Task oriented and people oriented leadership is substituted by

Chapter 3: Contingency Approaches to Leadership

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YOUR LEADERSHIP CHALLENGE After reading this chapter, you should be able to:

• Understand how leadership is often contingent on people and situations. • Apply Hersey and Blanchard’s situational theory of leader style to the level of follower readiness. • Apply Fiedler’s contingency model to key relationships among leader style, situational favorability,

and group task performance.

• Explain the path–goal theory of leadership. • Use the Vroom–Jago model to identify the correct amount of follower participation in specific

decision situations.

• Know how to use the power of situational variables to substitute for or neutralize the need for leadership.

CHAPTER OUTLINE 66 The Contingency Approach

69 Hersey and Blanchard’s Situational Theory

73 Fiedler’s Contingency Model

77 Path–Goal Theory

81 The Vroom–Jago Contingency Model

88 Substitutes for Leadership

In The Lead

72 Laura Smith, Yola

75 Sergio Marchionne, Fiat Chrysler Automobiles

79 Alan Robbins, Plastic Lumber Company

87 Art Weinstein, Whitlock Manufacturing

88 Daniel Snyder, Washington Redskins

Leader’s Self-Insight

69 T–P Leadership Questionnaire: An Assessment of Style

73 Are You Ready?

90 Measuring Substitutes for Leadership

Leader’s Bookshelf

67 Shackleton’s Way: Leadership Lessons from the Great Antarctic Explorer

Leadership at Work

92 Task versus Relationship Role Play

Leadership Development: Cases for Analysis

93 Alvis Corporation

94 An Impossible Dream?

A few hours after being named only the third CEO in Microsoft’s history,Satya Nadella held a short impromptu town hall Webcast, near the end ofwhich he said, ‘‘If you have to get back to [something] because it’s more interesting or important, please . . .’’ The gesture reflects the style of Nadella, who previously led the company’s cloud and enterprise businesses, as a quiet, humble leader who emphasizes listening, helpfulness, and collaboration. Previous CEO Steve Ballmer, in contrast, had a forceful, driven approach to leadership and was known for his competitiveness and exuberant displays of emotion.1 Yet both leaders have been successful within the same organization.

This example points to what researchers of leader traits and behaviors eventually discovered: Many different leadership styles can be effective. What, then, determines the success of a leadership style?

One factor that affects what leadership approach will be most effective is the situation in which leadership activities occur. Over the years, researchers have

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observed that leaders frequently behave situationally—that is, they adjust their leadership style depending on a variety of factors in the situations they face. In this chapter, we discuss the elements of leader, followers, and the situation, and the impact each has upon the others. We examine several theories that define how leadership styles, follower attributes, and organizational characteristics fit together to enable successful leadership. The important point of this chapter is that the most effective leadership approach depends on many factors. Understanding the contin- gency approaches can help a leader adapt his or her approach, although it is impor- tant to recognize that leaders also develop their ability to adapt through experience and practice.

3-1 THE CONTINGENCY APPROACH The failure to find universal leader traits or behaviors that would always determine effective leadership led researchers in a new direction. Although leader behavior was still examined, the central focus of the new research was the situation in which leadership occurred. The basic tenet of this focus was that behavior effective in some circumstances might be ineffective under different conditions. Thus, the effectiveness of leader behavior is contingent upon organizational situations. Aptly called contin- gency approaches, these theories explain the relationship between leadership styles and effectiveness in specific situations.

In Exhibit 3.1, the universalistic approach as described in Chapter 2 is compared to the contingency approach described in this chapter. In Chapter 2, researchers were investigating traits or behaviors that could improve performance and satisfaction in any or all situations. They sought universal leadership traits and behaviors. Contingency means that one thing depends on other things, and for a leader to be effective there must be an appropriate fit between the leader’s behavior

EXHIBIT 3.1 Comparing the Universalistic and Contingency Approaches to Leadership

Universalistic Approach

Contingency Approach

Followers Situation

Leader

Outcomes (Performance, satisfaction, etc.)

Leadership Traits/Behaviors

Style Traits

Behavior Position

Outcomes (Performance, satisfaction, etc.)

Needs Maturity Training

Cohesion

Task Structure Systems

Environment

Contingency a theory meaning one thing depends on other things

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and style and the conditions in the situation. A leadership style that works in one sit- uation might not work in another situation. There is no one best way of leadership. Contingency means ‘‘it depends.’’ Many leaders today look to an early twentieth- century explorer for inspiration on how to lead through an extreme situation, as described in this chapter’s Leader’s Bookshelf.

