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Fiedler’s Contingency Theory of Leadership

Fred Fiedler developed the contingency theory of leadership in 1967, in an attempt to make sense of the complexities of human personalities and of the situations in which leaders must act. The theory rest on the belief that situations influence the effectiveness of any leader and that as a result, a leader who is successful in one situation may fail in another situation. The theory tries to account in which certain types leaders should perform well. Fiedler’s theory focuses on the much between the leader’s personality and the Situation. Fiedler’s describe the leader’s basic personality traits in terms of task versus relationship motivation. He describes the situation in terms of how favorable it is for the leader. Fiedler’s concept of task motivation is similar to concern for production on the managerial manager ial grid, and his relationship relationship motivation motivation parallels parallels the grid’s grid’s concern concern for people. Fiedler believes that person’s tendency to be task- oriented or relationship-oriented is  basically constant- if you are more concerned with people than with the task in one situation, you will show the same tendency in other situations. Fiedler measured task and relationship motivation through the use of the least-preferred co-worker (LPC) scale. Leader’s think of one person with whom they have worked in the past and with whom they would least like to work now and then rate that person on sixteen different qualities, such as tendencies to be inefficient/efficient and unfriendly/friendly. Fiedler believes that the LPC scores actually say more about the leader than the least-preferred co-worker  relatively (high LPC) are concerned with interpersonal relations, whereas a low LPC score indicates the leader is more apt to be focused on a task. According to Fiedler, three factors determine the degree to which a situation is favorable or unfavorable to a leader: leader-member relations, task structure, and the leader’s position power. The personal relationship between the leader and his or her  subordinates- leader-member relations depends on the degree of mutual trust, respect, and confidence. Task structure includes such factors the number of different ways aa job job can be performed and whether there is one bestasway, the amount of feedback  provides, and the clarity of the requirements for the job. The theory assumes that highly structured jobs- those that can be performed only one way, have clear requirements, and   provi provide de fe feed edbac backk- ar aree fa favor vorab able le to the the le lead ader er.. Such Such jo jobs bs ar aree ro rout utin inee and easil easily y understood. Less structured jobs that involves more decisions and ambiguity are less favorable for a leader, because those jobs require the to play a greater role in guiding and directing subordinates. The leader’s role provides the leader with position power. Leaders who have control over their management decisions have high, or favorable, position power. Leaders with high position power can assign work and reward and punish employees on their 


own. Leader Leaderss with with less less favora favorable ble,, low-po low-power wer positio positions ns must must get approval approval for such such action’s. 1. Fiedle Fiedlerr has also encou encourag raged ed the use of a leader leader match concept concept since since effecti effective ve leader lea dershi ship p is a functi function on of both both the individu individual al leader leader and sit situat uation ion;; two alt6ernatives are available to the leader who wants a better match between the two. The leader can either attempt to change his or her personality or work to change the situational variables and make them more favorable. Fiedler argues that it is too difficult to get leaders to change their personalities; it is more effective to change the situation. As a result, Fiedler and his associates have developed a self-paced program instruction work book for this purpose. The  booklet teaches leaders how to (1) assess their relationship based on their LPC score, (2) assess the amount of situational favorableness that currently exists in their environment, and (3) change the situation so that it matches their style. The theory has been applied quite successfully. 2. Fiedler’s Fiedler’s model model suggests suggests that that managers managers develop develop a dominant dominant style style of leadershi leadership p early in their careers and it changes very little over time. In his view, this  predisposition to one style is strongly grounded in personality, and although some marginal change in behavior is possible, a significant change is unlikely. This conclusion has strong implications for staffing managerial positions and for replac replacing ing manage managers. rs. When When there there is a mismat mismatch ch between between a manage manager’s r’s   predi predispo sposed sed leader leadershi ship p style style and situat situation ion,, that that manage managerr may have have to be replac rep laced ed by someone someone more more closel closely y attune attuned d to sit situat uation ional al demand demands. s. If the mismatch is not severe, however, a leader’s style may be sufficiently changed  by management development techniques. The best solution in fiedler’s view is to modify the task structure or leader-member relationships. 3. When When Fiedle Fiedlerr examine examined d the relation relationshi ships ps among among lea leader dershi ship p style, style, situati situationa onall favora fav orabil bility ity,, and group group task task perfor performan mance, ce, he found found the patter pattern n that that tasktaskorie orient nted ed le leade aders rs ar aree more more effe effect ctiv ivee wh when en th thee si situ tuat atio ion n is ei eith ther er hi highl ghly y favora fav orable ble or highly highly unfavo unfavorab rable. le. Relati Relations onship hip-ori -orient ented ed lea leader derss are more more effective in situations of moderate favorability. The reason thegets task-oriented leaders excels in the favorable situations is that when everyone along the task is clear, and the leader has power, all that is needed is for someone to take charge and provide directions. Similarly, if the situation is highly unfavorable to the leader, a great deal of structure and task direction is needed. A strong leader defines task structure and can establish authority over subordinates. Because leader-member relations are poor anyway, a strong task oriented will make no difference in the leader’s popularity.

