Contingency Theories of Leadership

The next stage in the evolution of leadership theories produced contingency theories, which examine the
interaction of characteristics of the leader and the situation, stating that effective leadership depends on
the proper match between the two. Many of the contingency theories do, however, build on the
behavioral theories, using the leader behavior dichotomies—task-oriented/ initiating structure and
relationship-oriented/consideration—as a starting point. However, contingency theories recognize no
one best style of leadership behavior. Rather, leader effectiveness depends, or is contingent on, the
interaction of leader behavior and the situation. We will examine four of the more popular contingency
theories of leadership: Fiedler’s contingency model, the path-goal theory, the decision-making model, and
the leader–member exchange model.

FIEDLER’S CONTINGENCY MODEL

The leadership theory proposed by psychologist Fred Fiedler (1967) is so well known that it is often simply
referred to as the contingency model. But, as outlined, the term contingency model actually specifies a
certain category of theory. Fiedler’s contingency model argues that effective leadership depends on a
match between a leader’s behavioral style and the degree to which the work situation gives control and
influence to the leader. In other words, the leader’s style of behavior must fit with the amount of control
and power the leader will have in the work situation. Building on the Ohio State and University of Michigan
behavioral approaches, Fiedler’s theory divides leaders based on their primary motivation— task-oriented
or relationship-oriented—which he sees as relatively fixed and stable. According to Fiedler, certain leaders
may be primarily concerned with getting the job done (task-oriented), although they are also concerned
with maintaining good group relations. Other leaders focus primarily on relationships and give
“secondary” concern to the task. In other words, leaders differ on which motivation takes precedence in
most situations. A task-oriented leader will attend less to the group, and the relationship-oriented leader
will tend to focus on the group at the expense of the task. To measure a leader’s orientation, Fiedler
developed a self-report measure referred to as the LPC measure, which stands for least preferred
coworker. The LPC requires leaders to rate the person with whom they had worked least well— “the
person with whom you had the most difficulty in getting a job done.” These ratings are done using bipolar
adjective rating scales, such as pleasant/unpleasant and friendly/unfriendly (see Figure 13.2). The LPC is
scored by summing the ratings on the scales. This total score indicates whether a person is a task-oriented
or relationship-oriented leader. Persons scoring relatively low on the LPC measure, giving their least
preferred coworkers very harsh ratings, are task-oriented leaders. Individuals who rate their least
preferred coworker somewhat leniently, leading to relatively high LPC scores, are considered to be
relationship-oriented. Scores from normative populations help determine what are low and high LPC
scores. The rationale behind this scoring system is that task-oriented leaders will be very critical of a poor
worker because they value task success. A relationship-oriented leader, on the other hand, values
interpersonal relationships and is likely to rate the least preferred coworker more leniently (Rice, 1978).
According to Fiedler, task-oriented leaders with low LPC scores link a worker’s poor performance with
undesirable personality characteristics, whereas relationship-oriented leaders with high LPC scores can
separate the least preferred coworker’s personality from the individual’s work performance (Fiedler,
1967).

Determining a leader’s task or relationship orientation with the LPC is only the first part of Fiedler’s
contingency model. The next step is defining characteristics of the work situation to find the proper match
between leadership style and the situation. The characteristics of a work situation are defined using three
variables—leader–member relations, task structure, and position power—that combine to create
circumstances that are either very favorable, very unfavorable, or neither favorable nor unfavorable for
the leader. Leader–member relations is the relationship between the leader and followers—in other
words, how well liked, respected, and trusted the leader is by subordinates. According to Fiedler, this
dimension can be measured on a scale involving good and poor ratings by having group members indicate
their loyalty for and acceptance of the leader. The second dimension, task structure, assesses how well a
job is structured by considering such factors as whether the group’s output can be easily evaluated,
whether the group has well-defined goals, and whether clear procedures for reaching those goals exist.
Tasks can be defined as “structured” or “unstructured.”

