CONTINGENCY THEORIES:

Contingency theory is a class of behavioral theory that claims that there is no best
way to organize a corporation, to lead a company , or to make a decisions. Instead, the
optimal course of action is contingent (dependent) upon the internal and external
situation. It is called contingency because it suggests that a leader’s effectiveness
depends on how well the leader’s style fits the context or the situation. This theory
suggests that no leadership style is best in all situations. In other words, the leader
modifies the best course of action based upon his or her own personal characteristics
and the context.
According to contingency theory, leader’s success depends upon a number of
variables, including the leadership styles, qualities of the followers and aspects of the
situation. There are number of different sub-theories that fall under the contingency
theories. They include: Fielder’s Contingency Theory, the Situational Leadership
theory, the Path-Goal theory and the Decision-Making theory. While all similar on the
surface , they each offer their own distinct views on leadership.
1. Fielder’s Contingency Theory: this theory puts forth the idea that effective
leadership hinges not only on the style used by the leaders, but also on the control
held over the situation. In order to succeed, there must be strong leader- member
relations. Leaders must also presents tasks clearly and with goals and procedures
outlined. They need to possess the ability to hand out punishments and rewards.
This particular theory only fits situation where groups are closely supervised and
not team-based. It also uses a least preferred co-worker (LPC) scale to help
determine the type of worker the leader leasts likes working with.
2. SITUATIONAL LEADERSHIP: more formally called the Hersey-Blanchard
Situational Leadership Theory, this model focuses on leadership style and the
maturity of those being led. The theory puts forth the idea that leadership styles
hinge on four behaviors: telling, selling, participating and delegating. Tshe
maturity levels range from an incompetence or unwillingness to perform the task,
to willingness and ability to perform. The idea is that a successful leader will
adapt leadership techniques to fit the maturity level of the group in question on a
situational basis.
3. Path-Goal Theory: this theory combines two popular theories-goal setting and
expectancy – into one. It puts forth the idea that effective leaders help those in
their direction attain their goals. Under this theory , leaders have the responsibility
of making sure their subordinates have the support and information required to
achieve the goals set. Essentially, this theory holds that effective leaders create
path to help their subordinates achieve goals and that they work to remove
obstacles that stand in the way.
4. DECISION- MAKING THEORY: also known as the Vroom and Yetton’s
Decision-Making Model of leadership, it puts forth the idea that effective leaders
size up situations, assess them and then determine how much support the group
will give toward the effort, adjusting style of leadership to fit. The underlying
assumptions of this theory is that no leadership style or decision making process
 fits all situations. By analyzing the situation and evaluating the problem based on
time, team buy-in, and decision quality, a conclusion about which style bests fits
the situation can be made.

ASSUMPTIONS:
The theory states that each of these styles will be effective in some
situations but not in others. It further states that the relationship between a
leader’s style and effectiveness is dependent on the following variables:
• Employee characteristics
• Characteristics of work environment

CONCLUSION:
The theory has been subjected to empirical testing in several studies and has received
considerable research support. This theory consistently reminds the leaders that their main
role as a leader is to assist the subordinates in defining their goals and then to assist them in
accomplishing those goals in the most effective manner.