The reason reason the relati relations onship hip-ori -orient ented ed leader leader perfor performs ms better better in sit situat uation ion of  intermediate favorability is that human relations skills important in achieving high group  performance. In these situations the leader may modify well liked, and have some power,


and supervise jobs that contain some ambiguity. A leader with good interpersonal skill can create create a positiv positivee group group atmosp atmospher heree that that will will improv improvee relati relations onship hips, s, clari clarify fy tas task  k  structure, and establish position power. The leader, then, needs to know things in order to use Fiedler’s contingency theory. First, the leader should know whether he or she has a relationship-or task-oriented style. Second, the leader should diagnose the situation and determine whether leadermember relations, task structure, and position power are favorable. Fittings leader style to the situation can yield large dividends. 4. Fiedler Fiedler believes believes that that managers managers cannot easily easily change change their their LPC orient orientation ation or  management style. As a result, he argues that leaders need to understand their  leadership style and analyze the degree of favorability, or situational control. If the match between the two is not good, a leader needs to either make changes (e.g. increased task structure) or find a more compatible leadership situation. Fiedler calls this approach “engineering the job to fit the manager.” 5. Where leader-po leader-positi sition on power is we weak ak would call call for a partici participative pative leadersh leadership ip style. If the leader is uncomfortable with participative approaches, he or she might be given additional position power. This would indicate the need for a more directive approach. 6. In spite of extensive research to support the theory, critics, question the reliability of the measurement of leadership style and the range and appropriateness of  three situational components the leader-member relations, task structure, and position   powe power. r. Howev However er,, manag manager erss ca can n us usee this this mode modell to di diag agno nose se th thee na natu ture re of se sever veral al contingencies that affect leadership style and begin to identify the appropriate style for a given context. House’s Path Goal Theory

Robert House of the University of Toronto has proposed a situational theory of  leadership called Path-GoalLPC Theory. Fiedler’s contingency theory, relies on the somewhat ambiguous trait,Unlike Path-Goal Theory is concerned withwhich the situations under which leader behaviors behav iors are most effective. The theory why did house choose the name path-goal for his theory? According to House, the most important activities of leaders are those that clarify the  paths to various goals of interest to subordinates. Such goals might include a promotion, a sense of accomplishment, or a pleasant work climate. In turn, the opportunity to achieve such goals should promote promote job satisfact satisfaction, ion, leader acceptance, and high effort. Thus the effective leaders form a connection between subordinate goals and organizational goals. House argues that, to provide job satisfaction and leader acceptance, leader   behavior must be perceived as immediately satisfying or as leading to future satisfaction.


Leader that is seen as unnecessary or unhelpful will be resented. House contends that, to  promote subordinate effort, leaders must make rewards dependent on performance and ensure that subordinates have a clear picture of how this reward can be achieved. To do this, leader might have to provide support through direction, guidance, and coaching. Leader Behavior Path-Theory is concerned with four specific kinds of leader   behavior. These include: Supportive Leadership This style considers subordinates needs and supports a friendly climate at work. When work is tedious or boring, supportive leaders ease frustrations and make task more tolerable, thereby influencing more productive performance. However, when work is pleasant and the environment enjoyable, supportive leaders have little effect on performance or satisfaction. Directive Leadership Directive Leadership. This This behavio behaviorr reflec reflects ts author authority ity,, rul rules, es, polici policies, es, and a formal formal organization. Subordinates follow specific guidelines and traditional pattern of decision making. When task are unstructured and roles ambiguous, directive leaders are effective  because subordinates perceive that closer supervision and more directive leadership will increase their opportunities for success. In other words uncertain or unstructured work  environment make employees apprehensive, and in these circumstances a directive style of leader leadershi ship p enhance enhancess their their expecta expectatio tions ns for succes successs and reward rewardss relate related d to high high   performanc performance. e. However, However, when subordinate subordinatess know their jobs and feel confident confident about  performing well, directive leadership is viewed as unnecessary imposition.

  Participative Leadership. Participative leaders emphasize a consensus environment of  team-b tea m-buil uildin ding g relati relations onship hips. s. Result Resultss are simila similarr to those those of direct directive ive leader leadershi ship. p. In unstructure unstr uctured d and ambiguous ambiguous situations situations,, participati participative ve leadership leadership enhances enhances performanc performancee and satisf satisfact action ion.. Howeve However, r, unlike unlike direct directive ive leader leadershi ship, p, par partic ticipa ipati tive ve methods methods also also enhance satisfaction when work is tedious, boring, dangerous, or otherwise unpleasant. Thus participative style incorporates supportive and directive advantages, and works in many situations. But when work is structured and subordinates have clear understanding of their jobs, participative leadership has little or no effect e ffect on performance. Achievement leadership. This style of leadership sets challenging goals, encourages innovation, and emphasize confidence in subordinates. It is particularly important when subordinate subord inatess have to perform perform nonrepetiti nonrepetitive ve tasks in ambiguous ambiguous circumsta circumstances. nces. When tasks tas ks are repeti repetitiv tivee and clear, clear, achiev achieveme ementnt-ori orient ented ed leader leadershi ship p has or no effect effect on  performance or satisfaction.2 Identifying leadership style. Fielder believes a key factor in leadership success is the individual’s basic leadership style. So he begins by trying to find out what that basis style is. Fiedler created the LPC questionnaire for this purpose. It contains 16 contrasting adject adj ective ivess (such (such as pleasa pleasant nt – unpleas unpleasant ant,, effici efficient ent – ineffi inefficie cient, nt, open open – gua guarde rded, d, supportive – hostile). The questionnaire then asks respondents to think of all the co –  workers they have ever had and to describes the one person they least enjoyed working


