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CHAPTER 4

Contingency Leadership Theories

Chapter Outline

I. CONTINGENCY LEADERSHIP THEORIES AND MODELS

A. Leadership Theories versus Leadership Models

B. Contingency Theory and Model Variables

C. Global Contingency Leadership

II. CONTINGENCY LEADERSHIP THEORY AND MODEL

A. Leadership Style and the LPC

B. Situational Favorableness

C. Determining the Appropriate Leadership Style

D. Research, Criticism, and Applications

III. LEADERSHIP CONTINUUM THEORY AND MODEL

IV. PATH-GOAL LEADERSHIP THEORY AND MODEL

A. Situational Factors

B. Leadership Styles

C. Research, Criticism, and Applications

V. NORMATIVE LEADERSHIP THEORY AND MODELS

A. Leadership Participation Styles

B. Model Questions to Determine the Appropriate Leadership Style

C. Selecting the Time-Driven or Development-Driven Model for the Situation

D. Determining the Appropriate Leadership Style

E. Research, Criticism, and Applications

VI. PUTTING THE BEHAVIORAL AND CONTINGENCY LEADERSHIP THEORIES TOGETHER

A. Prescriptive and Descriptive Models

VII. LEADERSHIP SUBSTITUTES THEORY

A. Substitutes and Neutralizers

B. Leadership Style

C. Changing the Situation

D. Research, Criticism, and Applications

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New To This Edition

 The chapter has been updated throughout. However, this chapter is based on older contingency leadership

theories. Therefore, it includes more classical references than several of the other chapters. There are 46

references and 13 are from the 5e; so 33 or 72 percent of the references are new to this edition

 The opening case is still Indra Nooyi at PepsiCo, but the case has been completely re-written.

 The Contingency Leadership Theory and Models section introduction has been updated with all new

references.

 The closing case name has been changed by dropping the name Terry Gou from the title. It has been

updated and the information about Foxconn has been shortened a bit.

 There are changes to all of the applying the concept boxes.

 The skill building exercises include the new AACSB General Skills Areas

Lecture Outline

PowerPoint: You may use the PowerPoint supplement to enhance your lectures. Even if your classroom is not

equipped to use PowerPoint, you can review the material on your personal computer to get teaching ideas and to

copy the slides. Copies of the slides can be made into overheads. (Slide 4-1 is a title slide, 4-2 and 4-3 hold LO’s)

II. CONTINGENCY LEADERSHIP THEORIES AND MODELS

Learning Outcome (LO) 4-1. State the major difference between behavioral and contingency

leadership theories, and explain the behavioral contribution to contingency theories.

Behavioral theories attempt to determine the one best leadership style for all situations. Contingency

leadership theories contend that there is no one best leadership style for all situations. Behavioral theories

contributed to contingency theories because their basic leadership styles are used in contingency

leadership models.

A. Leadership Theories versus Leadership Models (Slide 4-4)

As defined in Chapter 1, a leadership theory is an explanation of some aspect of leadership; theories have

practical value because they are used to better understand, predict, and control successful leadership.

A leadership model is an example for emulation or use in a given situation.

All of the contingency leadership theories in this chapter have leadership models. The leadership theory is the

longer text that explains the variables and leadership styles to be used in a given contingency situation. The

leadership model is the short (one page or less) summary of the theory to be used when selecting the appropriate

leadership style for a given situation.

B. Contingency Theory and Model Variables (Slide 4-5, also exhibit 4.1)

LO 4-2. Describe the contingency leadership theory variables.

The contingency leadership variables used to explain the appropriate leadership style are the leader,

followers, and situation. The leader factor is based on personality traits, behavior, and experience. The

followers factor is based on capability and motivation. The situational factor is based on task, structure,

and environment.

For a leader to be effective, there must be an appropriate fit between the leader’s behavior and style and the

followers and the situation.

Recall from Chapter 1 that contingency leadership theories attempt to explain the appropriate leadership style

based on the leader, followers, and situation.

See Exhibit 4.1 for a list of general contingency leadership variables that can be used as a framework in which

to place all the contingency leadership model variables for analyzing leadership.

