Case Study 6.3 – Contingency Theory (Northouse, 2013, pp 132)
Case Study: A family owned pharmaceutical company, Universal Drugs, was looking to change to a more team-work oriented management environment by promoting one of two internal employees. The newly created position gave the new manager freedom to conduct performance reviews and report directly to the owners.
Martha Lee has been with Universal for 15 years and has been voted by her peers “most outstanding manager” on three different occasions. She is friendly, honest, and extremely conscientious about reaching short-term and long-term goals. When given the LPC scale by the personnel department, Martha received a score of 52.
Bill Washington came to Universal 5 years ago with an advanced degree in organizational development. He is director of training, where all of his subordinates say e is the most caring manager they have ever had. While at Universal, Bill has built a reputation for being a real people person. Reflecting his reputation is his score on the LPS scale, an 89.
Theory application:
Using the LPC scoring I’d choose Bill as the new manager. Since those with low LPC are task motivated and with the company moving to a more teamwork based model, whereas Bill would be a better fit with his high LPC scoring since its more relationship focused. It is also important to note that since the LPC is a personality trait test, the scores remain constant (Northouse, 2013, pp 134)
The owners can use the contingency theory to define the new role to qualify one of the applicants more than the other. They would define the task structure aspects of the job; completing performance reviews. The importance of relationship building through training and coaching of the employees and the ability to diffuse difficult situations is important.
Universal Drugs can benefit from the contingency theory in the decision making by understanding that the theory does have flaws. Those who employ this theory do not learn to change their approach to match the situation; they change the situation to match their leadership style (pp 129).
Reference
Northouse, P.G. (2013). Leadership: Theory and Practice. Los Angeles: Sage Publications.