with by rating him on a scale of 1 to 8 for each of the 16 sets of contrasting adjectives. Fiedler believes that based on the respondents’ answer to this LPC questionnaire, he can determine their basic leadership style. If the least preferred co – worker is described in relatively positive terms (a high LPC score). Then the respondent is primarily interested in good personal relations with his co – worker. That is if one essentially describes the   pers person on he is le leas astt ab able le to work work wi with th in fa favo vora rabl blee te term rms, s, Fi Fied edle lerr would would la label bel hi him m relationship oriented. In contrast, if the least preferred co – worker is seen relatively unfavo unf avora rabl blee te term rmss (a low low LPC LPC sc scor ore) e),, the the re resp spon onden dentt is pr prim imar aril ily y in inte tere rest sted ed in  productivity and thus would be labeled task – oriented. About 16 percent of respondents score in the middle range. Such individuals cannot be classified as either relationship oriented or task oriented and thus fall outside the theory’s predictions. The rest of the discussion therefore, relate to the 84 percent who score in wither the high or low range of  the LPC. Fielder assumes that an individual’s leadership style is fixed. This is important  because it means that it a situation requires a task – oriented leader and the person in that leadership leader ship position position is relationship relationship oriented, either the situation situation ha to be modified modified or the leader removed removed and replaced if optimum effectiveness effectiveness is to be achieved . Fiedler Fiedler argues that leadership style is innate to a person – one can’t change the style to fit changing situations. Defining the situation. After After an indivi individua dual’s l’s basic basic leader leadershi ship p style style has been assessed through the LPC, it is necessary to match the leader with the situation. Fielder  has identified three contingency dimensions that, he argues, define the key situational factors that determine leadership effectiveness. These are leader – member relations, task  structure, and position power. they are defined as follows:

1. Lead Leader er – memb member er re rela lati tion on is the the de degr gree ee of co conf nfid iden ence ce,, tr trus ust, t, an and d resp respec ectt subordinates have in their leader. 2. Task Task str struct ucture ure is the degree degree to which job assignm assignment entss are proceduri procedurized zed (that (that is, structured or unstructured.

3. Po Posi siti tion on po powe werr is the degree degree of influ influen ence ce a le lead ader er has ov over er variab variable less su such ch as hiring, firing, discipline, promotions, and salary increases. The next step in the Fiedler model is to evaluate the situation in terms of the three conting cont ingenc ency y variab variables les.. Leader Leader – member member relati relations ons are either either good good or poor, poor, task  task  structure is either high or low, and position po sition is either strong or weak. Fiedler states that the better the leader – member relations, the more highly structured the job, and the stronger the position power, the more control or influence the leader has. For example, a very favorable situation (where the leaders would have a great deal of control control)) might might involv involvee a payrol payrolll manger manger who is well well respect respected ed and whose


subordinat subordi nates es have confide confidence nce in him, him, (good (good leader leader – member member relati relations ons), ), where where the activities to be done – such as wage computation, check writing, report filing – are specific and clear (high task structure), and the job provides considerable freedom for  him to reward and punish his subordinates (strong position power). On the other hand, an unfavorable situation might be the disliked chairperson of a voluntary fund – raising team. In this jog the leader have very little control. Altogether, by mixing the three contingency variables, there are potentially eight different situations or categories in which leaders could find themselves. Matching leaders and situations. With knowledge on an individual’s LPC and an assessment of the three contingency variable, the Fiedler model proposes matching them up to achieve maximum leadership effectiveness (Fiedler, Chemers and Mahar, 1997). Based on Fiedler’s study of over 1,200 groups, in which he compared relationship versus task – oriented leadership styles in each of the eight situational categories, he concluded that task – oriented leaders tend to perform better situational that were very favorable to them and in situations that were very unfavorable. So Fiedler would predict that when faced with a category I, II, III, VII, situation, or VIII task – oriented leaders  perform better. Relationship – oriented leaders; however, perform better in moderately favorable situations – categories IV through VI.

Given Fiedler’s findings, how would one applies them? One would seek to match lead le ader erss an and d situ situat atio ions ns.. Th That at “sit “situa uati tion” on” would would de defi fine ned d by eva evalu luat atin ing g th thee th thre reee contingency factor of leader – member relations, task structure, and position power. But remember the Fielder views an individual’s leadership style as being fixed. Therefore, there are really only two ways in which to improve leader effectiveness. First, once can change the leader to fit the situation, as in a baseball game; a manger can reach into the bullpen and put in a right – handed pitcher of a left – handed  pitcher, depending on the situational characteristics of the hitter. So for example, if a group situation rates a highly unfavorable but is currently led by relationship – oriented manger, the group’s performance could be improved by replacing that manger with one who is task oriented. The second alternative would be to change the situation to fit the leader. could becontrol done by restructuring tasks or increasing or decreasing the power  that the That leader has to factors such as salary increases. Promotions and disciplinary actions. To illustrate, a task – oriented leader is in a category IV situation. If this leader  could increase his power, then the leader would be operating in category III and the leader – situation match could be compatible for high group performance. Evaluation. As a whole, reviews of the major studies that tested the overall validity of the Fiedler’s model lead to a generally positive conclusion. That is, there is considerable evidence to support at least substantial parts of the model (Schriesheim, Tepper and Tetrault, 1994; Ayman, Chemers, and Fiedler, 1995). But additional variables are probably needed if an improved model is to fill in some of the remaining gaps. Move over, there problems with the LPC and the practical use of the model that needs to be addresses. For instance, the logic underlying the LPC is nor well understood and studies


