Contingency Management Theory

Contingency Theory is a unique approach to leadership

The basic premise of Contingency Theory is that there is no one best way to lead an organization. There are too many external and internal constraints that will alter what really is the best way to lead is in a given situation. In other words, it all depends upon the situation at hand as to what will be the best course of action.

Fred Fiedler is a theorist whose Contingency Trait Theory was the precursor to his Contingency Management Theory. Fiedler believed there was a direct correlation to the traits of a leader and the effectiveness of a leader. According to Fiedler, certain leadership traits helped in a certain crisis and so the leadership would need to change given the new set of circumstances. Fiedler's Contingency Theory proposes the following concepts:

1. Fiedler's Contingency Theory says there is no one best way to manage an organization.

2. Fiedler's Contingency Theory of leadership says that a leader must be able to identify which management style will help. achieve the organization's goals in a particular situation

3. The main component of Fiedler's Contingency Theory is the least preferred co-worker (LPC) scale which measures a manager's leadership orientation.

Classify your organization by the 3 variables in Fiedler's Contingency Theory

The 3 variables to consider are: how well the employees accept the leader; the extent that the employees jobs are described in detail; and the authority your leader possesses through his/her position in your organization. Contingency theories state that leaders will be able to exert more influence if they are able to have good relationships with the employees. In addition, contingency theory management maintains that in organizations where the tasks are spelled out in detail, the leader has more influence over the employees than in those organizations that do not have structured tasks.

Understand the internal and external factors contained in Fiedler's Contingency Theory

Fiedler's Contingency Theory says that there are many internal and external factors that can influence the optimum organizational structure. These factors include the size of the organization, technology that is in use, leadership style, and how the organization can adapt to changes in strategy.

Evaluate your managers with Fiedler's Contingency Theory measurement tool

Fiedler devised a least preferred co-worker (LPC) scale that can be used to measure whether your managers are task-oriented or relationship- oriented. The test is given to each manager and they simply rate a co-worker that they enjoyed working with the least, either in the past or in their current position. The manager rates that co-worker and chooses between 18 to 25 sets of adjectives on an 8 point scale between each set of values.
  • Spending some time each day getting to know your subordinates helps strengthen your position in a Contingency Theory of Leadership model because you will be able to exert more influence on the employees.