The third dimension that Fiedler uses to define the situation is position power, or the leader’s authority
over subordinates, which is usually defined as the leader’s ability to hire, fire, discipline, and reward.
Position power is assessed as either strong or weak. It is usually easy to determine position power,
because it is clearly outlined in company policies. Recall that according to Fiedler’s contingency model,
the key to effective leadership is the leader’s control and influence in a specific situation. Obviously, the
situation that is going to be most favorable for the leader is one in which the leader–member relations
are good, the task is structured, and the leader has strong position power. The least favorable situation
for the leader is one where leader–member relations are poor, the task is unstructured, and the leader
has weak position power. Research indicates that task-oriented leaders with low LPC scores are most
effective in situations that are either highly favorable or highly unfavorable for the leader—the two
extremes of the continuum. Relationship-oriented leaders are more effective in “middle situations” in
which the leader’s control and influence are neither low nor high. According to Fiedler, task-oriented
leaders with low LPC scores are successful in very unfavorable situations because their take-charge style
puts some structure into the circumstances and may encourage the group to perform the job. In other
words, in an extremely unfavorable situation, the task-oriented leader has nothing to lose. Taking a firm
hand and focusing on task performance and task-related goals may produce results, which is what is
needed in such a crisis. At these times followers might walk all over a relationship-oriented leader. In very
favorable situations, groups are already likely to be productive because the task is straightforward and
structured, relations between leader and members are good, and the leader has the power to reward for
good performance. Relationship-oriented leaders are more successful when their situational control and
influence are neither very high nor low. In these “middle” circumstances, it is important that leaders be
well equipped to deal with the interpersonal conflicts that inevitably arise. This is the specialty of the high-
LPC, relationship-oriented leaders. Because such situations may lack one of the three situational variables,
a leader who shows increased concern for workers and allows them to voice opinions may increase group
member satisfaction levels and even job performance. By contrast, being task-oriented in these situations
may be counterproductive, alienating members and decreasing levels of satisfaction, because the leader
appears to care only about the task. Fiedler also argued that high-LPC leaders may be more cognitively
complex, or better able to deal with complex situations. Situations that are neither clearly favorable nor
clearly unfavorable for the leader are complex and are best handled by such a person. Figure 13.3 is a
graphic representation of the predictions made by the Fiedler model. The graph shows that task-oriented
leaders (solid line) have higher group performance when in very favorable or very unfavorable situations.
Relationship-oriented leaders (dotted line) lead higher-performing groups in situations of moderate
favorability. Although some studies have failed to find the predictions made by Fiedler’s theory (Vecchio,
1977), others have generally supported the model (Peters, Hartke, & Pohlmann, 1985; Strube & Garcia,
1981). However, the predictions hold up better in laboratory studies than in studies conducted in actual
work settings (Peters, Hartke, & Pohlmann, 1985). Critics have focused primarily on the use of the LPC
measure, arguing that it is not clear exactly what it measures because it only infers a leader’s orientation
from feelings about a coworker rather than directly assessing task and relationship orientation (Ashour,
1973; Schriesheim, Bannister, & Money, 1979). Another criticism concerns individuals who score near the
middle of the LPC scale. In fact, one researcher divided the ratings into high, low, and middle scores and
found that the middle-LPC leaders seemed to be effective in a range of situations (Kennedy, 1982).
Another weakness in Fiedler’s predictions concerns the assessment of situations, for it is not clear how
actual work situations would break down in terms of their favorableness for the leader. In other words,
we do not know how many real-world situations would be favorable or very unfavorable for the leader
and thus demand a task-oriented leader. Nor do we know how many situations are moderately favorable
for the leader or what distinctions there are between moderately favorable situations (e.g., are there “low
moderate” and “high moderate” favorable situations?). Despite these criticisms, the Fiedler contingency
model is important for many reasons. First, it was the first highly visible leadership theory to present the
contingency approach. Second, its detailed attention to the situation emphasized the importance of both
situation and leader characteristics in determining leader effectiveness. Third, Fiedler’s model stimulated
a great deal of research, including tests of its predictions and attempts to improve on the model, and
inspired the formulation of alternative contingency theories. Finally, it also led to the development of a
program by Fiedler and his colleagues (Fiedler & Chemers, 1984) to apply his theory to actual leadership
situations. Known as Leader Match, their program consists of a workbook containing an LPC measure,
leadership problems that the leader must analyze and solve, directions on how to assess elements of the
leader’s situation, guidelines for changing elements of the situation, and suggestions for helping
subordinates improve performance. Basically, Leader Match teaches managers to recognize their own
leadership orientation using the LPC and then trains them to recognize those situations in which they are
most likely to succeed. If a mismatch is discovered between the leader’s orientation and the work
situation, suggestions are made for changing one or more of the three situational variables to provide a
more appropriate fit. For example, if a low-LPC, task-oriented leader is in a situation of moderate
favorability in which leader–member relations are fair, the task is unstructured, but position power is
strong, an attempt might be made either to improve leader–member relations or to make the group work
task more structured to increase the favorability of the situation and thus make it more compatible with
the leader. The Leader Match program holds that it is more effective to change the situation, or to fit
certain types of leaders to appropriate situations, than it is to try to change the leader’s style of behavior.
Leader Match has been widely used. Fiedler claims that it has been used by more than 40,000 managers.
Although the program has been shown to be quite successful in increasing managers’ leadership
effectiveness (Leister, Borden, & Fiedler, 1977), it is not without its critics, who argue that at times Leader
Match does not follow the predictions made by the theory (Jago & Ragan, 1986; Kabanoff, 1981). In sum,
Fiedler’s contingency model was one of the first detailed theories of leadership. It makes certain
predictions about the situations in which certain types of leaders will be effective and has been a
straightforward and widely used intervention for improving leader effectiveness (Ayman, Chemers, &
Fiedler, 1995).

