1

Contingency Theories of Effective Leadership Chapter 8 Focus of Chapter. This chapter deals with how leader traits or behaviors are related to leadership effectiveness in different situations. Specifically, research has shown that aspects of the situation may either enhance or weaken the effects of a leader's traits and behaviors. These aspects of the situation that have this effect (enhancing or weakening the impact of leadership traits and behaviors) are called moderators. They are called moderators because they "moderate" (change) the strength of the relationship between leadership traits/behaviors and leadership effectiveness measures. Contingency Theories. Theories that explain leadership effectiveness in terms of situational moderators are called "contingency theories" of leadership. Contingency implies "it depends". That is, the size of the relationship between leadership traits/behaviors and effectiveness outcomes depends (or is contingent upon) aspects of the situation the leader is in. This chapter reviews five contingency theories of leadership: path-goal theory, leader substitutes theory, the multiple linkage model, LPC contingency theory and cognitive resource theory. In the end, the theme of this chapter is that the effects of leader characteristics (traits and behaviors) on outcome measures of effectiveness will either be strengthened or weakened by aspects of the situation. This means, not all traits and behavior we associate with leadership are effective in all situations. Some situations call for different approaches and styles than do other situations. You should be able to provide examples of this. LPC Contingency Model. LPC stands for "least preferred coworker". The idea behind this theory is that knowing how someone feels about their least preferred coworker will tell us something about the how that person is likely to relate to others (his/her approach to relationships). A high LPC score suggests a person who is quite lenient (easy going, not strict) toward others, whereas a low LPC score suggests someone who is critical (and strict) toward others. LPC theory suggests that knowing how someone approaches relationships with others will provide information on their leadership style. For example, a high LPC leader is described as wanting close interpersonal relationships with others, considerate and supportive (where task objectives are of secondary importance to maintaining supportive interpersonal relationships). A low LPC leader is described as wanting to achieve tasks, and considers maintaining supportive interpersonal relationships as secondary (less important). The research over the past 25 years suggests that the primary distinction between high and low LPC leaders, however, is that high LPC leaders value interpersonal success, whereas low LPC leaders value task achievements. Situational Variables. Fred Fiedler, the person who came up with the LPC Contingency Theory, said that the relationship between LPC score and effectiveness as a leader depends on the situation in which the leader finds him/her-self. Some situations, says Fiedler, make it easier for leaders to control things than do other situations. Situations that provide more direct control for the leader are called

2
"favorable situations", and situations that provide for less control are referred to as "unfavorable situations". Fielder says that there are three key aspects of the situation that determine how much control the leader has. 1. leader-member relations: the extent to which the leader has the support and loyalty of subordinates, and whether the relations with subordinates are friendly and cooperative. 2. position power: the extent to which the leader has authority to evaluate subordinate performance and give rewards and punishments 3. task structure: the extent to which there are clear, standardized procedures to accomplish the task; detailed descriptions of the finished product or service, and objective measures of how well the task is being performed (high structured jobs). Leaders will come into situations that differ with respect to these three aspects. How the situation is described on these three aspects determines how much "control" the leader has in that particular situation (the "favorability" of the situation). Propositions. The theory says that the most favorable situation for the leader (the situation which is easiest for the leader to have control and influence) is the one in which: relations with subordinates are good, the leader has much position power (formal authority), and the task/job is highly structured. The situation that is least favorable (in terms of providing for leadership control and influence) is one in which leader-member relations are poor, the task is highly unstructured, and position power of the leader (formal authority) is low. The theory predicts that when the situation is either very favorable or very unfavorable, low LPC leaders (task oriented) will be more effective than high LPC leaders (relationship oriented). When the situation is neither high nor low in "favorability", the theory predicts that high LPC leaders (relationship oriented) will be more effective than low LPC leaders (task oriented). Research on Theory. Support for this theory is weak, particularly considering research that has been done in actual organizations. Conceptual Weaknesses. This theory has been criticized because it does not tell us specifically (in behavioral terms) what the leader needs to do to become more effective. It is therefore not helpful in terms of providing recommendations and training on how to become a more effective leader. Overall, there is no longer much interest in this theory. To be fair to Fiedler, and his contingency theory, however, LPC theory was one of the earliest contingency theories to be offered, and has served to encourage the development of other contingency theories of leadership. Path-Goal Theory of Leadership This theory attempted to explain how the behavior of a leader influences the satisfaction and performance of subordinates. Basically, the theory says that leaders lead their people to higher levels of performance by: (a) rewarding their employees for achieving set work goals and; (b) by clarifying for their workers how to achieve these goals, while at the same time making it easier for the workers to achieve the goals (e.g. by providing necessary resources, including tools, skills, technology, information etc.). Ideally, while leading in this way, leaders also increase the job satisfaction of their workers. Workers should see that the way they behave to achieve goals, and obtain their goals, provides them with satisfaction. The workers behavior and their performance successes should bring them satisfaction. Leaders should

