and how well they think they can do the assigned task.o Environmental contingency factors:-

The tasks of the group members The work groups The authority system within the organisation

o Leadership styles

Participative Consultative Improving morale of well-motivated employees who have non-repetitive tasks

Achievement oriented Challenging goals, pushing for improvement

Ambiguous and non-repetitive tasks

Directive Planning, organising, controlling

Unclear tasks or when direction improves morale

Supportive Concern, emotionally supportive

Dissatisfying, stressful or frustrating tasks

The styles can very well be used in combination. How the leader improves performance

o Recognise or activate group members needso Provide personal pay-offs subject to good performanceo Specify the clear path to personal pay-offs

Clarify expectations and hoe efforts will lead to performance and performance to rewards

o Increase opportunities for personal satisfaction subject to effective performance.o Reduce frustrating barriers in the path of achieving goalso Do not irritate employees by instructing them on something they already know wello Make clear the desired ability of goals to the group members.

The Hershey-Blanchard Situational Leadership Modelo It bases leadership style primarily on characteristics of group memberso The word model is used as unlike other theories it does not state why things happen

as generally a theory does, but instead suggests some procedures that can be repeated.

o Task behaviour are the extent to which leader spells out duties and responsibilities.o Relationship behaviour is the extent of engaging in two way or multi way

communication.

Diagrammatic Representation:

Readiness in situational leadership is the extent to which a group has the ability or willingness or confidence to accomplish a specific task. It is therefore, more task oriented than a trait or characteristic.

As the group readiness increases, a leader should focus more on a relationship behaviour.

Evaluationo Corroborates common sense and therefore appealing.o Model represents categories and guidelines so precisely that it reflects infallibility.o In reality, leadership decisions are not as clear cut as the quadrant system suggests.

o Research findings have been mixed. There are very few cases in which high tsk high relationship orientation does not produce results.

Contingency Leadership in the Executive Suite

Strategic approach

systematic, dispassionate and structured approach to strengths and weaknesses

suitable in an unstable environment where the volume and pace of change are

high or CEOs need to frequently make decisions of enormous consequence

Creating, testing and designing long term business strategy

80% CEOs time in external factors such as customers, competitors, technological advances and market trends

Human assets

approach

The CEO and the corporate staff add value to the company by hiring, retaining and developing employees

useful in cases where a comoany has far flung operations and the business managers are better equipped to formulate strategy than tose in the corporate group

Useful in situations where business unit managers are to be developed to such an extent that they can make decisions the way a CEO would

contingency factor favouring this approach is when CEOs feel strongly that the company's values and standards are essential for the success of the organisation

Expertise Approach

add value by selecting, disseminating and continually updating an area of expertise which will give the company a competitive edge

contingency factor is if possessing certain expertise can give the firm a distinct

competitive advantage Employees with good technical expertise who share it across organisational units are rewarded

Box Approach

Creates value by creating, communicating and overseeing an explicit set of controls like rules, financial measures, procedures etc.

done to ensure uniform and predictable experiences for employee and customer

and to lower risks in areas such as banking or nuclear power plants. Rewards employees whose behaviour

and performance match the control standards

Change Agent

Approach

CEOs who insists on a complete process of reinvention if such change entails short term disturbances such as anxiety, confusion or poorer financial results

It arises when the CEO feels that a lack of change will be the company's undoing

such CEOs spend around 75% of their time giving meetings, speeches and urging their employees to accept change

The contingency factor is not something visible but rather the CEOs vision that troubles lie ahead unless the company changes now