Contingency Theory of Leadership: Can You Really Use It in Business?

An organization or a department is only as good as its leader. Deciding on the right leadership style can be the difference between real success and failure. Contingency Theory of Leadership explores the complexities of leadership in different situations. This is based on scores that identify:

  • The situation in which a leader is placed;
  • That leader’s disposition toward the workers.

It is used to put teams in place who will most effectively work together to complete tasks. Contingency Theory is still widely visible in large and small businesses and it can help you in your business.

contingency theory of leadership

What Is Contingency Theory?

Contingency Theory of Leadership says that effective leadership depends on the situation at hand. The situation is defined by three different factors including the following:

  • Relations between the leader and the followers;
  • Defined tasks with clear goals and vetted procedures;
  • The leader’s authority to punish and reward.

Once the situation is clear, Contingency Theory prescribes the proper personality of the leader. You can determine the leader personality by quizzing the prospective leader on the traits of their Least Preferred Coworker or LPC. Traits are ranked on a scale and the total score earned by the leader determines whether the leader is task oriented or relationship oriented.

  • Task-oriented leaders excel in conditions where tasks are sharply defined.
  • Relations-oriented leaders excel in conditions. This is where the three factors of the situation fall in the middle of the spectrum, meaning the conditions are more fluid.

Who Uses Contingency Theory

Many companies use the Contingency Theory of Leadership in the United States. Contingency Theory is used by the upper echelon of management to empower middle management to adjust their conditions to enable success.

Consider it is your job to replace a long-tenured, well-respected manager for a project that is well-structured. This means that the task and the processes are well defined. This is a leader with poor relations with the employees because she is new and has not yet earned the trust of the workers. In this situation, a leader who scored high on the LPC Scale is ideal. A high score on the LPC Scale means that the manager views her Least Preferred Coworker more favorably and will work to build stronger relations with that worker.

In another example, consider it is your job to replace a manager overseeing a highly-creative project. The relations between the leader and the followers are poor because the leader is new. The task is creative and unstructured. In this case, the situation calls for a leader with a low LPC score. This leader is more task-focused and will achieve goals without as much consideration for personal relations.

How Can Contingency Theory Help in Your Job?

  • Keeping clients happy and projects on time is a universal challenge. Using the Contingency Theory of Leadership to inform your management choices can determine the success or failure of a project. Placing the manager with the right disposition in the right position is key and considering the factors of the Contingency Theory can better inform your management choices. One thing to consider is the amount of power a leader has over his subordinates.
  • Some leaders are responsible with managing a project and don’t have authority over the workers. In this scenario, the leader is in a weak position of power, which can damage his ability to get the necessary production from the workers. A leader in a weak position of power like this can excel with a low LPC score (relations oriented) if the task is unstructured. A leader with a high LPC score (task oriented) can excel as long as the task is structured.
  • On the other hand, when a leader has the power to dole out rewards and punishments, the formula for success changes. A leader with a strong position of power and a low LPC score (relations oriented) can achieve goals as long as his relationships with the workers are good. A leader with a strong position of power and a high LPC score (task oriented) can excel when his relationships are poor.
  • Knowing your leader and the conditions surrounding your leader can allow you to make good leadership choices. These will lead to successful completion of a task.

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5 Steps to Apply the Contingency Theory of Leadership

1. Identify Your Situation by Reviewing the Three Factors of a Situation

  • Is the situation between the leader and the workers strong?
  • Is there trust between them or does trust still need to be earned?
  • Are the tasks structured or unstructured?
  • Does the leader hold a position of power?

2. Identify Leadership Style Using the LPC Scale

Managers must know themselves and how their dispositions can affect worker productivity. When assigning managers new tasks, evaluating the personality of the manager and placing him in a situation that is favorable to his personality is key to the success of the project.

3. Spend Time Each Day Getting to Know Your Subordinates

Getting to know your subordinates strengthens your position. It also allows you to have more influence over your employees.

4. Recognize That Personality Is Relatively Stable

The best way to allow your leader to be successful is to adjust the situation to fit his or her needs according to the Contingency Theory model.

5. Consider the Followers

A leader who excelled in one job cannot necessarily be placed in a new situation and expected to succeed.

If the culture of the subordinates is drastically different, the leader may not find success the same as before.

To Practice

Contingency Theory of Leadership can help your business be successful and achieve tasks. Evaluating the variables of a situation and defining the personality of the leader are first steps to set up a leader and a project for success. Making decisions based on the information gleaned from this process will lead to stronger task completion.

How have leadership choices affected project completion in your business? Let us know about your experience in the comments section.

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