3
clarify the behaviors leading to successful goal attainment, as well as provide the resources that enable their workers to perform these behaviors. Explanatory Process. Well, path-goal theory is based on expectancy theory. You should recall expectancy theory (V.I.E. theory) from MGTO 121 (yes?). Expectancy theory says that you will be highly motivated to achieve a particular goal if: (a) you believe that you will receive something you value for achieving that goal; and (b) you believe that if you put out a good effort you are capable of achieving the goal (e.g. you have the ability and resources required, and you know what you need to do in order to achieve the goal). According to path-goal theory, the role of the leader is to create and strengthen these beliefs among their workers. Leader Behaviors. According to path-goal theory, there are four things that leaders can do to create and sustain the beliefs (noted above) in their workers, which in turn, will motivate their workers to achieve desired work goals. 1. Provide supportive leadership. Give consideration to needs of subordinates; display concern for their welfare; create a friendly work climate 2. Provide directive leadership. Clarify for workers what they are expected to do; make goals clear, as well as show employees how to achieve these goals; give specific guidance; provide rules and procedures; schedule and coordinate work activities. 3. Practice participative leadership. Consult with subordinates and take their opinions and suggestions into account. 4. Practice achievement oriented leadership. Set challenging goals; insist on performance improvements; emphasize excellence; show confidence in employees' ability to attain high standards. Situational Variables. As path-goal theory is a "contingency theory" of leadership, it predicts that the effect of leader behavior on subordinate satisfaction and effort depends on aspects of the situation. Aspects of the situation will influence employee preferences for particular leader behaviors, and therefore will influence the effectiveness of different leader behaviors. Major Propositions. Path goal-theory says that when the task/job is stressful, boring, or dangerous, supportive leadership is most effective. Supportive leadership increases subordinate effort and satisfaction by increasing self confidence, lowering anxiety, and lowering unpleasant aspects of the work. In being supportive, the leader increases the enjoyment of doing the task, and in increasing employee confidence, also increases the employee's expectancy that he/she will achieve the desired goal if appropriate levels of effort are given. On the other hand, the theory says that if the task/job is interesting and enjoyable, then supportive leadership will be less effective in motivating employees to achieve desired goals (will have no effect). Path-goal theory introduces other aspects of the situation that influences (moderates) the effectiveness of leader behaviors. If the task is unstructured and complex, the subordinates are inexperienced, and there is little formalization of rules and procedures to guide the work, then directive (task oriented) leadership will result in higher worker satisfaction and effort. Not knowing how to do a task/job because it is not well defined, complex, with few rules and procedures, and having little experience, creates "role ambiguity" (what they are to do, and how to they are to do it, is "ambiguous" or unclear). As a result, they will have a low expectancy of success, even if they are prepared to put out much effort. By decreasing this ambiguity (through providing directive leadership), the leader increases employee expectancy ("I can achieve this task because I now know how