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YOU MAKE THE ETHICAL CALL 4.1

Leadership Gender

Answers will vary based on opinion.

C. Global Contingency Leadership

Global companies realize successful leadership styles can vary greatly from place to place.

The growing cultural diversity of the workforce and the increasing globalization of the marketplace create the

need for leaders with multicultural backgrounds and experiences. This reinforces the message of the global

contingency leadership.

II. CONTINGENCY LEADERSHIP THEORY AND MODEL

LO 4-3. Identify the contingency leadership model styles and variables.

The contingency leadership model styles are task and relationship. The variables include (1) the leader–

follower relationship, (2) the leadership styles—task or relationship, and (3) the situation—task structure

and position power.

In 1951, Fred E. Fiedler began to develop the first situational leadership theory. It was the first theory to specify how

situational variables interact with leader personality and behavior. He called the theory “Contingency Theory of

Leader Effectiveness.”

The contingency leadership model is used to determine if a person’s leadership style is task- or relationship-

oriented, and if the situation (leader–member relationship, task structure, and position power) matches the leader’s

style to maximize performance. (Slide 4-7 and 4-8, also exhibit 4.2)

A. Leadership Style and the LPC (Slide 4-9)

The first major factor in using Fielder’s model is to determine whether your dominant leadership style is task-

motivated or relationship-motivated.

To determine leadership style, using Fiedler’s model, you must complete the least preferred coworker (LPC)

scales. The LPC essentially answers the question, “Are you more task-oriented or relationship-oriented?” The

two leadership styles are (1) task and (2) relationship.

Self-Assessment 4-1

Leadership Style: Your Fiedler LPC

If you want students to complete the Self-Assessment exercises throughout the

book, you may want to tell students and spend a little time talking about them.

B. Situational Favorableness (Slide 4-10)

After determining your leadership style, determine the situational favorableness.

Situation favorableness refers to the degree to which a situation enables the leader to exert influence over the

followers. The more control the leader has over the followers, the more favorable the situation is for the leader.

The three variables, in order of importance, are:

1. Leader–member relations. Is the relationship good or poor? Do the followers trust, respect, accept, and

have confidence in the leader? The better the relations, the more favorable the situation.

2. Task structure. Is the task structured or unstructured? Do employees perform repetitive, routine,

unambiguous, standard tasks that are easily understood? The more structured the jobs are, the more

favorable the situation.

3. Position power. Is position power strong or weak? Does the leader have the power to assign work, reward

and punish, hire and fire, give raises and promotions? The more power, the more favorable the situation.

The relative weights of these three factors together create a continuum of situational favorableness of the leader.

Fiedler developed eight levels of favorableness, going from 1 (highly favorable) to 8 (very unfavorable). See

Exhibit 4.3 for an adapted model.

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C. Determining the Appropriate Leadership Style (Slide 4-11)

To determine whether task or relationship leadership is appropriate, answer the three questions pertaining to

situational favorableness, using the Fiedler contingency theory model (Exhibit 4.3, Slide 4-12).

Start with question 1 and follow the decision tree to Good or Poor depending upon the relations. Next, answer

question 2 and follow the decision tree to Repetitive or Non repetitive. When answering question 3, you end up

in one of eight possible situations. If the LPC leadership style matches, do nothing, since you may be successful

in that situation.

1. Changing the Situation

However, if the leadership style does not match the situation, the leader may be ineffective. One option is

to change to a job that matches the leadership style. Fiedler recommends (and trains people to) change the

situation, rather than their leadership styles.

CONCEPT APPLICATION 4-1

Contingency Leadership Theory

Answers to the Concept Application questions are at the end of lecture outline.

WORK APPLICATION 4-1

Select a present or past manager. Which LPC leadership style is or was dominant

for that manager? Using the Fiedler model (Exhibit 4.3), which situation number is

the manager in? What is the appropriate leadership style for the manager in this

situation? Does it match his or her style? How successful a leader is your manager?

Do you think there is a relationship between the manager’s leadership style and

situation?

If you are a manager, you may want to repeat this work application, using yourself

as the manager.