have shown those respondents’ LPC scores are not stable (Kennedy, Houston, korgard, and Gall Gallo, o, 19 1997) 97).. Al Also so,, the the co cont ntin inge gency ncy va vari riab able less ar aree co comp mple lex x and di diff ffic icul ultt fo for  r   practitioners to assess. It’s often difficult in practice to determine how good the leader –  member relations are, how structured the task is, and how much positions power the leader has. Cognitive Resource Theory: an update on Fiedler’s contingency model. More

recently, Chemers and Ayman (1993) reconceptualized the Fiedler’s original theory to deal with ‘some serious oversight that need to be addressed.” Specifically, they are concerned with trying to explain the process by which a leader obtains effective group  performance. They call this reconceptualization cognitive resource theory. They began making two assumptions. First, intelligent and competent leaders formulate more effective plans decisions, and action strategies than less intelligent and competent leaders. Second, leaders communicate their plans decisions, and strategies through directive behavior. They then show how stress and cognitive resources such as exper exp erie ienc nce, e, te tenur nure, e, an and d inte intell llig igen ence ce ac actt as im impo port rtan antt in infl flue uence ncess on le lead ader ersh ship ip effectiveness. The essence of the new theory can be boiled down to three predictions: (1) directive behavior results in good performance only if linked with intelligence in a supportive, nonstressful leadership environment, (2) in highly stressful situations, there is a positive relationship between job experience and performance, and 93) the intellectual abilit abi lities ies of leader leaderss correl correlate ate with with group group perfor performan mance ce in sit situat uation ionss that that the leader  leader   perceives as nonstresful. The limited numbers of studies to test the theory have, to date generated mixed result res ultss (Vecch (Vecchio, io, 1990; 1990; Gibson, Gibson, Fiedle Fiedlerr and Barret Barret,, 1993) 1993) clearl clearly, y, more more resear research ch is needed. Yet given the impact of Fiedler’s original model of leadership on organizational  behavior, the new theory’s link to this earlier model and the new theory’s introduction of  the leader’s leader’s cognitive cognitive abilities abilities as an important important influence influence on leadership leadership effectiveness, effectiveness, cognitive resource should not be dismissed out of hand. Leader – Member Theory

The previous discussion on leadership theories covered have largely assumed that leaders treat all their their subordinates in the same manner. However, leaders of often ten act very differently toward different subordinates. The leader tends to have favorites who made up his “ in – group” The lead The leader er – memb member er excha exchange nge (L (LMX MX)) th theor eory y ar argue guess th that at be becau cause se of ti time me  pressures, leaders establish a special relationship with a small group of their subordinates. These individuals make up the in – group – they are trusted, get a disproportionate amount of the leader’s attention, and are more likely to receive special privileges. Other  subordinates fall into the out – group. They get less of the leader’s time, fewer of the


  preferred rewards that the leader controls, and have superior – subordinates relations  based on formal authority interactions. The theory proposes that early in the history of the interaction between a leader  and a given subordinates, the leader implicitly categorizes the subordinates as an “in” or  an “out” and that relationship is relatively stable over time (Liden, Wayne, and Stilwell, 1993) just precisely how the leader chooses who falls into each category is unclear, but there is evidence that leaders tend to choose in – groups members because they have  personal characteristics (for example, age, gender attitudes) that are similar to the leader, a higher level of competence than out – group members, and/or extroverted personality (Liden, Wayne, and Stilwell, 1994; Deluga and Perry, 1994; Philips and Bedeian, 1994). LMX LM X theor theory y pred predic icts ts that that su subo bord rdin inat ates es wi with th in – gr group oupss st stat atus us wi will ll ha have ve hi highe gher  r   performance ratings, less turnover, and greater satisfaction with their superiors. Research to test LMX theory has been generally supportive (Dockery and Steiner, 1990; Graen and Uhl – Bein, 1995; Settoon, Bennett and Liden, 1996). More specifically, the theory theory and resear research ch surrou surroundi nding ng it provid providee substa substanti ntive ve evidenc evidencee that that leader leaderss do differentiate among subordinates, that these disparities are far form random, and that in –  group and out – group status is related to employee performance and satisfaction Path-goal Path-g oal theory theory.. A contin contingenc gency y approac approach h to leader leadershi ship p specif specifyi ying ng tha thatt the leader’s responsibility is to increase subordinates’ motivation by clarifying the behaviors necessary for task accomplishment and rewards. Path Goal Theory. Currently, one of the most respected approaches to leadership is the path – goal theory. Developed by Robert House, path – goal theory is a contingency model. A 1986 1986 meta meta – an anal alys ysis is by Robe Robert rt Lord Lord an and d hi hiss as asso soci ciat ates es re reme medi died ed th this is shortco shor tcomi ming ng with with the follow following ing insigh insights: ts: First, First, the Lord Lord study study criti criticize cized d leader leadershi ship p researchers for misinterpreting Stogdill’s and Mann’s findings. Specifically, correlations  between traits and perceived leadership ability were misinterpreted as linkages between traits tra its and leader leaderthat effect effindividuals ective ivenes ness. s. tend Second, Second, reanal reanalysi ysis s of Mann’s Mann’s data dat a and subseq subsequent uent studies revealed to beaperceived as leaders when they possess one or  more of the following traits: intelligence. Dominance and masculinity. Thus, Lord and his colleagues concluded that personality traits are associated with leadership perceptions to a higher degree and more consistently than the popular literature indicated. (Lord, Vader, and Alliger, 1986). This conclusion was supported by results from several recent studies (Atwater and Yammarino, 1993; Morgan, 1993: Malloy and Janowski, 1993). Three recent meta – analysis of more than 61 studies uncovered three key results. First, men and women differed in the type of leadership roles they assumed within work  groups. Mere were seen as displaying more overall leadership and task leadership. In contrast, women were perceived as displaying more social leadership (Eagly and Karau, 1991). Secondly, leadership styles varied by gender. Women used a more democratic or 