4
to"), and therefore increases employee satisfaction and effort. Your book shows you different things a leader can do as a directive leader, to increase worker performance (see Figure 8, pg. 215). These include reducing role ambiguity, increasing size of the rewards associated with achieving goals, and strengthening the link/association between the desired behaviors and the rewards given (e.g. by providing rewards sooner). Research on Path-Goal Theory. Research support for this theory is weak (mixed). Most studies actually find that supportive (relationship oriented) leadership is positively related to employee satisfaction in almost all situations. However, due to problems with the research that has been done on this theory, it has not been adequately tested. More research is needed before we know whether the propositions (predictions) of the theory are "correct" or not. Conceptual Weaknesses. Path goal-theory has been criticized for relying too much on expectancy theory. Expectancy theory attempts to explain motivation primarily in terms of cognitive (rational) processes, and does not give any attention to emotional factors (does not consider emotional bonds or affection between leader and follower, and the influence of such emotions on employee behavior and performance). Also, ambiguous (unstructured) and complex jobs do not always create ambiguity, stress or anxiety among employees, requiring directive (task oriented) leadership. For example, highly trained, professionals (research scientists) may not require (nor welcome) directive leadership. Clearly, there are limitations to the path-goal theory of leadership. Summary. Path-goal theory, like LPC theory, is one of the early contingency theories of leadership. It has weak and mixed support, but provides helpful insights for developing better theories. Leadership Substitutes Theory This theory says that there are aspects of the situation that can reduce the importance of leadership. It sorts these aspects into two categories: (1) substitutes (an aspect of the situation that leads employees to behave in the same way that a leader would get them to behave and; (2) neutralizers (a neutralizer is something that lessens the effect of something else). If substitutes for leadership work, then leaders would not be required. Can situations be designed in such a way that leaders are not needed, so that the situation gets employees to do what leaders would normally get them to do? Aspects of the situation that may substitute for leadership include any characteristic of the subordinate, task or organization that ensures employees understand their roles, know how to do the work, motivate employees, and provide for job satisfaction. Neutralizes are any aspects of the task or organization that prevents the leader from acting in certain ways. If a leader cannot act in the way he/she wishes to, then this limits (neutralizes) his/her influence. For example, if a leader has no formal authority (or resources) to reward effective performance, this limits his/her ability to influence employees. It could be argued that Beijing's influence over the Chief Executive of Hong Kong (Tung Chee-wha) limits (neutralizes) the influence he might otherwise have over the Hong Kong public. Leadership substitutes theory focuses on aspects of the situation that provide task guidance and incentives (two things normally provided by a leader). Your textbook lists (Table 8-2; p. 217) a number of leadership substitutes and neutralizers (subordinate, task and organization based). For example, a cohesive work group could be a substitute for supportive leadership (e.g. support being provided by one's work group), whereas (inflexible) rules and policies preventing a leader from doing what he/she wants to do

5
"neutralizes" (lessens) the impact he/she might otherwise have in changing the way the work is performed for purposes of increasing efficiencies and effectiveness. Aspects of the situation that can either substitute for leadership, or neutralize leadership efforts, can come from: (a) subordinate characteristics; (b) task characteristics; or (c) group and organization characteristics. Subordinate Characteristics. When subordinates have much experience or training, little direction is required because they already have the skills and knowledge about what to do and how to do it. This would include medical doctors, airline pilots, accountants, electricians, university professors, and many other professionals. Not only do they not require much direction, but often they don't want the direction. Also, mostly professionals are already highly motivated (internally) by their values, needs and ethics. They do not need to be encouraged by their leader to do a high quality job. Task Characteristics. A substitute for instrumental (task oriented) leadership is a simple, repetitive job. Workers can quickly learn how to do this work without much training and direction by the leader. When the task provides automatic feedback on how well the work is performed, the leader does not need to provide much feedback. Also, if the task is interesting and enjoyable, workers are likely to be sufficiently motivated by the work itself, without need for the leader to encourage and inspire them. Likewise, a task that is intrinsically motivating (interesting, enjoyable) may be a substitute for supportive (relations oriented) leadership, as it provides for its own satisfaction. Group and Organization Characteristics. In organizations with detailed written rules, regulations and policies, little direction is necessary. These rules and policies serve as a "neutralizer" as well as a "substitute" if they are inflexible. Also, supportive (relations oriented) and instrumental (task oriented) influence may be neutralized when subordinates are located geographically at a distance from the leader, as is the case with many sales representatives. Automatic rewards such as commissions can substitute for a leader's use of rewards and punishments to motivate employees. Likewise, limited position power (lack of formal authority) or a strong labor union can neutralize a manger's use of rewards and punishments to motivate employees. Implications for Improving Leadership. Leadership substitutes theory suggests that the situation can be made more favorable to the leader by removing neutralizers. Alternatively, one can make the leader less important by increasing the number of leadership substitutes. Interestingly, a substitute for a formal leader could be informal leadership (shared among members of a work team). In fact, much of this is happening today, with middle level managers being released from their jobs and the workers who they formally managed being given increased responsibility for managing themselves. Research on Theory. Research in support of leadership substitutes theory is mixed (not strong). More research is needed. It seems that leadership may be important for inspiring people to greater efforts regardless of the situation, but the specific behaviors that will most inspire will differ depending on aspects/characteristics of the subordinates, the task, and the organization. This would mean that leadership can not be "substituted" entirely by simply redesigning aspects of the situation. Also, even where there are neutralizers, we know that leaders often act in ways to either eliminate them, change them, or to work around them, to effect higher levels of performance from their people.