D. Research, Criticism, and Applications (Slide 4-13)

Despite its groundbreaking start to contingency theory, Fiedler’s work was criticized for weak statistical results.

Two meta-analyses concluded that the research tends to support the model, although not for every situation and

not as strongly for field studies as for laboratory studies.

Another criticism is of Fiedler’s view that leaders should not change style, but rather the context of the job

should be changed. It is generally agreed that is it much easier to change style to meet the context of the job

than to change the job context.

Despite the critics, Fiedler has helped contribute to the other contingency theories. It can help explain why a

hard-working manager is not effective in a specific job – no match of style to context.

III. LEADERSHIP CONTINUUM THEORY AND MODEL

LO 4-4. State the leadership continuum model major styles and variables.

The two major continuum leadership model styles are boss-centered and subordinate-centered. The

variables include (1) the boss, (2) the subordinates, and (3) the situation (time).

Robert Tannenbaum and Warren Schmidt also developed a contingency theory in the 1950s. They stated that

leadership behavior is on a continuum form from boss-centered to subordinate-centered leadership. Their model

focuses on who makes the decisions. (Slide 4-14, also exhibit 4.4)

Tannenbaum and Schmidt identify some major styles the leader can choose from. Exhibit 4.5 is an adaptation of

their model.

The leadership continuum model is used to determine which one of seven styles to select based on the use of boss-

centered versus subordinate-centered leadership, to meet the situation (boss, subordinates, situation/time) in order

to maximize performance. (Slide 4-15)

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Before selecting one of the seven leadership styles, the leader must consider the following three forces or variables:

(Slide 4-16)

 Boss. The leader’s personality and behavioral preferred style—based on experience, expectation, values,

and confidence in the subordinates—are considered in selecting a leadership style. Based on personality

and behavior, some leaders tend to be more autocratic and others more participative.

 Subordinates. The followers’ preferred style for the leader is based on personality and behavior, as with the

leader. Generally, the more willing and able the followers are to participate, the more freedom of

participation should be used, and vice versa.

 Situation (time). The environmental considerations, such as the organization’s size, structure, climate,

goals, and technology, are considered in selecting a leadership style.

The time available is another consideration. It takes more time to make participative decisions. Thus, when

there is no time to include followers in decision making, the leader uses an autocratic leadership style.

Although the leadership continuum model was very popular, it did not undergo research testing like the contingency

leadership model.

One major criticism of the model is that the three factors to consider when selecting a leadership style are very

subjective. In other words, determining which style to use, and when, is not clear in the model.

CONCEPT APPLICATION 4-2

Leadership Continuum

Answers to the Concept Application questions are at the end of lecture outline.

WORK APPLICATION 4-2

Using the leadership continuum model (Exhibit 4.5), identify your manager’s

most commonly used leadership style by number and description. Would you say

this is the most appropriate leadership style based on the leader, the followers, and

situation? Explain.

IV. PATH-GOAL LEADERSHIP THEORY AND MODEL

LO 4-5. Identify the path-goal leadership model styles and variables.

The path-goal leadership model styles include directive, supportive, participative, and achievement-

oriented. Variables used to determine the leadership style are the subordinate and the environment.

The path-goal leadership theory was developed by Robert House. His theory specified a number of situational

moderators of relationships between task- and person-oriented leadership and their effects. House attempted to

explain how the behavior of a leader influences the performance and satisfaction of the followers (subordinates).

The path-goal leadership model is used to select the leadership style (directive, supportive, participative, or

achievement-oriented) appropriate to the situation (subordinate and environment) to maximize both performance

and job satisfaction.

Note that path-goal leadership theory is based on motivation theories of goal setting and expectancy theory. The

leader is responsible for increasing followers’ motivation to attain personal and organizational goals.

Motivation is increased by (1) clarifying the follower’s path to the rewards that are available, or (2) increasing the

rewards that the follower values and desires.