 participative style than men. Men employed a more autocratic and directive style thatn women (Eagly, Karau and Johnson, 1992). Third, female leaders were evaluated more negatively that equivalent male leaders, this bias was considerably stronger when somen used an autocratic or directive leadership style. Women evaluators were male (Eagly, Makhihani, and Klonsky, 1992). Behavioral Styles. This phase of leadership research began during World War II as part of an effort to developed better military leaders. It was an outgrowth of two events: the seeming inability of trait theory to explain leadership effectiveness and the human relations movement, an outgrowth of the Hawtorne Studies. The thrust of early  behavioral leadership theory was to focus on leader behavior directly affected work group effectivenes effect iveness. s. This led researchers researchers to identify identify patterns of behavior behavior (called (called leadership leadership styles) that enabled leaders to effectively influence others. Behavi Beha vior oral al styl styles es theo theory ry sp spaw awned ned a lot lot or re rese sear arch ch an and d ge gener nerat ated ed many many   pers perspe pect ctiv ivee model models. s. Pe Perh rhap apss the the most most wi widel dely y kn know own n be beha havi vior oral al st styl yles es model model of  leader lea dershi ship p is the Manage Manageria riall Grid, Grid, rename renamed d the Lea Leader dershi ship p Grid Grid in 1991 (bass and Stogdill, 1991). This model is based on the premise that there is one best style of  leadership. This model prescribes that leaders should demonstrate a high concern of   people and a high concern for production. Situational leadership theory is another well –  known prescriptive theory. According to the theory, appropriate leadership is found by cross referencing an employee’s readiness, which is defined as the extent to which an employee possesses the ability and willingness to complete a task, with one of four  leadership styles. By emphas emphasizi izing ng leader leader behavio behavior, r, someth something ing is learne learned; d; the behavio behavioral ral style style approach makes it clear that leaders are made, not born. This is the opposite of the trait theorists’ traditional assumption. Given what we know about behavior shaping and model  – based training, leader behaviors can be systematically improved and developed. Foe example, a study demonstrated that employee creativity was increase when leaders were trained to (1) help employees identify problems and (2) enhance employees feelings of  self – efficacy (Redmond, Mumford and teach, 2993). Behavi Beha vior oral al styl styles es re rese sear arch ch also also re reve veal aled ed th that at th ther eree is no one be best st st styl ylee of  leadership. The effectiveness of a particular leadership depends on the situation at hand. For instance, employees prefer structure to consideration when faced with role ambiguity (Bass & Stogdill, 1995) Situational leadership. Situational leadership theories grew out of an attempt to explain the inconsistent findings about traits and styles. Situational theories propose that the effectiveness of a particular style of leader behavior depends on the situation. As situations situa tions change, different different styles become appropriate. appropriate. This directly directly challenges the idea of one best of leadership. There are three alternative situational theories of leadership that reject the notion of one best leadership style.


Leader – member relations reflect the extent to which the leader has the support, loyalty, and trust of the work group. This dimension is the most important component of  situational control. Good leader – member relations suggest that the leader can depend on the groups, thus ensuring that the work will try t meet the leader’s goals and objectives. Task structure is concerned with the amount of structure contained within tasks  performed by the work group. For example, a managerial job contains less structure that that of a bank teller. Since structured tasks have guidelines for how the job should be completed, the leader has more control and influence over employees performing such task. This dimension is the second most important component componen t of situational control. Position power refers to the degree to which the leader has formal power to reward, punish, or otherwise obtain compliance from employees (Fiedler, 1993). Linking leadership style and situation control. Fiedler (1993) contends that task  oriented leaders are more effective in extreme situations of either high of low control, but relationship – oriented leaders tend to be more effective in middle – of – the – road situations of moderate control. Overall accuracy of Fiedler’s contingency model was tested through a meta –  analysis of 35 studies containing 137 leaders – style performance relations. According to the researcher’s findings: (1) the contingency theory was correctly included from studies on which it was based, (2) for laboratory studies testing the model, the theory was supported for all leadership situations except situation II, and (3) for fields studies testing the model, three of the eight situations produce completely supportive results while  partial support was obtained for other situations. This last findings suggests that Fielder’s model mod el may need need theore theoreti tical cal refine refinemen mentt (findi (findings ngs:: (1) the contin contingenc gency y the theory ory was correctly included from studies on which it was based, (2) for laboratory studies testing the model, the theory was supported for all leadership situations except situation II, and (3) for field studies testing the model, three of the eight situations produced completely support supp ortive ive result resultss whiled whiled partia partiall suppor supportt was obtain obtained ed of other other sit situat uation ions. s. This This last last finding suggests that Fiedler’s model may need theoretical refinement (Peters, Harke, and   pohlamann, 1993). In conclusion, except for the validity of the LPC scale, Fiedler’s contingency modelby asappropriately considerable support. This implies thatsituations. organizational effectiveness can be enhanced matching leaders with Leaders with an inappropriate style need to change their degree of situational control. Path – goal theory. Robert House originated the path – goal theory of leadership. He proposed a model that describes how expectancy perceptions are influenced by the contingent relationships among four leadership styles and various employee attitudes and   behaviors. According to the path – goal model, leader behavior is acceptable when employees view it as a source of satisfaction or as paving the way to future satisfaction. In addition, leader behavior is motivational to the extent it (1) reduces roadblocks that interfere with goal accomplishment, (2) provides the guidance and support needed by employees, and (3) ties meaningful rewards to goal accomplishment. Because the model deals with pathways to goals and rewards, it is called path – goal theory of leadership.


