Contingency Approach

The Basic Idea

“It depends.” It can be pretty frustrating when you’re seeking out an answer and you get the vague, seemingly non-answer of “it depends.” What’s worse is when the other person smiles as if their response was satisfactory!

Is there ever a time when “it depends” is the right answer? According to the contingency approach, yes! The contingency approach to management, also known as the situational approach, holds that there is no single, textbook rule for the best way to manage an organization.1 In each company’s case, the “best” approach will be contingent upon the company’s internal and external needs. Leaders who use the contingency approach are flexible when choosing strategies and adapting to new demands.

The best way to organize depends on the nature of the environment to which the organization must relate.

– Richard Scott, organizational sociologist and author of Organizations: Rational, Natural, and Open Systems

History

In response to classical management theorists, the 1950s and 1960s saw the rise of management thinkers who felt that the classic approaches were not flexible enough.1 From then on, organizational and management researchers began to study how situational factors influence organizational structure and management.

One innovative management thinker was Fred Fiedler, an organizational psychologist who taught at the University of Illinois.2 Fiedler developed the Contingency Theory of Leadership, which suggested that a leader’s effectiveness depends on the interaction between their leadership style and the situation. According to this theory, leadership styles can be characterized by the Least Preferred Co-Worker (LPC) scale, which Fiedler believed to be fixed and unchanging.

The LPC scale asked leaders to think about the person they least enjoyed working with, and rate how they felt about that person for a variety of factors (such as how friendly, interesting, or open they were).2 Leaders who rated their LPCs more negatively received a low score and were determined to be task-oriented leaders (known as low “LPCs”). Leaders who rated their LPCs more positively received a high LPC score and were determined to be relationship-oriented leaders (known as high “LPCs”). The model held that low LPCs are most effective at completing tasks and organizing groups, while high LPCs focus more on building relationships, and avoiding or managing conflict.

Since Fiedler thought leadership styles are relatively stable, he believed the effectiveness of management was determined by situational favourableness, which consists of three factors2

  • Leader-member relations: The amount of trust and confidence that team members have in their leader. More trustworthy leaders have more influence, so they are in a more favorable position.
  • Task structure: Is the task clear and structured, or vague and confusing? Unstructured tasks are unfavorable.
  • Leader’s position power: How much power a leader has to direct the group, as indicated by providing rewards or punishments. Having more power is more favorable.

The concept of “situationalism” soon became popular in the realm of leadership research, with notable scholars like Paul Hersey and Ken Blanchard developing similar contingency models.3 In fact, Hersey even established the Center for Leadership Studies in 1969, where training on situational leadership, coaching, parenting, and selling was provided.4

In 1986, Images of Organization was published by Canadian organizational behavior professor Gareth Morgan, which explored different organizational systems, the mechanisms within them, and the environments that influence them.5 In his book, Morgan summarized the main ideas that drive contingency approaches: organizations are open systems that require careful management to balance internal and external needs, but that does not mean there is one best way to organize. Those in managerial positions should be most concerned with aligning the organization’s structure with its own needs. This also includes recognizing that different types of skill sets and personalities may be needed in different environments.

People

   

Fred Fiedler

Born in Vienna, Austria, Fred Fiedler immigrated to the United States before serving in the army in the 1940s.5 Upon his return, he studied psychology at the University of Chicago before joining the psychology department at the University of Illinois. One of the leading researchers of industrial and organizational psychology in the 20th century, Fielder introduced the contingency model of leadership in 1976.6 Being the first to explore the intersection between personality characteristics and situational circumstances, Fiedler coined an innovative approach to effective leadership.

Consequences

Perhaps the greatest impact of Fiedler’s Contingency Theory of Leadership was the gaps that it pointed out in prior management theories. For example, German sociologist Max Weber argued for a bureaucratic model, which involved task specialization, hierarchical management, efficient and uniform requirements, and an impersonal environment.7 On the other hand, Frederick Taylor coined the theory of scientific management, also known as Taylorism, breaking down production into specialized and repetitive tasks to increase efficiency.8

Following the principles of a contingency approach, the aforementioned theories failed to recognize that management style and organizational structure can be influenced by fluctuating, contingent factors in the environment.2 Weber and Taylor focused on routine structures with explicit instructions for success, whereas contingency researchers like Fiedler suggest that this cannot be the correct approach to management.

The idea of job engineering, or job restructuring, also came out of Fielder’s Contingency Theory of Leadership.10 This is the idea that improving effectiveness requires the situation to fit the leader, due to the stable nature of personality. In terms of job training, this means that if all leaders are provided the same training regardless of their leadership style and situational favorableness there could be a mismatch between leader and situation. Fiedler notes that the right person for a specific job today might be the wrong person in six months or two years. Thus, it’s important for leaders to recognize changes in values, environmental demands, and adjust accordingly.

Controversies

Ironically enough, while Fielder developed his theory to address the flexibility that he felt classic management theories were lacking,2 the Contingency Theory of Leadership has been criticized for its lack of flexibility.11 The idea that people are permanently relationship- or task-oriented suggests that the most effective way to approach different tasks is to the change the leader, rather than allowing the original leader to change.

While some researchers have backed Fielder’s theory,13 criticism has also focused on the methodology for measuring leadership styles.14 Specifically, the validity of both the LPC scale15 and the supporting methodology have been questioned.16 One article criticizing the Contingency Theory of Leadership suggests that, even under the best circumstances, the LPC scale is only around 50% reliable for measuring leadership capability.17

Case Study

Functioning of military squads

While Fiedler focused on the leader’s interpersonal styles and the task performance of work groups, he did not consider the effects of group interpersonal style or socioemotional outcomes in his research.18 Building on Fiedler’s work, Alexander Wearing and Doyle Bishop wanted to explore whether the interpersonal style of a group could influence group member adjustment and task performance.

