What is Contingency Theory?

Today, I would like to examine leadership through the Contingency Theory. Contingency Theory is one of several leadership theories that takes the leadership style and situation under consideration (Northouse, 2007). Unlike the situational approach, the Contingency Theory has a pessimistic view about a leader’s ability to change depending on the situation; in other words, it advocates using the right leader for the right situation (Penn State University World Campus [PSU WC], 2016a, L. 6). Contrast this with the Situational Approach, which believes that leaders can and should change their leadership style based on the situation (PSU WC, 2016b, L. 5). I have written a high-level overview of the Situational Approach here. In this short post, I will discuss the Contingency Theory and how it could apply to a real-world corporate setting. I will also compare this theory with the Situational Approach. Finally, I will discuss the strengths and limitations of this theory.

My interest in the Contingency Theory stems from personally experiencing the fixed leadership nature of adult leaders. I specifically call out “adult leaders” because I have seen adolescents change their leadership style through maturation; although I have rarely seen an adult change his or her leadership style. Please note that my anecdotes do not provide evidence for or against a scientific theory. That said, the “Contingency Theory is supported by a lot of empirical research” (PSU WC, 2016a, L. 6, p. 9).

Where does Contingency Theory get its name? Leadership depends (or is contingent) on the situation between the leader and the follower. In this context, the success of the Contingency Theory depends on matching the right leader with the right followers and situations. If you visit the link I mentioned earlier, note that the Situational Approach recommends that leaders should adjust their leadership style depending on the development level of the followers. The development level of the followers depends on their “ability” and “willingness” to do the job. In short, the Situational Approach believes that leadership is a dynamic process and should be adjusted to specific situations. On the other hand, the Contingency Model believes that leadership styles are fixed. This means that if an organization finds itself with a new situation, it might need to recruit a new leader or transfer someone from another department that is more compatible. To succeed using the Situational Approach, one would need to properly identify the development level of their followers and adjust their style accordingly. Contrast this with the Contingency Theory, which says that success in a situation depends on either changing the leader or the situation (PSU WC, 2016a, L. 6). You might have noted another difference between the two theories. To succeed in the Situational Approach, the leader needs to study the followers; to succeed with the Contingency Theory, the leader and/or the situation needs to be studied (PSU WC, 2016a, L. 6).

So how do we study the leader? “Fiedler (1967) developed the least-preferred-coworker scale (LPC) to determine a leader’s general style,” (as cited in PSU WC, 2016a, L. 6, p. 6). Here is a brief overview of Fiedler’s scale: think of a person that you have had the most difficulty working with? Now describe that person in bipolar adjectives, such as “Pleasant/Unpleasant,” “Friendly/Unfriendly,” “Rejecting/Accepting,” and so on (Northouse, 2007, p. 124; PSU WC, 2016a, L. 6). Interestingly enough, the score you get on the LPC score indicates something about you as a leader, not necessarily the person you were describing. High scores on the LPC mean that you are relationship oriented – you derive pleasure by building and maintaining relationships. Low LPC scores mean that you are task oriented – you derive pleasure from accomplishing tasks. As the low-LPC leader accomplishes tasks, they start becoming more relationship focused. It is worth mentioning that middle-LPC scorers indicate a person that can easily switch between tasks and relationships; in other words, they derive satisfaction from both tasks and relationships (PSU WC, 2016a, L. 6).

Before I get into how the model works, I need to briefly reference a concept called situational favorability. In essence, situational favorability refers to how much control a leader has over followers; higher control increases favorability and vice versa. Relationships between the leader/follower, degree of task structure, and positional power are determinants of situational favorability. Strong leader/follower relationships, well-defined tasks, and formal authority are rated as highly favorable, while weak relationships between leader/follower, ambiguous tasks, and lack of formal authority is rated as highly unfavorable situations. Somewhere in between these levels is rated moderately favorable (PSU WC, 2016a, L. 6).

With this background information, we are ready to discuss the model. For the purposes of this blog, I will keep the explanation at a high-level to leave room for discussing a real-world situation. I suggest interested readers refer to Northouse (2007) or PSU WC (2016) for additional details on the theory. First, we measure the leader’s LPC score. Next, we assess situational favorability. If the leader’s style matches the situation, the model predicts leadership success; otherwise, the leader will not be a good fit (PSU WC, 2016a, L. 6). Due to the complexity of this theory, I have included the picture below so you can see which leadership styles fit which situations.

Source: Adapted from A Theory of Leadership Effectiveness, by F. E. Fiedler, 1967, New York: McGraw-Hill (as cited in Northouse, 2007, p. 115).

Moderate situations call for high LPC leaders; unfavorable or very favorable situations call for low LPC leaders. According to PSU WC (2016), it is not apparent why low LPCs (task oriented leaders) do well on both highly favorable/unfavorable situations and why high LPCs (relationship oriented leaders) do well on moderately favorable situations. In fact, this is one of the weaknesses of the Contingency Theory. Another weakness is the lack of face validity on the LPC questionnaire. Finally, Contingency Theory is too difficult to use in real-world settings and fails to provide prescriptive advice if organizations have a mismatch between a leader and a situation. On the other hand, as I mentioned earlier, this theory is backed by strong empirical research. Additionally, the theory has expanded our understanding of leadership situations and provides useful predictions for different leadership situations. The Contingency Theory recognizes that not all leaders are supposed to be good in all situations. Finally, this theory can help organizations develop useful leadership profiles for current/future situations (PSU WC, 2016a, L. 6).

I would like to give a real-world example on how this theory can predict leadership success. You might recall reading about Tom from my previous blog post. Tom likely has a low-LPC score. In fact, Tom strongly values tasks over relationships. Tom has a big title, but little authority in administering rewards or punishments. This has hindered his positional power. He has decent (but not strong) relationships with his staff. Finally, some of the department’s standard operating procedures are well defined and some are under development or undefined. As a result, we can reasonably conclude that the situation is moderately favorable. As mentioned above, moderately favorable situations benefit from a leader high in LPC. This mismatch could explain why Tom has failed to be successful in his leadership role.

In summary, the Contingency Theory is a useful (although not always practical) tool for predicting leadership success within an organization. Opposite to the Situational Approach, the Contingency Theory believes that leadership styles are fixed and promote matching leaders with situations. For this theory to be useful, organizations can administer the LPC scale with their leaders and then attempt to match the right leader with the situation that he or she is most compatible with.

What do you think about this theory? As you might note, it does not address the leader’s traits, intelligence, or skills. Can you think of a situation where this theory can provide value to you or your organization?

References

Northouse, P. G. (2007). Contingency Theory. Leadership: Theory and practice. Thousand Oaks: SAGE. pp. 113-126.

Pennsylvania State University World Campus. (2016a). PSYCH 485 Lesson 6: Contingency and path theories. Retrieved June 4, 2016 from https://courses.worldcampus.psu.edu/su16/psych485/001/content/06_lesson/01_page.html.

Pennsylvania State University World Campus. (2016b). PSYCH 485 Lesson 5: Style and situational approaches. Retrieved June 4, 2016 from https://courses.worldcampus.psu.edu/su16/psych485/001/content/05_lesson/01_page.html.