Skip to Content

Contingency Theory of Leadership explained by a CEO

In my leadership role as a CEO, I must use a contingency theory of leadership due to the fast-changing complex environment of today. Contingency leadership theories allow for different leadership tools for various contingencies or situations, ranging from working with a new inexperienced team, handling change, coaching when appropriate, and being more commanding when required. To be a successful leader today, you simply must use a contingency leadership theory as behavioral theories are inadequate for the job.

What is the contingency theory of leadership?

The contingency theory of leadership is a leadership theory that takes situational circumstances into account. Contingency theory stipulates that leaders should maximize their impact using situationally appropriate leadership styles and behaviors, depending on circumstances, people, environment, etc.

This article explains the contingency model of leadership, its history, examples of contingency theories, and why you should start using a contingency approach in your leadership. Toward the end, I provide a few examples of how I use a contingency leadership approach in my job as a CEO.

Contingency Theory of Leadership: Background, History, Evolution

The phenomenon of leadership has been studied in different scientific directions and by many researchers. Various leadership theories have appeared and developed further over time. As a result, we have numerous definitions and groups of theories on how to lead, such as contingency theory, behavioral theory, trait theory, to name a few. All these theories bring something to the table and enable you to understand leadership better or from another perspective.

In the 1960s, some researchers realized that the earlier trait theory of leadership and the ensuing behavioral leadership theory were insufficient. Leadership models simply had to consider the situational aspects, including the team members involved and the organization’s state. Adding situational and contingency elements increased the complexity substantially, and previous approaches to leadership could not completely keep up. This new approach to leadership, which is the contingency theory of leadership, or situational leadership theories, opened for several new and more advanced leadership models.

The advocates of the contingency theory of leadership believe that a person can be a good leader in one situation and fail in another. The best type of leadership depends on the environmental situation that arises in the context of a particular action or behavior [1]. In other words, the contingency leadership theory includes the situational prerequisites and effects when studying leadership success or failure. To be a good leader, you should be self-aware, objective, and adaptable and use the leadership style each situation requires. After all, a leader’s personality, behaviors, and skills should be used differently depending on the situation, the involved people, and many other factors. An obvious example is how a police officer leads the apprehension of an armed criminal differently than when comforting a lost child found in the subway. Of course you act differently depending on the situation you are experiencing. Everybody does that to a degree. One way of achieving this effect as a leader is to use different leadership styles that are meant for different situations, i.e., a leadership styles toolbox.

Which are the contingency leadership theories?

The contingency theories of leadership are Fiedler’s Contingency Model, Situational Leadership Model, Path-Goal theory, Vroom-Yetton Contingency Model, multiple-linkage model, the six leadership styles by Goleman, to name some of the most famous ones.

Free E-Book! 27 Leadership Styles explained in 60 pages: Free e-book offer!

Fred Fiedler introduced what now is referred to as Fiedler’s Contingency Theory in the mid-sixties, and this was one of the first situational leadership models[2]. Fred Fiedler was an Austrian-born American psychologist that headed organizational research at the University of Washington for more than two decades before leaving in 1992. Fiedler combined several previous studies’ results and came up with a formula known as Fiedler’s Situation Leadership Model or Fiedler’s Contingency Theory of Leadership.

Fiedler's Contingency Model Chart
The graphical chart showing Fiedler’s Contingency Model.

According to Fiedler, a leader’s contribution to performance depends on leadership behavior and the level of compliance with each situation’s circumstances. The novelty with this was that Fiedler stated that a leader could be effective in one situation and not in another. A good leader is not necessarily successful when heading all types of organizations in all situations. To cover this aspect, Fiedler included numerous leader-situation combinations that can guide leaders on how to act. (This paragraph is an extract from our Fiedler’s Contingency Theory of Leadership Article.) This new approach attracted scholars who wanted to explore leadership from this new and different angle.

After Fiedler’s theory, Path-Goal Theory by House, based on path-goal ideas proposed by Vroom and Gerogropolous, emerged. House submitted his Path-Goal Theory in 1971 but revised it 25 years later in 1996. This theory takes a big step further from the Fiedler model and assumes that leaders can and should adapt to different situations. There are two major assumptions in the Path-Goal theory:

  1. Leadership behaviors are acceptable as long as they contribute to the satisfaction of the followers, either short-term or long-term
  2. Leadership behaviors are motivated if they provide support, guidance, coaching, and other aspects to the followers as needed to drive performance and create the right atmosphere

Path-Goal focuses on leadership styles depending on the situation and the leader’s behavior while the above assumptions reaming accurate. You will start to recognize some more well-known leadership styles at this point since the four styles or behaviors that House used in his theory are directive, supportive, participative, and achievement-oriented, which you might recognize.