The contingencies most important to leadership as shown in Exhibit 3.1 are the sit- uation and followers. Research implies that situational variables such as task, structure, context, and environment are important to leadership style. The nature of followers

LEADER’S BOOKSHELF Shackleton’s Way: Leadership Lessons from the Great Antarctic Explorer

by Margot Morrell and Stephanie Capparell

‘‘Men wanted for hazardous journey. Small wages. Bitter cold. Long months of complete darkness. Constant danger. Safe return doubtful. Honour and rec- ognition in case of success.’’

Would you sign up for this job? When Sir Ernest Shackleton set out with a crew of 27 in 1914 with the goal of crossing the continent of Antarctica on foot, he probably didn’t understand how utterly true the wording of his ad would turn out to be. His boat, the Endurance, never even touched land but became stuck in ice in the Weddell Sea for months and eventually sank. The men were left drifting on ice floes 1,200 miles from civilization, in danger- ous cold, with only three lifeboats and limited provisions. They must have been terrified, and things didn’t get much better for almost two long, brutal years. But, amazingly, every member of Shackleton’s crew survived.

Margot Morrell and Stephanie Cap- parell analyzed the diaries of Shackleton and crew members to understand what brand of leadership enabled their survival through severe cold, isolation, near starvation, life-threatening storms, and all manner of other hardships. Their book tells a fascinating and inspiring adventure story but also offers lessons for today’s leaders about how to lead in a situation of great stress and hardship.

LESSONS FOR LEADING IN TOUGH TIMES Shackleton’s team eventually made it to a small island and waited while

Shackleton and a few members took a small boat 800 miles over treacherous seas to a whaling station, and then Shackleton took a ship back to rescue the others. Here are some tips from Shackleton’s handling of the crew that apply to leading through any tough situation.

• Step up immediately. After they abandoned the sinking ship, Shackle- ton encouraged people with a sim- ple speech that acknowledged the dangers but expressed optimism and made clear that he was in charge and he would lead them through this. ‘‘Optimism is true moral courage,’’ Shackleton is quoted as saying. By expressing optimism, Shackleton reminded crew members of the faith he had in each of them.

• Keep fairness in mind always. Shackleton placed great value on every member of the crew, and he gained their admiration and respect by his fair, consistent, and egalitarian treatment of them. Each member was expected to do any job on the ship. One high-ranking crew mem- ber wrote: ‘‘[S]crubbing the floors . . . humbles one and knocks out of one any last remnants of false pride that one may have left in one and for this reason I do it voluntarily.’’

• Let everyone contribute to success. When disaster struck, Shackleton knew the various tasks that had to be performed if the group were to survive, and he made sure everyone

had assignments that let them contribute to the solution to their dire predicament. To keep spirits high, he used humor and other diversions (one of the few items he rescued from the sinking ship was a banjo). He took the most difficult people into his own tent to win their support and prevent them from infecting the rest of the crew with discouragement.

ADAPTABILITY MAKES IT POSSIBLE Shackleton always looked ahead and kept his eye on the big picture, which enabled him to quickly change course in the face of the unexpected. Commu- nication, especially by listening, helped him see when a new course of action might be needed. Just before the Endur- ance sailed, he fired the cook and three crew members because he learned through listening and observation that they could damage the morale and effectiveness of the crew. ‘‘Shackleton’s optimism was never foolhardy,’’ the book points out. He had confidence in his own abilities and in the abilities of his crew, and he was able to stay flexible enough to abandon what wasn’t work- ing and try something new. It’s a big part of the reason the group survived— and why eight of the crew members came forward to join Shackleton on his final expedition some years later.

Source: Shackleton’s Way, by Margot Morrell and Stephanie Capparell, is published by Viking Penguin.

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has also been identified as a key contingency. Thus, the needs, maturity, and cohesive- ness of followers make a significant difference to the best style of leadership.

Several models of situational leadership have been developed. The situational theory of Hersey and Blanchard, the contingency model developed by Fiedler and his associates, path–goal theory, the Vroom–Jago model of decision participation, and the substitutes-for-leadership concept will all be described in this chapter. These contingency approaches seek to delineate the characteristics of situations and fol- lowers and examine the leadership styles that can be used effectively. Assuming that a leader can properly diagnose a situation and muster the flexibility to behave according to the appropriate style, successful outcomes are highly likely.