House sees House sees th thee le leade ader’ r’ss main main jo job b as helpi helping ng empl employ oyee eess st stay ay on th thee ri righ ghtt pa path thss to challenging goals and valued rewards. House believes leaders can exhibit more than one leadership style. The contrasts with wit h Fiedle Fiedler, r, who propos proposes es that that leader leaderss have have one, domina dominant nt style, style, the four four styles styles identified by House is: Directive Leadership

Providing guidance to employee about what should be done and how to do it, scheduling work, and maintaining standards of performance. Supportive Leadership.

Showing concern for the well – being and needs of employees, being friendly and approachable, and treating workers as equals. Participative Leadership.

Consulting with employees and seriously considering their ideas when making decisions. Achievement – oriented leadership

Encouraging employees to perform to perform at their highest level by setting challenging goals, emphasizing excellence, and demonstrating confidence in employee abilities. Research evidence supports the idea that leaders exhibit more than one leadership style sty le (House (House,, 1993). 1993). Descri Descripti ption on on busine business ss leader leaderss reinfo reinforce rcess these these findin findings. gs. For  example, Michael Walsh, prior to his untimely death from cancer, used multiple styles of  leadership to engineer a turnaround at ailing Tenneco (Johnson, 1993) Contingency Factors. Contingency factors are situational variables that cause one style of  leadership to be more effective than another. In the present context, these variables affect expecta expe ctancy ncy or path path – goal percepti perceptions ons.. This This model model has two groups groups of contin contingenc gency y variables. They are employee characteristics and environmental factors. Five important employ emp loyee ee charac character terist istics ics are locus locus of control control,, task task abili ability, ty, need need for achiev achieveme ement, nt, exper exp erie ienc nce, e, an and d ne need ed for for clar clarit ity. y. Thre Threee re rele leva vant nt en envi viro ronm nmen enta tall fa fact ctor orss ar are: e: th thee employee’s task, the authority system, and the work group. All these factors have the  potential for hindering or motivating employees. Research has focused on determining whether the various contingency factors influence the effectiveness of different leadership styles. The employee characteristics of  need for achievement, experience, and need of clarity – affected employee’s preferences


for leadership. Specifically, a study of 298 ROTC cadets revealed that individuals with high achievement needs preferred directive leadership (Kohli, 1990). People with low achievement achiev ement needs wanted supportive supportive leadership. leadership. Experi Experience ence salespeopl salespeoplee were more satisfied when leaders granted them more autonomy and less direction, whereas with a high need of clarity performed performed bett better er and were more satisfied satisfied with directive directive leadership. leadership. With respect to environment environment contingency contingency factors. factors. Suppor Supportive tive leader behavior behavior promoted promoted  job satisfaction when individuals performed structured tasks (Schriesheim and De Nisi, 1991) Managerial implications Managerial implications. There are three important managerial implications, first, leaders possess and use more that one style of leadership. Managers thus should not   be hesitant to try new behaviors when the situation calls for them. second, managers should modify their leadership style to fit employee characteristics. Employees with high achievem achi evement ent needs. needs. Little Little experie experience nce,, and need need for clarit clarity y genera generall lly y should should receiv receivee directive leadership to increase satisfaction and performance. Third, the degree of task  structure is a relevant contingency factor. Managers should consider using supportive supervisions when the task is structured. Supportive supervision is satisfying in this context because employees already now that they should be doing.

Hofstede Organizational Theory What is Organizational Theory?

Organizational theory is the study of how organizations functions and how they affect and are affected by the environment in which they operate. In this book, we examine the principles that underlie the design and operation of effective organizations. Understanding how organizations operate, however, is only the first step in learning how to contro controll and change change organi organizat zation ionss so that that they they can effect effectivel ively y create create wealth wealth and resources. Thus the second is to equip manager in an organization, with the conceptual tools to influence organizational situations in which you find yourself. The lessons of  organizational theory are as important at small the level of first – line supervisor as settings they are as at the level of chief executives officer, in or large organizations, and in diverse as a not – for – profit organizations or the assembly line of manufacturing company. Managers knowledgeable about organizations theory are able to analyzed the structure and culture of their organization, diagnose problems, and, utilizing the process of organizational design, make adjustments, that help the organizations to achieve its goals


Organizational Theory

The study of how organizations functions and how they affect and are affected by the environment in which they operate.

Organizational Structure The formal system of task  and authority relationship that controls how people are to cooperate and use resources to achieve the organization’s goals. Controls coordination and • motivation; shapes behaviors of   people and the organization. Is response to contingencies • involving environment, technology, and human resources.