THE PATH-GOAL THEORY

Expanding on the definition of leadership presented at the start of this chapter, the path-goal theory
states that a leader’s job is to help the work group attain the goals that they desire (House, 1971; House
& Mitchell, 1974). The leader is accordingly seen as a facilitator, or guide, who helps the group overcome
the various barriers and roadblocks they may encounter on the way to achieving their goals. Usually these
goals involve increasing worker motivation to perform the job and attempting to gain increases in worker
satisfaction. As is reflected in its emphasis on worker motivation, the expectancy theory of motivation
(see Chapter 8) was used as the foundation for the path-goal theory (Yukl, 1998). To help the group reach
its goals, the leader may adopt one of four categories of behavior—directive, achievement-oriented,
supportive, and participative—the selection of which depends on the characteristics of the situation.
Directive behavior provides instructions and suggestions for getting the job done. Examples include giving
workers specific guidelines and procedures, setting up schedules and work rules, and coordinating work
group activities.

Achievement-oriented behavior focuses on specific work outcomes and may involve setting challenging
goals for the group and measuring and encouraging improvements in performance. Supportive behavior
concentrates on the interpersonal relations among group members by showing concern for workers’ well-
being and providing a friendly work environment. Finally, participative behavior encourages members to
take an active role in work group planning and decision making through actions such as soliciting
information from workers about how to do the job and asking for opinions and suggestions. These four
types of leader behaviors outlined in the path-goal theory offer a more detailed breakdown of the
initiating structure (task-oriented) and consideration (relationship-oriented) behaviors: Directive and
achievement-oriented behaviors are two kinds of initiating structure behavior, while the supportive and
participative behaviors are two kinds of consideration behaviors. The choice of leader behavior is
contingent on the type of work task and the characteristics of the followers. For example, if a task is
routine and easy to understand and if the work group is made up of experienced, self-motivated
individuals, the directive style of leadership would probably not be needed because followers can perform
the job without much supervision. Instead, supportive behavior might be called for to maintain a
harmonious work setting, or participative behavior may be necessary to encourage employees to suggest
ways to improve work procedures and the work environment. On the other hand, if the task is fairly
complex and the workers are somewhat inexperienced, a directive style might be appropriate.