Two basic leadership behaviors that can be adjusted to address various contin- gencies are task behavior and relationship behavior, introduced in Chapter 2. Research has identified these two meta-categories, or broadly defined behavior categories, as applicable to leadership in a variety of situations and time periods.2

A leader can adapt his or her style to be high or low on both task and relationship behavior. Exhibit 3.2 illustrates the four possible behavior approaches—low task– high relationship, high task–high relationship, high task–low relationship, and low task–low relationship. The exhibit describes typical task and relationship behaviors. High task behaviors include planning short-term activities, clarifying tasks, objec- tives, and role expectations, and monitoring operations and performance. High rela- tionship behaviors include providing support and recognition, developing followers’ skills and confidence, and consulting and empowering followers when making decisions and solving problems. Most leaders typically lean toward being stronger in either task-oriented or relationship-oriented behavior, but most experts suggest that a balance of concern for tasks and concern for people is crucial for leadership success over the long term.3

EXHIBIT 3.2 Meta-Categories of Leader Behavior and Four Leader Styles

R EL

AT IO

N S H

IP B

EH A

V IO

R

TASK BEHAVIOR

High

Low Low High

• Coaching toward achievement style • Combine task and relationship behaviors

High Task–High RelationshipLow Task–High Relationship • Participative or supportive style • Provide support and encouragement • Develop followers’ skill and confidence • Consult followers when making decisions and solving problems

Low Task–Low Relationship • Delegating style • Low concern for both tasks and relationships

High Task–Low Relationship • Authoritative style • Plan short-term activities • Clarify tasks, objectives, and expectations • Monitor operations and performance

Sources: Based on Gary Yukl, Angela Gordon, and Tom Taber, ‘‘A Hierarchical Taxonomy of Leadership Behavior: Integrating a Half Century of Behavior Research,’’ Journal of Leadership and Organization Studies 9, no. 1 (2002), pp. 15–32 and Gary Yukl, ‘‘Effective Leadership Behavior: What We Know and What Questions Need More Attention,’’ Academy of Management Perspectives (November 2012), pp. 66–81.

NEW LEADER ACTION MEMO Complete the questionnaire in Leader’s Self-Insight 3.1 to assess your relative emphasis on two important categories of leadership behavior.

Contingency approaches approaches that seek to delineate the characteristics of situations and followers and examine the leadership styles that can be used effectively

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Both Hersey and Blanchard’s situational theory and Fiedler’s contingency model, discussed in the following sections, use these meta-categories of leadership behavior but apply them based on different sets of contingencies.

3-2 HERSEY AND BLANCHARD’S SITUATIONAL THEORY The situational theory developed by Hersey and Blanchard is an interesting extension of the Leadership Grid outlined in Chapter 2. This approach focuses on the charac- teristics of followers as the most important element of the situation and conse- quently of determining effective leader behavior. The point of Hersey and Blanchard’s theory is that subordinates vary in readiness level. People low in task readiness, because of little ability or training, or insecurity, need a different leader- ship style than those who are high in readiness and have good ability, skills, confi- dence, and willingness to work.4

LEADER’S SELF-INSIGHT 3.1

T–P Leadership Questionnaire: An Assessment of Style

Instructions: The following items describe aspects of leadership behavior. Assume you are the appointed leader of a student group and feel the pressure for performance improvements to succeed. Respond to each item according to the way you would most likely act in this pressure situation. Indicate whether each item below is Mostly False or Mostly True for you as a work-group leader.

Mostly False

Mostly True

1. I would hold members personally accountable for their performance. ______ ______

2. I would assign members to specific roles and tasks. ______ ______

3. I would ask the members to work harder. ______ ______

4. I would check on people to know how they are doing. ______ ______

5. I would focus more on execution than on being pleasant with members. ______ ______

6. I would try to make members’ work more pleasant. ______ ______

7. I would focus on maintaining a pleasant atmosphere on the team. ______ ______

8. I would let members do their work the way they think best. ______ ______

9. I would be concerned with people’s personal feelings and welfare. ______ ______

10. I would go out of my way to be helpful to members. ______ ______

Scoring and Interpretation The T–P Leadership Questionnaire is scored as follows: Your T score represents task orientation and is the number of Mostly True answers for questions 1–5. Your P score represents your people or relationship orientation and is the number of Mostly True answers for questions 6–10. A score of 4 or 5 would be considered high for either T or P. A score of 0 or 1 would be considered low. T ¼ _ _ _. P ¼ _ _ _.

Some leaders focus on people needs, leaving task concerns to followers. Other leaders focus on task details with the expectation that followers will carry out instruc- tions. Depending on the situation, both approaches may be effective. The important issue is the ability to identify relevant dimensions of the situation and behave accord- ingly. Through this questionnaire, you can identify your relative emphasis on the two dimensions of task orienta- tion (T) and people orientation (P). These are not opposite approaches, and an individual can rate high or low on either or both.