Path clarification means that the leader works with followers to help them identify and learn the behaviors that will

lead to successful task accomplishment and organizational rewards. (Slides 4-17 through 4-19, includes exhibits

4.6 and 4.7)

A. Situational Factors

1. Subordinate (Slide 4-20)

Subordinate situational characteristics include:

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a. Authoritarianism is the degree to which employees defer to others, and want to be told what to do and

how to do the job.

b. Locus of control is the extent to which employees believe they control goal achievement (internal) or if

goal achievement is controlled by others (external).

c. Ability is the extent of the employees’ ability to perform tasks to achieve goals.

2. Environment (Slide 4-21)

Environment situational factors include:

a. Task structure is the extent of repetitiveness of the job.

b. Formal authority is the extent of the leader’s position power.

c. Work group is the extent to which coworkers contribute to job satisfaction or the relationship between

followers.

YOU MAKE THE ETHICAL CALL 4.2

Drug Research

Answers will vary based on opinion.

B. Leadership Styles (Slide 4-22)

Based on the situational factors in the path-goal model, the leader can select the most appropriate leadership

style by using the following general guidelines for each style.

1. Directive

The leader provides high structure.

Directive leadership is appropriate when the followers want authority leadership, have external locus of

control, and the follower ability is low.

Directive leadership is also appropriate when the environmental task is complex or ambiguous, formal

authority is strong, and the work group provides job satisfaction.

2. Supportive

The leader provides high consideration.

Supportive leadership is appropriate when the followers do not want autocratic leadership, have internal

locus of control, and follower ability is high.

Supportive leadership is also appropriate when the environmental tasks are simple, formal authority is

weak, and the work group does not provide job satisfaction.

3. Participative

The leader includes employee input into decision making.

Participative leadership is appropriate when followers want to be involved, have internal locus of control,

and follower ability is high; when the environmental task is complex, authority is either strong or weak, and

job satisfaction from coworkers is either high or low.

4. Achievement-Oriented

The leader sets difficult but achievable goals, expects followers to perform at their highest level, and

rewards them for doing so.

Achievement-oriented leadership is appropriate when followers are open to autocratic leadership, have

external locus of control, and follower ability is high; when the environmental task is simple, authority is

strong, and job satisfaction from coworkers is either high or low.

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CONCEPT APPLICATION 4-3

Path-Goal Leadership

Answers to the Concept Application questions are at the end of lecture outline.

C. Research, Criticism, and Applications (Slide 4-23)

A meta-analysis based on 120 studies examined directive and supportive behavior and showed that support for

path-goal theory was significantly greater than chance, but results were quite mixed. And extensive review of

the research on moderator variables in leaders also had inconclusive findings.

Although path-goal theory is more complex and specific than leadership continuum, it is also criticized by

managers because it is difficult to know which style to use when.

Path-goal leadership theory led to the development of the theory of charismatic leadership in 1976. Path-goal

theory was considerably broadened in scope, and in 1996 House referred to it as value-based leadership theory.

WORK APPLICATION 4-3

Identify your manager’s most commonly used path-goal leadership style. Would

you say this is the most appropriate leadership style based on the situational

factors? Explain.

V. NORMATIVE LEADERSHIP THEORY AND MODELS

LO 4-6. State the normative leadership model styles and the number of variables.

The five normative leadership styles are decide, consult individually, consult group, facilitate, and

delegate. The model has seven variables.

An important leadership question today is, “When should the manager take charge and when should the manager let

the group make the decision?”

In 1973, Victor Vroom and Philip Yetton published a decision-making model to answer this question while

improving decision-making effectiveness. Vroom and Arthur Jago refined the model and expanded it to four models

in 1988. (Slide 4-24)

In 2000, Victor Vroom published a revised version entitled “Leadership and the Decision-Making Process.” We

present the latest version.

The normative leadership model has a time-driven and development-driven decision tree that enables the user to

select one of five leadership styles (decide, consult individually, consult group, facilitate, and delegate) appropriate

for the situation (seven questions/variables) to maximize decisions.

It is called a normative model because it provides a sequential set of questions that are rules (norms) to follow to

determine the best leadership style for the given situation. (Slide 4-25)

A. Leadership Participation Styles (Slide 4-26)

Vroom identified five leadership styles based on the level of participation in the decision by the followers.