The results of research on the path-goal theory have been mixed (House, 1996). Although there has been
some support for the model (Dixon & Hart, 2010; House & Dessler, 1974; Wofford & Liska, 1993), its
general approach and its inability to make specific and precise predictions in actual work settings have
been criticized (Schriesheim & Kerr, 1977; Yukl, 1989). The theory does offer some idea of how leaders
must change their behavior to fit the situation, but the biggest disappointment is that it has not led to a
specific type of intervention for use on the job (Miner, 1983). On the positive side, like Fiedler’s
contingency model, the path-goal theory offers a rather detailed assessment of the situation in an effort
to relate the leader’s behavior to the characteristics of a specific situation. It also goes a step beyond the
simple dichotomy of task orientation and relationship orientation in defining leader behavior.

THE DECISION-MAKING MODEL

As seen in Chapter 12, one of the major tasks of a work group leader is to preside over important work-
related decisions. Vroom and his colleagues (Vroom & Jago, 1988; Vroom & Yetton, 1973) have developed
a contingency theory of leadership called the decision-making model that is based on the premise that
leaders are basically decision makers. This theory is somewhat unique in that it not only makes predictions
about proper leader behavior in making decisions but also actually gives “prescriptions” for the decision
maker to follow.

The decision-making theory holds that a leader can make work decisions using a number of strategies,
ranging from acting alone (purely autocratic decision making) to arriving at a decision on the basis of group
consensus (completely participative decision making). In the latter type of decision making the leader is
just another group member. The five decision-making styles used in the decision-making model are
presented in Table 13.1. To define the decision-making situation, the theory provides a series of yes–no,
work-related questions that a leader must ask before adopting a particular strategy. For example, the first
question is whether or not a high-quality decision is needed. If the leader answers “yes,” it is likely that a
more participative style is needed; if the answer is “no,” it is likely that a more autocratic style is
appropriate. Of course, the decision-making style chosen is a composite of all questions. The decision-
making model presents a decision tree framework for the leader to follow, with each of the seven
questions representing a choice point that eventually leads to the correct behavior for the decision that
needs to be made (see Figure 13.4). Consider, for example, the manager of the parts department of an
automobile dealer who must purchase a computer software inventory system for the department. A
number of systems are available, each with its own advantages and drawbacks. The leader answers each
of the questions on the decision tree as follows:

a. Yes, there is a need for quality—a system that will work best in our department.

b. No, the leader doesn’t have enough information to make a quality decision

alone.

c. No, the problem is not structured, because there is no clear-cut way to

decide among the various systems.

d. Yes, subordinates will be using the system and need to accept it.

e. No, if subordinates did not like the system they might avoid using it.

f. Yes, workers do share organizational goals (they want a system that will do

the job).

g. Not applicable.

This framework suggests that the leader should use a group strategy to arrive at a consensus. Because the
department is small and the workers are involved in their jobs, they can contribute a great deal to the
decision-making process, and it is critical that they accept the decision. Research has largely supported
this decision-making model (Field, 1982; Field & Andrews, 1998; Margerison & Glube, 1979; Paul & Ebadi,
1989). For example, a study found that the effective strategies used by actual managers to solve important
work-related decisions were consistent with the theory’s prescriptions (Vroom & Jago, 1978). Because of
the normative nature of the model, it is also a unique combination of theory and application. As a
contingency model, it is effective because it considers how a leader’s individual behavior fits with the
dynamics of a specific situation. Moreover, it provides a very detailed definition of the situation, as
outlined by the decision-related questions. The major problem with the model is its complexity, which
may make it difficult for managers to understand and to learn to use. (In fact, revisions to the decision-
making theory have further refined it, and made it even more complex and precise than what is presented
in Figure 13.4 (Vroom & Jago, 1995).) This occurs to theories in general: As they get closer to modeling
realworld complexity, they may also become harder to apply. There is a general tendency for people to
look for relatively simple solutions to problems. Thus, although complex contingency models, such as the
decision-making model, might be sound and accurate, they may not be widely used or accepted in actual
work settings due to their complex nature.