They investigated the effects of task (internal) and environmental (external) conditions on the psychological adjustment of trainee soldiers,18 as well as the effects of leader LPC, mean group LPC, and task situation on the performance and adjustment of group members, related to socioemotional outcomes. In total, 52 squads were assessed.

The researchers found that squads with low LPC leaders were better adjusted and performed better on tasks in competition conditions compared to non-competition conditions.18 Alternatively, squads with high LPC leaders were either not affected by competition, or their adjustment and performance were poorer in the competition conditions. This difference occurred because a task-oriented (low LPC) leader could meet the demands of the competitive task, while external pressures toward cohesiveness could compensate for a lack of interpersonal skills. As for the relationship-oriented (high LPC) leader, they could be less equipped to meet the demands of the task while their interpersonal skills become slightly redundant.

The interaction between leader and member LPC also played a role in group atmosphere, adjustment, and performance.18 Specifically, there was a tendency for low LPC groups with low LPC leaders to be less satisfied and cohesive, and to have the poorest interpersonal relations. However, squad LPC was not impacted by competition – above and beyond leader LPC – meaning that leaders still held a powerful position over group performance under competitive demands. Overall, this research highlights the role that leaders play in the functioning of military squads, such that they influence the relationship between squad members and environmental demands.

NASA’s Mars Climate Orbiter

While successful programs of space exploration provide valuable scientific information, this area of research is certainly risky and occasionally involves failures.19 NASA’s Mars Climate Orbiter (MCO) was supposed to circle Mars and collect the planet’s weather data, as well as act as a relay station to assist in data transmission. MCO launched on December 11, 1998 and travelled in space for nine months before its signal was irreversibly lost.

A review concluded that the main cause of the MCO loss was a failure to use metric units in the coding of a ground software file, defined as a technical error by NASA.19 However, project failures often extend beyond technical reasons. In fact, a retrospective analysis of MCO suggests that management could have prevented the failure with a better upfront assessment of the program’s uncertainty and complexity, as well as by installing systems that could have detected errors ahead of time. These mistakes could have been avoided by applying a contingency approach to the project.

Research on contingency approaches in project management emphasizes that not all projects are the same, nor should they be managed in the same way.19 Using a descriptive case study, researchers analyzed the MCO program using contingency approaches. They found that the challenges imposed upon the project were almost impossible to achieve, as management even admitted at a later point that they compromised key issues due to external pressures. Thus, there was an imbalance between internal and external factors. The researchers emphasized a need for those in project management to distinguish between doing the right project and doing the project right. Once a project is selected, project management should be adapted to the specific project type.

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Sources

  1. Contingency Approach to Management. (2019). Encyclopedia of Management. https://www.encyclopedia.com/management/encyclopedias-almanacs-transcripts-and-maps/contingency-approach-management
  2. Fiedler, F. E. (1967). A Theory of Leadership Effectiveness. McGraw Hill.
  3. Hersey, P., & Blanchard, K. H. (1969). Life cycle theory of leadership. Training & Development Journal, 23(5), 26-34.
  4. About us. (n.d.). The Center for Leadership Studies. https://situational.com/about-us-2/
  5. Morgan, G. (1986). Images of Organization. Sage Publications.
  6. Fiedler, F. (1992). Life in a pretzel-shaped universe. In Management Laureates: A Collection of Autobiographical Essays. Jai Press.
  7. Fred E. Fiedler. (n.d.). Society for Personality and Social Psychology. https://spsp.org/awards/heritage-wall-of-fame/fiedler
  8. Weber, M. (2015). Bureaucracy. In Working in America. Routledge.
  9. Taylor, F. W. (2004). Scientific Management. Routledge.
  10. Fiedler, F. E. (1974). The contingency model – New directions for leadership utilization. Journal of Contemporary Business, 3(4), 65-80.
  11. Gujral, G. S. (2012). Leadership Qualities for Effective Leaders. Vij Publishing Group.
  12. Bass, B. M. (1990). Leader March: A Handbook of Leadership. The Free Press.
  13. Strube, M. J., & Garcia, J. E. (1981). A meta-analytic investigation of Fiedler’s contingency model of leadership effectiveness. Psychological Bulletin, 90(2), 307-321.
  14. Vecchio, R. P. (1977). An empirical examination of the validity of Fiedler’s model of leadership effectiveness. Organizational Behavior and Human Performance, 19(1), 180-206.
  15. Ashour, A. S. (1973). The contingency model of leadership effectiveness: An evaluation. Organizational Behavior and Human Performance, 9(3), 339-355.
  16. Vecchio, R. P. (1983). Assessing the validity of Fiedler’s contingency model of leadership effectiveness: A closer look at Strube and Garcia. Psychological Bulletin, 93(2), 404-408.
  17. Mitchell, T. R., Biglan, A., Oncken, G. R., & Fiedler, F. E. (1970). The contingency model: Criticisms and suggestions. The Academy of Management Journal, 13(3), 253-267.
  18. Wearing, A. T., & Bishop, D. W. (1974). The Fiedler contingency model and the functioning of military squads. The Academy of Management Journal, 17(3), 450-459.
  19. Sauser, B. J., Reilley, R. R., & Shenhar, A. J. (2009). Why projects fail? How contingency theory can provide new insights – A comparative analysis of NASA’s Mars Climate Orbiter loss. International Journal of Project Management, 27, 665-679.

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