In 1982, Dr. Paul Hersey and Dr. Ken Blanchard published their book “Management of Organizational Behaviour: Utilizing Human Resources”. They probably didn’t realize that this book would help them become world-renowned leadership experts. The central theme of their message was a new approach to leadership, one based on relationship-building and leadership adjustment. This new approach was dubbed the Situational Leadership Model and is often thought to be the leadership model that is perfect for every situation. A Situational leader works assiduously to create meaningful connections with team members. Ultimately, the team receives leadership with the necessary leadership style to fit the organization’s current situation. The Situational Leadership Model is a contingency theory approach to leadership where a leader uses one out of four leadership styles depending on group readiness, competency, experience, and commitment. A situational leader can use telling, selling, participating, and delegating leadership styles. You can read more about this interesting contingency theory in our Situational Leadership Model article.

Situational Leadership Model
The Situational Leadership Model Chart

The contingency theory of leadership kept developing through the 1970s and 1980s, but gradually lost some of its popularity after the 1990s, when researchers began developing interest in other types of leadership theories, slightly gravitating away from the contingency approach. In the early 2000s, this shift resulted in leadership theories such as Ethical Leadership / Moral Leadership and Servant leadership theory. The 2000s also saw Daniel Goleman’s six leadership styles based on Emotional Intelligence, which also has a strong situational approach, although not as concretely and clearly defined with examples situations as earlier contingency theories of leadership.

Situational leadership and contingency theory of leadership are very much in use today, especially regarding the radical and sudden change we have seen during the last couple of years with a global pandemic, supply chain imbalances, work from home, etc. These events underline the need for situational awareness, adaptive leadership, and flexible use of leadership styles [3].

Here are six different contingency models of leadership [4].

  1. Fiedler’s model says there are three important factors for “situational favorableness”: leader-member relations, task structure, and leader’s position power.
  2. The situational leadership model (aka Hersey-Blanchard model) thinks leaders should determine which leadership style would be more effective for a particular team and situation. For this, leaders ought to choose from four leadership styles – Delegating style, Participating style, Selling style, and Telling style.
  3. The Path-Goal Theory of Leadership states that leaders should be extremely flexible in selecting a concrete style to help team members reach their individually set goals. When saying leadership styles, the model mentions The Directive Clarifying Leader, The Achievement-Oriented Leader, The Participative Leader, and The Supportive Leader.
  4. The Decision-Making model (aka the Vroom-Yetton contingency model) proves that decision-making is the most important factor affecting the relationship between the leader and the team members. So the formers should build and maintain the relationship. In this model, there are five leadership styles, including Autocratic (A1), Autocratic (A2), Consultative (C1), Consultative (C2), and Collaborative (G2).
  5. The Multiple-Linkage Model (developed by Gary Yukl in 1981) says that it is impossible to assess factors of a leader’s behavior on group performance separately. It is complex, consisting of Managerial behaviors, Intervening, Criterion, and Situational variables. Leaders will influence these factors in several ways, and it is related to the situation. 
  6. Cognitive Resource Theory is considered to be the reevaluation of the Fred Fiedler contingency model. It considers three main factors, such as personality, the degree of situational stress, and group-leader relations.

All these models might seem substantially different, but they are all leadership contingency theories. So there is a noticeable red line seen in all models – effective leadership is contingent on the situation, task, and people involved. The leader should adopt the leadership style that results in maximum effectiveness.

How is Contingency Theory used in Leadership?

Leadership effectiveness and outcomes correlate with various factors such as the scope of a project, organization, or endeavor, type and structure of the team, deadlines, tasks specifications, etc. All leaders will organize the management of these factors with some sort of personal judgment and touch. Hopefully, every leader purposely selects one or a few leadership styles based on these factors and switches when the circumstances have changed enough to justify another leadership style. In this sense, contingency theorists believe that every situation is challenging. No matter how many times a leader succeeds, no personal skill or experience would guarantee success every time, unless the leader can act differently and appropriately. Proper analysis and situational assessment, resulting in a selected leadership style approach, combined with personal skills and behaviors, simply increase the likelihood of success, making contingency theory crucial to any modern leader.