Evolves as organization grows and differentiates. Can be managed and changed through the process of  organizational design

Organization Culture

Organization Design

The process by which mangers select the manage various dimensions and components of  organizational structure and culture so that an organization can control the activities necessary to achieve its goals.

Balances the need of the organization to manage external and internal pressures so that it can survive in the long run.

The set of shared values and norms that controls organizational members’ interactions with each other and with people outside the organization. Controls coordination and • motivation; shapes behavior of   people and the organization. Is shaped by people, • ethics, and organizational structure.

Evolves as organization grows and differentiates. Can be manages and changes through the process of  or aniz anizat atio iona nall de desi si n


The Importance of Organization Design

Because of increased global competitive pressures and because of the increasing use of  advan adv ance ced d info inform rmat atio ion n te techn chnol ologi ogies es,, organ organiz izat atio iona nall de desi sign gn has be becom comee on onee of  management’s top priorities. Today, as never before, managers are searching for new and   better better ways ways to coordin coordinate ate and motiva motivate te their their employ employees ees to increa increase se the value value their  their  orga organi niza zati tion’ on’ss ca can n cr crea eate te.. Ther Theree ar aree se seve vera rall sp spec ecif ific ic re reas ason on why de desi signi gning ng an organization’s structure and culture is such an important task. Organizational design has important implications for company’s ability to deal with contingencies, achieve, achieve a competitive advantage, effectively manage diversity, and increase its efficiency and ability to innovate new goods and services. Dealing with Contingencies

A contingency is an event that might occur and must be planned for, such as changing environment or a competitor like Amazon.com that decides to use now technology in an inno in novat vativ ivee way. way. The The de desi sign gn of an orga organi niza zati tion on de dete term rmin ines es how ef effe fect ctiv ivel ely y an organization organi zation responds to various various factors factors in its environment environment and obtains obtains scarce scarce resource. resource. For example, an organizations ability to attract skilled employees, loyal customers, or  government contracts is a function of the degree to which it can control those three environment factors. An organization can design its structure in many ways to increase control over its envir env iron onme ment nt.. An orga organi niza zati tion on mi might ght ch chan ange ge empl employ oyee ee ta task sk re rela lati tion onsh ship ipss so th that at empl em ploy oyee eess are are more more awar awaree of the the en envi viro ronm nment ent,, or it mi migh ghtt ch chang angee th thee way way th thee organization relates to other organizations by establishing new contracts or joint ventures. For example, example, when Microsof Microsoftt wanted wanted to attract attract new custom customer er for its Window Windowss 98 software both in the United States and globally, it recruited large numbers of customers servic ser vicee repres represent entati atives ves and create created d a new depart department ment to allow allow them them to better better meet meet customers’ needs, the strategy was very successful, and Windows 98 has become the best selling operating system in the world. Changing technology is another contingency to which organization must respond. Today, the emergence Today, emergence of the Intern Internet et as an import important ant new medium medium throug through h which which organi org anizat zation ionss mange mange relati relations onship hipss with with their their employ employee, ee, custom customers ers,, and suppli suppliers ers is fundamentally changing the design of organizational structure. Gaining Competitive Advantage

Competitive advantage. The ability of one company to outperform another because its mangers are able to create more value from the resources at their disposal. Core Competences. Managers’ skills and abilities in value – creating activities.


Strategy. The specific pattern of decisions and actions that managers take to use core competencies to achieve a competitive advantage and outperform competitors. Managing Diversity

Differences in the race, gender, and national origin of organizational members havee im hav impor porta tant nt im impl plic icat atio ions ns for for the the va valu lues es of an or organ ganiz izat atio ion’ n’ss cu cult ltur uree an and d fo for  r  organizational effectiveness. The quality of organizational decision making, for example, is a function of the diversity of the viewpoints that get considered and of the kind of  analy ana lysi siss that that ta take kess plac place. e. Si Simi mila larl rly, y, in many many or organ ganiz izat atio ions ns,, pa part rtic icula ularl rly y se serv rvic icee organizations, a large part of a workforce are minority employees, whose needs and  preferences  prefe rences must be taken into considerati consideration. on. Also, Also, changes in the characteristic characteristicss of the workforce, such an influx of immigrant workers or the aging of the current workforce, require attention and advance planning. An organization needs to design a structure to make optimal use of the talents of a diverse workforce and to developed cultural values thatt encoura tha encourages ges people people to work work togeth together. er. An org organi anizat zation ion’s ’s str struct ucture ure and cultur culturee determine how effectively mangers are able to coordinate and motivate workers. Efficiency and innovation

Organizations Organizatio ns exist to produce produce goods and service service that people value. There better  better  organizations functions, the more value, in the form of more or better goods and services, they the y create create.. Histor Historica ically lly,, the capacit capacity y of organi organizat zation ionss to create create value value has increa increase se enormously as organizations ha e introduced better ways of producing and distributing goods and services. Earlier, we discussed the importance of the division of labor and the use of modern technology in reducing costs and increasing efficiency. The design and use of new and more efficient organizational structures is equally important. In today’s global environment, for example, competition from countries with low labor costs is pressuring companies all over the world to become more efficient in order to reduce costs or  increase quality. Similarly, the ability of companies to compete successfully in today’s competitive environment is increasingly a function of how well they innovate and how quickly they can introd introduce uce new technol technologie ogies. s. Organi Organizat zation ional al design design plays plays an im impor portan tantt role role in innovation. For example, the way an organization’s structure links people in different specializations, such as research and marketing, determines how fast the organization can introduced new products. Similarly, an organization’s culture can affect people’s desire to be innovative. A culture that is based on entrepreneurial norms and values is more likely to encourage innovation than is a culture that is conservative and bureaucratic  because entrepreneurial values encourage people to learn how to respond and adapt to a changing situation. Organizat Organi zation ional al design design involv involves es a consta constant nt search search for new or better better ways ways of  coord coo rdin inat atin ing g and and moti motivat vatin ing g empl employ oyee ees. s. Di Diff ffer eren entt st stru ruct ctur ures es and cu cult ltur ures es cause cause employees to behave in different ways.