1. Decide

The leader makes the decision alone and announces it, or sells it, to the followers.

2. Consult Individually

The leader tells followers individually about the problem, gets information and suggestions, and then

makes the decision.

3. Consult Group

The leader holds a group meeting and tells followers the problem, gets information and suggestions, and

then makes the decision.

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4. Facilitate

The leader holds a group meeting and acts as a facilitator to define the problem and the limits within which

a decision must be made. The leader seeks participation and concurrence on the decision without pushing

his or her ideas.

5. Delegate

The leader lets the group diagnose the problem and make the decision within stated limits. The role of the

leader is to answer questions and provide encouragement and resources.

B. Model Questions to Determine the Appropriate Leadership Style (Slide 4-27)

To determine which of the five leadership styles is the most appropriate for a given situation, answer a series of

diagnostic questions based on seven variables.

The seven variables presented in Exhibit 4.8 are repeated in Exhibits 4.9 and 4.10. (Exhibit 4.9 on Slide 4-28

and exhibit 4.10 on Slide 4-29)

1. Decision Significance. How important is the decision to the success of the project or organization? Is the

decision of high (H) importance or low (L) importance to the success? When making highly important

decisions, leaders need to be involved.

2. Importance of Commitment. How important is follower commitment to implement the decision? If

acceptance of the decision is critical to effective implementation, importance is high (H). If commitment is

not important, it’s low (L). When making highly important commitment decisions that followers may not

like and may not implement, followers generally need to be involved in making the decision.

3. Leader Expertise. How much knowledge and expertise does the leader have with this specific decision? Is

expertise high (H) or low (L)? The more expertise the leader has, the less need there is for follower

participation.

4. Likelihood of Commitment. If the leader were to make the decision alone, is the certainty that the followers

would be committed to the decision high (H) or low (L)? When making decisions that followers will like

and want to implement, there is less need to involve them in the decision.

5. Group Support for Objectives. Do followers have high (H) or low (L) support for the team or

organizational goals to be attained in solving the problem? Higher levels of participation are acceptable

with high levels of support.

6. Group Expertise. How much knowledge and expertise do the individual followers have with this specific

decision? Is expertise high (H) or low (L)? The more expertise the followers have, the greater the

individual or group participation can be.

7. Team Competence. Is the ability of the individuals to work together as a team to solve the problem high (H)

or low (L)? With high team competence, more participation can be used.

C. Selecting the Time-Driven or Development-Driven Model for the Situation

The first step is actually to select one of the two models, based on whether the situation is driven by the

importance of time or development of followers. The characteristics of the decision are focus, value, and

orientation.

1. The Time-Driven Model (Included with exhibit 4.9 on Slide 4-28)

See Exhibit 4.9. Its three characteristics are:

 Focus. The model is concerned with making effective decisions with minimum cost. Time is costly, as

it takes longer for groups to make decisions than the leader alone.

 Value. Value is placed on time, and no value is placed on follower development.

 Orientation. The model has a short-term horizon.

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2. The Development-Driven Model (Included with exhibit 4.10 on Slide 4-29)

See Exhibit 4.10. Its three characteristics are:

 Focus. The model is concerned with making effective decisions with maximum development of

followers. Follower development is worth the cost.

 Value. Value is placed on follower development, and no value is placed on time.

 Orientation. The model has a long-term horizon, as development takes time.

3. Computerized Normative Model

Vroom has developed a computerized CD-ROM model that is more complex and more precise, yet easier

to use.

WORK APPLICATION 4-4

Recall a specific decision you or your boss has or had to make. Is or was the

decision time- or development-driven? Using Exhibit 4.9 or 4.10, select the

appropriate participation style for the situation. Be sure to state the questions you

answered and how (H or L) you answered each.

D. Determining the Appropriate Leadership Style (Slide 4-30)

To determine the appropriate style for a specific situation, use the best model (time-driven or development-

driven) for the situation and answer the questions, some of which may be skipped based on the model used and

prior questions.

