Situational Contingency Theory

A chief executive's management style has a direct effect on the success or failure of a company. Situational contingency theory recognizes that leadership in a board room setting uses a different skill set than leadership in the accounting department of the same company. Theorists seek to define how a successful leader alters leadership tactics to fit communications with the different levels of a company.

What is Situational Contingency Theory?

  1. Situational contingency theory is one of six main leadership theory categories that have developed since the early 20th Century, according to Larry Coutts, Ph.D. , director of research and development at Epsi Inc. Fred E. Fiedler, considered the father of the study of situational contingency in leadership, published his book "A Theory of Leadership Effectiveness" in 1967, in which he launched his new methods to define types of work situations where certain leadership styles are more appropriate than others. Situational contingency theory seeks to help company management choose leaders better suited to guide the company to success.

Fiedler's Contingency Theory of Leadership

  1. Fiedler's theory held that a person's leadership style is dependent on her personality and doesn't change, while situations do change. Dominant personality traits, according to Fiedler, are either human relations-oriented or task-oriented, so whether the leader is successful depends on the degree to which her dominant personality trait meshes with key elements of a series of given situations over time. His theory states that task-oriented leaders are more effective in extreme situations, such as those found in mergers and acquisitions work and manufacturing, while human-relations oriented leaders are more effective in middle-ground situations such as banking and retail.

Hersey-Blanchard Situational Leadership Theory

  1. In 1988, Paul Hersey and Ken Blanchard published their "Management of Organizational Behaviour," in which they asserted that leadership is skill-based and not personality-based. An effective leader matches his leadership style to the maturity level of the people he is leading at the time. Leaders use styles of telling with the lowest maturity level person or group and styles involving selling, participating and delegating with each higher maturity level.

A Valuable Tool For Small Business

  1. The success of a start-up or small business is greatly dependent on the leadership style of the founder or chief executive. Lackluster performance of a small business might mean the leader is either entirely the wrong personality for the business he is in or is simply not aware of leadership tactics such as those outlined in the Hersey-Blanchard theory, while a successful leader has a personality that meshes well with the business's traits or alters his style to mesh well with the different levels of maturity he encounters in his firm.