6
Summary. The primary contribution of leadership substitutes theory is that it has provided insights into how employees might be motivated to work hard (give greater effort) by means other than through the formal leader. Influence leaders provide could also come, in part, from work design, reward systems, peer leadership, and self-management. The leader is only one source of influence on employee efforts and behavior. The Multiple-Linkage Model. This model is shown on page 221 in Figure 8-5. The figure shows leader behaviors, leading to one or more "intervening variables". Intervening variables are simply variables that intervene (come in-between) leader behaviors and measures of leadership effectiveness. So, for example, some leader behaviors will increase subordinate effort, which in turn result in great sales. To understand better how leader behaviors influence performance outcomes, it is helpful to study the intervening variables, according to the multiple linkage model. The model identifies six intervening variables, including: task commitment, ability and role clarity, organization of work, cooperation and mutual trust, resources and support and external coordination (definitions on pages 220-221). Simply, leader behaviors can influence each of these "intervening variables". Some of these six intervening variables are more important to performance outcomes than others. The relative importance of the intervening variable depends on the aspects of the situation. Aspects of the situation that make an intervening variable particularly important are listed in Table 8-3 of page 222). Situational Influences on Intervening Variable. The multiple-linkage model says that aspects of the situation directly influence the level of each intervening variable (independently of any influence from the leader). For example, subordinate effort and commitment may come from the nature of the task/job directly, rather than from anything the leader does. Two aspects of the situation that influence subordinate effort are the formal reward system and the motivating properties of the job itself. Page 222 provides similar examples of where aspects of the situation can directly influence levels of each of the six "intervening" variables independently of any influence that the leader might have on the intervening variable. This is similar to the idea of "leadership substitutes" discussed earlier. Short Term Actions to Correct Deficiencies. A key prediction from the multiple-linkage theory is that leader actions (behaviors) that correct deficiencies (inadequacies) in any one or more of the intervening variables will improve performance. (Leaders can make-up for low levels in any one of the intervening variables). An effective leader is one who recognizes deficiencies in one or more of the intervening variables and does things to make-up for this deficiency. Table 8-4 (p. 225) lists a number of actions (behaviors) a leader can take to improve a deficiency in each of the six intervening variables of the multiple-linkage model. I view Table 8-4 as potentially very helpful to a practicing leader, who may be looking for ways to improve work performance. A leader can examine where there are deficiencies in one or more of the intervening variables, then look at Table 8-5 to consider different action he/she might take to make up for the deficiency, thereby improving performance. The degree to which a leader is able to act in one or more of the ways suggested in Table 8-5 will depend on many situational factors, including his/her position power, organizational constraints (policies, rules, resources), technology available, and legal-contractual restrictions (e.g. labor/union laws). These situational factors are similar to the "neutralizers" mentioned earlier (see Figure 8-5, box of