The Consequences of Poor Organizational Design

Many management teams fail to understand the effect of organizational design on their the ir compan company’s y’s perfor performan mance ce and effect effective iveness ness.. Althoug Although h behavio behaviorr is control controlled led by organizational structure and culture, managers are often unaware of this relationship and  pay scant attention to the way employees behave and their role in the organization – until something happens. General Motors, IBM, Sears, Eastman Kodak, and AT & T have all experienced enorm eno rmou ouss prob proble lems ms in the the la last st decad decadee ad adju just stin ing g to th thee re real alit ity y of mode modern rn gl globa oball competition. References:

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David D. Van Fleet, Fleet, Behavior Behavior in organizatio organization n 1991. 1991. Houghto Houghton n Miffl Mifflin in Company Company Richard Richard M. Hodgetts Hodgetts and Donald F. Kuratko. Kuratko. Manage Management ment Second Edition Edition 1988. 1988. Harcourt Brace Jovanovich. 3 David H. Holt. Holt. Management Management Princi Principles ples and Practi Practices, ces, Second Edition. Edition. 1990 1990 Printice Hall, Englewood Cliffs New Jersey 4 Richar Richard d Daft. Daft. Managem Management ent,, Secon Second d Edition Edition 1991.T 1991.The he Dry Dryden den Press Press.. 5 Kathryn Kathryn M. M. Bartol Bartol and and David David C.Marti C.Martin. n. Managemen Managementt 1998. Irwin Irwin McGraw-H McGraw-Hill ill 6 Ju Judi dith th R. Gord Gordon on.. A Di Diagn agnos osti ticc Appr Approa oach ch to Or Orga gani niza zati tiona onall Behav Behavio ior, r, Thir Third d Edition.1991.Allyn and Bacon USA. 7 Curt Curtis is W. Cook Cook an and d Phil Philli lip p L. Huns Hunsak aker er.. Mana Manage geme ment nt an and d Or Orga gani niza zati tion onal al Behavior2001, McGraw-Hill, Irwin. 8 Gareth Gareth R. Jones Organizati Organizational onal Theory Theory Third Third Edition. Edition. 2000. 2000. Print Printice ice Hall. Hall. 9 Ayman, Ayman, R. M.M. M.M. Chemer, Chemer, and F, Fiedl Fiedler. er. Th Thee Contingen Contingency cy Model Model of Leadersh Leadership ip Effectiveness: Its Levels of Analysis. Leadership Quarterly Summer1995. 10 Schrieshei Schriesheim, m, C.A., Tepper, Tepper, and L.A. Tetrault. Tetrault. Least preferred preferred Co-Worker Co-Worker Score, Si Situ tuat atio ional nal Contr Control ol,, an and d Le Lead ader ersh ship ip Ef Effe fect ctiv ivene eness ss:: A Meta Meta Anal Analys ysis is of  Contin Con tingenc gency y Model Model Perfor Performan mance ce Predic Predictio tion. n. Jou Journa rnall of applied applied Psycho Psycholog logy y

August 1995 11 Vecchio, Vecchio, R.P. Theoretical Theoretical and Empirical Empirical Examinati Examination on of Cognitive Resource Resource Theory Journal of Applied Psychology 1990. 12 Deluga, Deluga, J.T., Perry. Perry. The Role of Subordinate Subordinate Perf Performanc ormancee and Integratiati Integratiation on in Le Lead ader ersh ship ip-M -Mem embe berr Excha Exchang nge. e. Gr Group oup an and d Or Orga gani niza zati tion onal al Mana Managem gement ent,, MarcGraw-Hill 1994 13 Eagly, Eagly, A.H. and S.J. Karau. Gender Gender and Emergence Emergence of Leaders: A Meta-Analys Meta-Analysis is Journal of Personality Social Psychology. May 1991 14 Eagly, Eagly, A.H.S.J.Karau A.H.S.J.Karau and B.T. Johnson. Johnson. Gender and Leadershi Leadership p Style Among School Sch ool Pr Princ incipa ipals; ls; a Meta Meta Analys Analysis. is. Educat Education ional al Admini Administr strati ation on Qua Quarte rterly rly February 1992. 15 Eagly.A.H. Eagly.A.H. M.G.Makhij M.G.Makhijani ani and B, G. Klonsky. Klonsky. Gender and and Evaluation Evaluation of  Leaders: A Meta Analysis. Psychological Bulletin. January 1992.



ORGANIZATION THEORY A Report Paper Submitted In Partial Fulfillment For The Course PhD in Development Administration

Submitted to:

Dr. Revelino Garcia PhD (Professor)


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