THE LEADER–MEMBER EXCHANGE MODEL

The previous contingency models of leadership, including Fiedler’s model and the path-goal theory, fit the
leader’s behavior to various characteristics of the work situation. Fiedler’s model also considers the
amount of power a leader has in a given situation, whereas the decision-making theory weighs a variety
of characteristics related to a situation. The leader–member exchange model (LMX) takes a different
approach and considers that effective leadership is determined by the quality of the interaction between
the leader and a particular work group member (Dansereau, Graen, & Haga, 1975; Graen & Uhl-Bien,
1995). According to this theory, the worker is the situation. Basically, the model (which was formerly called
the vertical dyad linkage model) states that the types of one-on-one, or dyadic, relationships that develop
between the leader and each follower will be somewhat different. In any work group, the leader tends to
develop better relationships with a few subordinates (the in-group), whereas the rest receive less
attention or concern from the leader (the out-group). The character of the leader–member exchange can
range from low quality, in which the leader has a negative image of the subordinate, and the subordinate
does not respect or trust the leader, to high quality, in which the leader has a positive view of the worker,
and the worker feels that the leader is supportive and provides encouragement. Of course, such
differences affect important outcomes such as work performance, employee loyalty and attendance, and
job satisfaction (Gerstner & Day, 1997; Graen, Novak, & Sommerkamp, 1982; Howell & Hall-Merenda,
1999; Kim, Lee, & Carlson, 2010; Wayne & Ferris, 1990). As one might expect, in high-quality leader–
member relations, there is frequent communication between the leader and subordinate, and these
interactions are generally positive. In low-quality LMX relationships, communication is infrequent and/or
less positive in tone (Kacmar, Witt, Zivnuska, & Gully, 2003). The notion that leaders develop different
types and quality of relationships with subordinates makes sense. For example, the president of a large
company may have to interact with a number of department managers. Some of them may be the trusted
advisers with whom the president interacts quite frequently and to whom he gives an important role in
establishing company policy. The president’s relationships with other managers may not be close at all,
and they may in fact have very little actual contact with the president. Naturally, and as the LMX model
predicts, the motivation to perform and the levels of satisfaction of the in-group managers are likely to
be high, whereas the out-group managers may not be very motivated or satisfied. The authors of the LMX
theory claim that their approach is an improvement over other leadership theories because previous
models assume that leaders act in a relatively uniform way toward all subordinates. Because these
traditional approaches look only at typical, or average, leader behavior and ignore the nontypical behavior
displayed in very good or very poor leader–member exchanges, a focus on specific leader–member
relations will lead to better predictions of the effects of that leader behavior on work outcomes
(Dansereau et al., 1975; Graen, 1976; see also Vecchio, 1982). In other words, rather than looking at how
the leader’s behavior influences a particular outcome in subordinates, the LMX approach generally
emphasizes how a leader’s particular behavior with particular subordinates—both in-group and out-group
members—affects their specific job outcomes. The leader–member exchange model is quite popular and
has generated a considerable amount of research. A number of improvements have been made to the
theory, including improvements in measuring in-group/out-group membership and the quality of leader–
member exchanges (Duchon, Green, & Taber, 1986; Graen & Scandura, 1985; Liden & Maslyn, 1998;
Phillips & Bedeian, 1994). Evidence suggests that LMX is a two-way street, with the quality of relationships
being influenced by the effort and energy put into the relationships by both the leader and the follower
(Maslyn & Uhl-Bien, 2001). The strategy for applying LMX to improving leader effectiveness seems
relatively straightforward: Improve the quality of leader–member relationships. Tests of leadership
training programs aimed at this goal have been encouraging. For example, in one study of 83 computer-
processing employees of a large service organization, a program that trained leaders to listen and
communicate their expectations to subordinates led to a 19% increase in work group productivity and
significant increases in subordinates’ job satisfaction (Scandura & Graen, 1984). In another study, the
quality of leader–member exchanges between supervisors and newly hired employees in the newcomers’
first five days on the job predicted the quality of leader–member exchanges at six months, indicating the
importance of developing good-quality supervisor–subordinate interactions early on (Liden, Wayne, &
Stilwell, 1993).