7
situational variables appearing on left side of the diagram). Also, the actual effects of a leader's behavior on performance outcomes will depend on situational factors like worker skills, traits, experience, task structure (See Figure 8-5, box of situational variables appearing on right side of the diagram). We know, for example, some people are more responsive to one type of leadership approach, while others are more responsive to a different type of leadership approach (may depend on culture, task, personality etc.). Long Term Effects On Group Performance. Leaders can make long-term improvements in performance by changing the situation in a way that makes it easier for them to influence employee performance. Effective leaders reduce constraints, increase substitutes, and reduce the importance of intervening variables over which they can have little influence. See bottom of page 226 for specific ways in which actions by a leader can make a situation more favorable to their influence, and longer-term unit performance. You should be able to work comfortably with the multiple-linkage mode shown on page 221 (Figure 8-5). Not only should you be able to describe and explain this model, you should be able to give specific examples of each aspect of the model. Practical application would have you indicating the actions leader can take directly and indirectly, short-term and long-term, to improve unit performance. I like this model very much, because I believe it can be very helpful to leaders in identifying areas in need of attention, and offering behavioral (action) strategies for improving unit performance. Evaluation of the Multiple-Linkage Model. This is a more comprehensive model than the earlier theories presented. This is another reason I like it. I believe it better portrays the realities of a leadership situation, and offers specific action plans. It does have weaknesses, however. It does not explain how different leader behaviors interact in effecting the intervening variables. Likewise, the interaction among situational variables, and their joint effects, are not clearly specified. Accordingly, the multiple-linkage model is best considered a useful working framework for understanding where leadership action is most needed, and in providing suggested leadership interventions (actions). There is actually little research on the overall effectiveness of this model, relative to other theories/models of leadership. It simply provides a useful conceptual framework for leaders to better diagnose and respond to unit performance shortcomings. Cognitive Resource Theory. This theory focuses on how cognitive resources (intelligence and experience) are related to group performance. This is important, because organizations use intelligence and experience for selecting managers. According to this theory, the effect of a leader on unit/group performance is determined by an interaction among two leader traits (intelligence and experience), one type of leader behavior (directive leadership) and two aspects of the leadership situation (interpersonal stress and the nature of the group's task). Propositions. The theory says that leadership stress will influence (moderate) the relationship between leader intelligence and subordinate performance. Under low stress, high intelligence results in good plans and decisions. Under high stress, there is no relationship between intelligence and the quality of leader decisions. It is believed that stress interferes with information processing and decision making. The theory also proposes that stress for the leader also influences (moderates) the relationship between leader experience and subordinate performance. Specifically, it predicts that experienced leaders will perform better under stressful conditions than will less experienced leaders. Experience is related to

8
quality of leader decisions under high interpersonal stress but is unrelated to decision quality under low stress. According to this theory then, experienced leaders rely most on intelligence under low stress and rely more on experience under high stress. Leaders with little experience rely on intelligence in both situations. The theory also says that leader intelligence and experience contribute to group performance only when the leader is directive and subordinates require guidance to perform the task effectively. For a very simple, routine task that subordinates know well, there is unlikely to be any relationship between leader intelligence and group performance, even for directive leaders. The rationale behind this propositions is explained on page 228 of your textbook. Research on Cognitive Resource Theory. Research generally supports the idea that intelligence is related more to performance for directive leaders than for nondirective leaders. It is reasoned that intelligent leaders make up better plans and action strategies for doing the work than non-intelligent leaders, especially when the task is complex. Leader's plans and decisions are also usually communicated through directive behavior. Limitations of Research. Research for this theory is weak (mixed; some in support, some studies not in support). General Evaluation of Contingency Theories of Leadership. Contingency theories tell us that leader behaviors that result in improved employee performance often depends on the nature of the situation, as defined by features of the task, characteristics of the employees, aspects of the organization (e.g. corporate culture), culture etc.. While no one contingency model has received strong research support, together they do make us aware that effective leaders adapt their behaviors and style to meet the differing requirements of changing situational circumstances. Applications: Guidelines for Managers This chapter concludes with a number of guidelines for managers, including: Use more planning for a long, complex task Consult more with people who have relevant knowledge Provide more direction to people with interdependent roles Provide more direction and briefings when there is a crisis Monitor a critical task or unreliable person more closely Provide more coaching to an inexperienced subordinate Be more supportive to someone with a very stressful task

Each of these guidelines recognize that leader behaviors (solutions) must fit the requirements of the task, job design (in case of inter-dependent versus independent work roles), situation (in the case of a crisis versus a period of calm), and worker characteristics and traits (reliable versus unreliable employee, stressed versus calm employee, experienced versus inexperienced employee). More simply, the most effective leadership behaviors and style meets the specific requirements of the situation. Leaders must be able to understand the differing requirements of different situations, and adapt their behaviors accordingly.