July 28, 2023
5 min read
If you’re seeking the optimal way to guide your team and boost employee productivity, you might find yourself overwhelmed by the multitude of theories on the best leadership style. It can be challenging to discern which approach is truly the most effective. However, contingency theory proposes that there isn’t a single “best” leadership style — rather, the ideal approach depends on the specific situation.
Contingency theory prompts managers to consider various aspects of their employees and the current circumstances. Equipped with this understanding, you can modify your leadership style to elicit the most positive response from their team members.
Table of contents
Contingency theory definition
The core premise of contingency theory is that there’s no universally correct way to lead a team or make decisions. Instead, it advocates for a strategy that’s flexible and adaptable to the situation at hand.
Leaders who embrace contingency theory adjust their leadership style based on factors such as interpersonal relationships within the workplace or feedback from employees.
Origins of contingency theory
Contingency theory was first introduced by Fred Fiedler, a prominent researcher in organizational psychology during the 20th century. Rather than categorizing leaders as either bad or good, Fiedler’s contingency theory emphasized aligning necessary leadership traits with specific challenges.
Fiedler identified leaders as either relationship-oriented or task-oriented, asserting that success in leadership depended on how favorable the situation was. In essence, contingency theory suggests that numerous variables can alter the requirements of a scenario. Consequently, leaders need to adapt their style or delegate tasks to individuals with suitable skill sets to navigate these challenges effectively.
Advantages of adopting contingency theory
Contingency theory presents several advantages for managers. Given that product managers often collaborate with cross-functional teams, it’s crucial to understand how to effectively respond to a range of personalities and employee needs. Contingency theory can introduce the necessary level of adaptability for diverse situations.
Some other benefits include:
- Self-reflection — Contingency theory fosters self-reflection in leadership styles
- Situation focus — It tends to focus on the situation rather than the individual leader
- Leadership determination — It offers a straightforward way to determine who might be the best leader for a given situation
- Team awareness — It promotes awareness of team members and the situation
- Guidance — It provides clear guidance on what factors to consider when choosing a leadership style
4 types of contingency theory
Over time, four distinct contingency theories have been developed. While they all adhere to basic principles, each one exhibits slight variations:
- Fielder model
- Situational leadership model
- Path-goal model
- Decision-making model
The Fiedler model is the original contingency theory. To apply it, a leader must possess situational awareness and understand their own leadership style.
The Fiedler model uses a scale known as the Least Preferred Coworker (LPC) as a guide to evaluate a coworker they find most challenging to work with:
A high score indicates that the leader is an HPC leader with a strong tendency toward being relationship-oriented — ideal for situations like conflict management and morale building. Conversely, a low score suggests that the leader is an LPC leader who is more task-oriented. These leaders are better suited for project management and logistical tasks.
Once you’ve identified your leadership style, it’s time to assess situational favorableness. This is determined by three variables that significantly influence a product manager’s ability to lead effectively:
- Leader-member relations — The extent to which a manager is liked by their team
- Task structure — The degree of organization of a task or process and whether it’s understood by the team
- Leader-position power — The amount of formal authority a manager has over their work
These characteristics determine situational favorableness. More favorable situations require task-oriented leaders, while less favorable ones benefit from relationship-oriented leaders.
Situational leadership model
Unlike Fiedler’s model, the situational leadership model allows leaders greater flexibility in adapting their approach based on circumstances. It focuses on the team’s maturity before determining an appropriate leadership style:
Maturity often refers to aspects such as team members’ experience, autonomy, willingness to take responsibility, confidence, and capability. This model outlines four leadership styles:
- Delegating style — Ideal for experienced and capable team members; this style involves assigning tasks or leading projects
- Participating style — Used when building confidence in team members; this style often involves one-on-one mentoring sessions where ideas are shared and collaboration occurs
- Selling style — Designed for team members who lack motivation or initiative; this style aims at persuading team members to complete their tasks
- Telling style — Beneficial for inexperienced team members; this approach involves giving directions and closely supervising them until they mature
The Path-Goal model centers around employees and their individual goals. Leaders assist their team members in developing daily, weekly, or career goals and then collaborate with them to achieve those objectives. The aim of the Path-Goal model is to enhance employee motivation and productivity by fostering job satisfaction:
This approach requires leaders to be highly adaptable since they need to tailor their leadership style according to each individual’s needs. Leaders also need awareness of their employees’ skill sets and what areas may require coaching for success.