E. Research Criticism, and Applications (Slide 4-31)

Numerous studies have tested the normative leadership model. In general, the results found in the empirical

research have supported the model. However, the model is not without its critics.

The Vroom and Vroom Yetton/Jago model tends to be popular in the academic community because it is based

on research.

However, it is not as popular with managers because they find it cumbersome to select models and to pull out

the model and follow a seven-question decision tree every time they have to make a decision.

VI. PUTTING THE BEHAVIORAL AND CONTINGENCY LEADERSHIP THEORIES

TOGETHER

LO 4-7. Discuss the major similarities and differences between the behavioral and contingency

leadership theories.

The primary similarity between these theories is that their leadership styles are all based on the same two

leadership concepts, although they have different names. The major difference is that the contingency

leadership models identify contingency variables on which to select the most appropriate behavioral

leadership style for a given situation.

LO 4-8. Compare and contrast four major differences among the four contingency leadership

models.

Using Exhibit 4.12, the first difference is in the number of leadership styles used in the four models,

which ranges from 2 (contingency) to 7 (continuum). The second difference is in the number of

contingency variables used to select the appropriate leadership style, which ranges from 2 (path-goal) to

7 (normative). The third difference is what is changed when using the model. When using the

contingency model, the leader changes the situation; with the other three models, the leader changes

behavior (leadership style). The last difference is the desired outcome. Contingency and continuum

leadership models focus on performance, and the path-goal model adds job satisfaction. The normative

model focuses on decisions.

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WORK APPLICATION 4-5

1. Identify the one contingency leadership model you prefer to use on the job,

and state why.

2. Describe the type of leader that you want to be on the job. Identify specific

behavior you plan to use a leader. You may also identify behavior you will

not use.

Exhibit 4.11(Slide 4-32) is a review of different words that are used to describe the same two leadership behavior

concepts. It includes the number of leadership styles based on the two behavior concepts and the different names

given to the leadership styles.

You should realize that all the leadership styles are based on the same two behavior concepts.

We developed Exhibits 4.11 and 4.12 (Slide 4-33) to put all these contingency leadership theories together with

behavioral leadership styles.

These exhibits should help you to better understand the similarities and differences between these theories.

A. Prescriptive and Descriptive Models (Slide 4-34)

LO 4-9. List which leadership models are prescriptive and descriptive, and explain why they are

classified as such.

The contingency and normative leadership models are prescriptive models, because they specify exactly

which leadership style to use in a given situation. The continuum and path-goal leadership models are

descriptive models, because users select the appropriate leadership style for a given situation based on

their own judgment.

The contingency leadership model and the normative leadership model are prescriptive models.

Prescriptive leadership models tell the user exactly which style to use in a given situation.

However, the continuum and path-goal leadership models are descriptive models.

Descriptive leadership models identify contingency variables and leadership styles without specifying which

style to use in a given situation. (Slide 4-34)

VII. LEADERSHIP SUBSTITUTES THEORY (Slide 4-35)

LO 4-10. Explain substitutes and neutralizers of leadership.

Substitutes for leadership include characteristics of the subordinate, task, and organization that make

leadership behavior unnecessary or redundant; neutralizers reduce or limit the effectiveness of a leader’s

behavior.

Substitutes for leadership include characteristics of the subordinate, task, and organization that replace the need

for a leader or neutralize the leader’s behavior.

A. Substitutes and Neutralizers

Substitutes for leadership make a leadership style unnecessary or redundant. Neutralizers reduce or limit the

effectiveness of a leader’s behavior.

The following variables may substitute or neutralize leadership by providing task-oriented direction and/or

people-oriented support rather than a leader:

1. Characteristics of followers. Ability, knowledge, experience, training. Need for independence. Professional

orientation. Indifference toward organizational rewards.

2. Characteristics of the task. Clarity and routine. Invariant methodology. Provision of own feedback

concerning accomplishment. Intrinsic satisfaction.

3. Characteristics of the organization. Formalization. Inflexibility. Highly specified and active advisory and

staff functions. Closely knit, cohesive work groups. Organizational rewards not within the leader’s control.

Spatial distance between leader and followers.