There could be situations that no leadership style a leader is familiar and skilled at will fit situations. In those situations, the leader should consider using other talented people more suitable for the situation. I will give you a personal example. As a CEO, I have a VP in my team that possesses excellent presentation skills and industry knowledge. Although I am a decent presenter, certain topics suit this VP better, rendering a stronger impact if he holds the presentation. Hence, I try to inject him on such occasions to maximize the impact of our scheduled presentations. A more complex situation is when I switched places on two VPs with different leadership approaches depending on the situational readiness in two other parts of the company. One area had been led by a very relationship-oriented VP for some time and needed more systems and structure, which the replacement could put in place. The other area had a very new team and needed strong people skills to build team commitment and recruit new members, a perfect fit for the relationship-oriented VP.

Generally, a myriad of factors affects the effectiveness of leadership and impact on the team and organization. When talking about the team, those factors might be the maturity level of the employees, relationships between coworkers, various working styles of employees, team morale, etc. (The Situational Leadership Model does a great job at providing structure on team readiness.) Another group of factors might include the work pace, deadlines, clearly set goals or outcomes, etc. Lastly, a company’s management style and policy might play a crucial role in leadership effectiveness.

Perhaps it sounds like selecting which leadership style to use is a time-consuming and challenging task, but that is hardly the case. Once you have gotten used to various leadership styles for different types of situations and gained enough experience, the shift can become natural and fluid. I have done this for years, and you can do it too. You might not always use the most optimum leadership style, but you will for sure do a better job by adapting than by using the same constant behaviors regardless of what is going on around you.

Contingency Theory of Leadership Advantages and Disadvantages

All theories have limitations, and these are some of the advantages and disadvantages of the contingency theory of leadership.

Pros of Leadership Contingency Theory

The Contingency theory of leadership has the following advantages:

  • Contingency theory shifted leadership research from traits and behaviors to also include situational and team aspects.
  • Lots of empirical research supports the contingency theory of leadership. The situation truly matters, and a behavior-only model is inadequate.
  • Contingency theory underlines that there is no single ideal leadership style. This pushes leaders to be more adaptive and flexible by using multiple leadership styles, taking the situation and team members, etc., into account.
  • The adaptive mindset of contingency theory helps underline the importance of leaders keeping up with changes in operational and strategic environments and requirements, such as market shifts, trade flows, technological disruption, competition, etc.

Cons of Leadership Contingency Theory

The Contingency theory of leadership has the following disadvantages:

  • Contingency theory does not provide detailed guidance for every possible situation – but again, no leadership theory does, and contingency theory probably comes the closest.
  • The contingency models are more difficult to explain and understand due to their increased complexity, and learning them takes longer.
  • All applications of contingency leadership theory involve large amounts of subjective judgment when assessing situational criteria, making it particularly difficult for leaders with little experience or low emotional intelligence.

Contingency Theory of Leadership Example Situations

Let me provide you with a few concrete, practical examples of how to approach contingency theory as a leader. This chapter involves a few examples where I have used a contingency leadership approach in my job as a CEO. You can also read multiple contingency theory situation examples in our article on Fiedler’s contingency model if you are interested.

Most leadership styles are available in several contingency models of leadership under different names. Since I mostly use the six leadership styles by Goleman, I will use those in this chapter.

Contingency theory example: Commanding leadership

When immediate compliance is required or consequences are dire, the commanding leadership style can be appropriate. However, you should try to achieve the same with alternative leadership styles if possible.

A commanding leader makes all the decisions and gives orders to his or her team. Tight control and follow-up combined with high clarity in rules, roles, and expectations are key elements of Commanding leadership. This style can be efficient in low-skilled teams and when decisions must be made very quickly. This style can lead to micromanagement, which is detrimental to employee engagement, especially in highly skilled teams in complex environments. (From our article on Commanding Leadership. You can find it in our leadership styles portal or in the article about the six leadership styles by Daniel Goleman.)

I use the commanding leadership style for specific non-negotiable requirements, even if it is not my first and primary approach. We have certain ethical rules in the company where I work that we never can breach. Although I use affiliative, democratic, and visionary leadership to explain why we have those rules, how it helps the team, and discuss the consequences with people, I will not hesitate to use the commanding style if required. As a result, it is perfectly clear to all my subordinates that I will not accept any breaches of these ethical rules. I have clearly, and with emphasis, explained that such actions will not be tolerated.

I have also used commanding leadership in safety situations when I have come across unsafe conditions in factories within my control span. Do note that I gave the local managers who were with me a minute to react, but when no reaction came, I stepped in. I immediately ordered the hazardous activity to stop. I instructed the local head to get the safety representative and the Health and Safety Manager to come to the scene at once, and everyone else had to stand down and wait. Once they were all there, I outlined the severity of the situation and my disappointment in them allowing it in the first place. I told them to seize any such activities at once and find alternate ways of getting the job done.

