Fiedler's Contingency Theory

Proposed by the Austrian psychologist Fred Edward Fiedler (1922- ). The contingency model emphasizes the importance of both the leader's personality and the situation in which that leader operates. A leader is the individual who is given the task of directing and coordinating task-relevant activities, or the one who carries the responsibility for performing these functions when there is no appointed leader. Fiedler relates the effectiveness of the leader to aspects of the group situation. Fred Fiedler's Contingency Model also predicts that the effectiveness of the leader will depend on both the characteristics of the leader and the favourableness of the situation.

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When business management students first learn about Fiedler's Contingency Theory, they generally think of the more readily used form of the word "contingency". Essentially, they think that a contingency is an something which is dependent upon or caused by some other event. Groups of people, leadership, or relationships seldom come to mind. And yet, as its very root, the base-word contingent means a group of people in contact with each other, with connection or dependence among the followers and their leader. In the late 1950s and early 1960s, industrial and business psychologists such as Fiedler and Woodward started to study the leadership and behavior styles of managers. Before Fiedler's study, industrial psychologists focused on the personal traits of successful leaders and believed in an ideal science of organization. They felt there was a best way to run a company or group which produced the best decisions and most effective business practices. The importance of Fiedler's contingency theory is that it has influenced almost all modern management theories by denying the existence of a singular ideal organizational approach. The basis of Fiedler's contingency model involved assessing a potential leader with a scale of work style ranging from task-oriented at one end, to relationship-oriented at the other. Then contingent on factors such as stress level in the organization, type of work, flexibility of the group to change, and use of technology, a customized coordination of resources, people, tasks and the correct style of management could be implemented. Leadership as a wide spectrum of possible effective styles was a groundbreaking idea. It is still central in modern management theories which reject rigid assumptions about ideal management.

The key to leadership effectiveness is viewed by most variants of Contingency Theory as choosing the correct style of leader. This style is dependent on the interaction of internal and external factors with the organization. For example, the ability to leaders is dependent upon the perception of subordinates of and by the leader, the leader's relationship with them, and the degree of consensus on the scope of a given task. Situational contingency theory agreed with Contingency theories on the basic idea of there being no single correct solution to organization. This and other similarities led to its main tenets merging into mainstream Contingency Theories. Situational contingency theorists such as Aldorry, Tooth, Vroom and Jajo held that group effectiveness requires a match between a leader's style and situational demands. Similarly, the concept which Fiedler names "situational control" is the means by which a leader can effectively influence the group's actions and behavior. Fiedler's theory further posits that most situations will have three hierarchical aspects that will structure the leader's role. The first aspect is atmosphere - the confidence, and loyalty a group feels towards the leader. The second variable is the ambiguity or clarity of the structure of the group's task. Lastly the inherent authority or power of the leader plays an important role in group performance. Normative Decision Theory, sometimes called Game Theory, attempts to model the process leading to an optimal business decision. Normative decision making rarely happens in the real world, where perfect rationality does not match actual behavior. The more descriptive approach of how people actually make decisions is known as Decision Analysis. Theorists study the cooperation of workers with leaders, and among each other, and how closely the final decision correlates with a normative or optimal decision. In summary, modern business and industrial management are indebted, and in fact, based upon, Fiedler's pioneering work on Contingency Theory for their theoretical core of flexibility and adaptation.