There are four different leadership styles within the Path-Goal model:
- Directive clarifying leader — This type of leader provides explicit instructions on specific tasks they want their team members to accomplish. Teams with ambiguous or unstructured roles may benefit most from this type of leadership
- Achievement-oriented leader — Leaders who manage confident high-achievers may set high expectations and goals while encouraging autonomy at work
- Participative leader — These leaders solicit feedback from employees before making decisions — typically effective in small teams or when employees have vested interest in outcomes
- Supportive leader — Alongside productivity concerns, supportive leaders care about employees’ well-being and mental health — taking into account individual employee preferences
The decision-making model focuses on how decisions are made, which ultimately determines the relationship between a leader and their team members:
This model outlines five leadership styles:
- Autocratic (A1) — The leader makes decisions independently without input from their team
- Autocratic (A2) — The leader makes decisions independently but gathers information from their team first
- Consultative (C1) — The leader makes decisions independently but gathers information from individual team members first
- Consultative (C2) — The leader makes decisions independently but frequently gathers information from team members before doing so
- Collaborative (G2) — A group discusses the situation collectively and makes decisions together through voting
How to apply the contingency theory of management
To implement the contingency theory effectively, a certain level of self-awareness and understanding of your team members is crucial. Here are some steps to follow when applying contingency theory as a product manager:
- Identify your leadership style — Use the Least Preferred Coworker (LPC) scale test to determine whether you’re more relationship-oriented or task-oriented. It’s also beneficial to observe how you naturally react in different work situations, especially how you adapt based on the task at hand, the team members involved, and other variables
- Seek feedback from your team — A potential drawback of contingency theory is that your perspective might be biased, leading you to overlook signs of an unfavorable situation. To counter this, ask your team members for their opinions on task clarity and their trust in management
- Improve situational favorableness — Enhance leader-member relations through open and transparent communication. Make tasks and processes clearer and more structured, and seek opportunities to increase your authority, such as pursuing higher-level positions
- Understand your employees — Knowing what your employees want to achieve in their careers is essential. As a product manager, being aware of individual employee goals and skill sets can help ensure their success
- Assess your situation regularly — Numerous factors can impact your workplace, including customer demand, changes in government policies, and other unpredictable challenges. Maintaining awareness of both external factors and the internal work environment can help you decide which leadership style will best promote productivity and boost morale among employees
What does contingency theory look like in practice?
Let’s consider a practical example of how contingency theory might be applied.
Suppose you’ve just been hired as a product manager at an established company. According to Fiedler’s model, leader-member relations would initially be poor because you’re new and haven’t yet built trust with the team. The task structure is high due to the company’s established nature, but your leader-position power is low as a junior manager.
In this case, adopting a relationship-oriented leadership style could help improve relations with your new colleagues while also paving the way for advancement within the company.
What are some limitations of contingency theory?
One critique of Fiedler’s model is that it suggests a leader who excels in one situation may struggle in another. This implies that changing leaders may be necessary — an option that isn’t always feasible or desirable. It doesn’t account for the possibility that managers can adapt their leadership style according to situational needs.
To address this issue, consider exploring other types of contingency theories to identify a leadership style that suits the specific circumstances you encounter at work.
While there are various types of contingency theories with differing approaches to team management, they all share common elements. Your leadership style will need to adapt based on the task at hand, employee behaviors, and the level of authority you hold in your position.
Being a great leader requires flexibility in your leadership style. Adapting to changing circumstances can help propel projects forward and keep employees motivated.
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