You can read more about commanding leadership and the other styles mentioned in this example in our leadership styles portal or in the article about the six leadership styles by Daniel Goleman.

Contingency theory example: Affiliative and Democratic leadership

If a team member has a stress breakdown or a difficult personal situation, commanding them rarely helps, and I always use the affiliative leadership style as a first resort.

The Affiliative Leadership Style is another style among the six leadership styles by Goleman. Affiliative leadership is completely focused on the people and relationships in an organization. The leader’s primary task is to ensure harmony and friendship in the workplace. This leads to happy employees but can at the same time lead to poor performance.

Free E-Book! 27 Leadership Styles explained in 60 pages: Free e-book offer!

Inevitably, team members will go through difficult times. On those occasions, I try to empathize, understand, and truly listen to them. Once I know the situation, we discuss how the team and I can help the team member. Note that this is not necessarily relieving the cause of the problem but perhaps helping out with some symptoms. It is not my job to be a marriage counselor, for example, but it is my job to shuffle tasks and resources around temporarily to provide an environment for team members to act effectively if they are experiencing personal problems such as relationship concerns. Typically, I try to involve other team members and discuss how we can temporarily assist the troubled individual. This could involve absorbing some of the workload, delaying some deadlines, and doing similar things to give the team member some breathing space, making this an affiliative and democratic leadership exercise. Such an arrangement must be temporary since you cannot tolerate people underperforming due to personal issues in the long term. When this is done correctly and successfully, the affiliative approach delivers several good results: the troubled team member gets the required help, and the other team members realize that they too would be helped in case they run into trouble. This emphasizes team bonding, empathy, trust, and camaraderie. If done right, that is.

You can read more about affiliative and democratic leadership in their detailed articles available in our leadership styles portal or in the article about the six leadership styles by Daniel Goleman.

Contingency theory example: Visionary leadership

I use the visionary leadership style to provide people with purpose and underline inclusion and transparency.

Visionary Leadership is when a leader inspires others to pursue through the use of a long-term vision. The Visionary Leadership style builds on participation, communication, and goal setting. A visionary leader risks tunnel vision and losing short-term focus since all efforts are focused on the long-term results.

I communicate regularly and thoroughly via town hall meetings, written updates, cascaded information, etc., so people understand the big picture, how it fits with short-term events, and where the entire organization is heading. If people understand the problems that other departments have, they will feel included, cooperate better, and be able to provide creative solutions in a much better way than if they remain uninformed. If I need to use the pacesetting leadership style temporarily, I always add visionary elements providing people with an understanding of why the pacesetting is needed, and how it connects to our common, long-term vision, that we all work to achieve.

Compare the motivation levels if someone feels they are packing boxes, or if they understand that the medical equipment they pack will help to save lives for instance. You can read more about visionary and pacesetting leadership in their detailed articles available in our leadership styles portal or in the article about the six leadership styles by Daniel Goleman.

Summary on the Contingency theory of leadership

Now that you have read this article, I hope you understand and embrace the fact that any leadership activities depend on the situation the leader and the stakeholders are in. There are multiple theories available as leadership toolboxes, where the situational leadership model and the Goleman leadership styles are some of the more modern ones.

I have heard leaders explaining their behaviors with different versions of: “This is who I am, deal with it”. This will not lead to the best outcome. I advise you to become the leader that others need you to be for them to maximize their performance, and not have others adapt to your personality. As contingency theory proves, your personality as a leader might work in some situations, but it definitely will not in all situations.

Recommended reading

I suggest you read the following articles here at leadershipahoy.com to learn more about contingency leadership models as well as some other theoretical leadership approaches.

Contingency theories:

Other leadership theories:

References

[1] Sudhir K. Saha, Contingency Theories of Leadership: A Study, 1979 https://www.researchgate.net/publication/240276122_Contingency_Theories_of_Leadership_A_Study
[2] Fiedler,  F.  E.  (1964).  A  Contingency  Model of  Leadership  Effectiveness.  Advances in Experimental    Social    Psychology,    1(C),    149–190.    https://doi.org/10.1016/S0065-2601(08)60051-9
[3] https://journal.iapa.or.id/proceedings/article/view/423/250
[4] “A Handbook of Leadership Styles”, Demirtas and Karaca, Cambridge Scholars Publishing


Click the image above or HERE to join our Newsletter and get the Free E-book now!