What is your leadership orientation? Compare your results from this assignment to your result from the quiz in Leader’s Self-Insight 2.2 in Chapter 2. What would you con- sider an ideal leader situation for your style?

Source: Based on the T–P Leadership Questionnaire as published in ‘‘Toward a Particularistic Approach to Leadership Style: Some Find- ings,’’ by T. J. Sergiovanni, R. Metzcus, and L. Burden, American Educa- tional Research Journal 6, no. 1 (1969), pp. 62–79.

Situational theory Hersey and Blanchard’s extension of the Leadership Grid focusing on the charac- teristics of followers as the important element of the situation, and consequently, of determining effective leader behavior

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3-2a Leader Style According to the situational theory, a leader can adopt one of four leadership styles, based on a combination of relationship (concern for people) and task (concern for pro- duction) behavior. The appropriate style depends on the readiness level of followers.

Exhibit 3.3 summarizes the relationship between leader style and follower readi- ness. The upper part of the exhibit indicates the style of the leader, which is based on a combination of concern for people and concern for production tasks. The bell- shaped curve is called a prescriptive curve because it indicates when each style should be used. The four styles are telling, selling, participating, and delegating. The telling style (S1) is a very directive approach that reflects a high concern for tasks and a low concern for people and relationships, as shown in the exhibit. The leader provides detailed objectives and explicit instructions about how tasks should be accomplished. The selling style (S2) is based on a high concern for both relationships and tasks. With this approach, the leader provides task instruction and personal support, explains

EXHIBIT 3.3 The Situational Model of Leadership

(S up

po rt

iv e

B eh

av io

r) R

EL AT

IO N

S H

IP B

EH A

V IO

R

Share ideas and facilitate in decision making

Explain decisions and provide opportunity for clarification

Turn over responsibility for decisions and implementation

Able and Willing

or Confident

Able but Unwilling

or Insecure

Unable but Willing

or Confident

Unable and Unwilling

or Insecure

Provide specific instructions and closely supervise performance

(H IG

H )

(LOW) TASK BEHAVIOR (Guidance)

FOLLOWER READINESS

LEADER STYLE

(HIGH)

HIGH

FOLLOWER DIRECTED

LEADER DIRECTED

LOWMODERATE

R4

S4

S3 S2

S1

R3 R2 R1

®

DE LE

G AT

IN G

P A

R TI

C IP

AT IN

G

SELLING

TELL ING

Source: Adapted from The Hersey and Blanchard Situational Leadership Model / The Center for Leadership Studies, Inc.

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decisions, and gives followers a chance to ask questions and gain clarity about work tasks. The participating style (S3) is characterized by high relationship and low task behavior. The leader encourages participation, consults with followers, and facilitates decision making. The fourth style, the delegating style (S4), reflects a low concern for both tasks and relationships. This leader provides little direction or support because com- plete responsibility for decisions and their implementation is turned over to followers.

3-2b Follower Readiness The appropriate style depends on the readiness level of followers, indicated in the lower part of Exhibit 3.3. R1 represents low readiness and R4 represents high follower readiness. The essence of Hersey and Blanchard’s situational theory is for the leader to diagnose a follower’s readiness and select a style that is appropriate for the readiness level, such as the follower’s degree of education and skills, experience, self-confidence, and work attitudes.

R1 Low Readiness When one or more followers exhibit very low levels of readiness, the leader has to use a telling style, telling followers exactly what to do, directing them in how to do it, and specifying timelines. For example, Phil Hagans owns two McDonald’s franchises in northeast Houston and gives many young workers their first job. He uses a telling style regarding everything from how to dress to the correct way to clean the grill, giving young workers the strong direction they need to de- velop to higher levels of skill and self-confidence.5

R2 Moderate Readiness A selling leadership style works well when followers lack some skills or experience for the job but demonstrate confidence, ability, and willing- ness to learn. With a selling style, the leader gives some direction but also explains deci- sions and clarifies tasks for followers rather than merely instructing how tasks should be performed. Sheryl Sandberg uses a selling style as chief operating officer at Face- book. Many Facebook employees are fresh out of college with little experience, but they are energetic, enthusiastic, and committed. Sandberg’s style combines decisive leadership with persuasion and consensus building. She uses logic and data to explain her decisions, but she also seeks input and feedback from employees. She describes her- self as a leader who tends to ‘‘mentor and demand at the same time.’’6

R3 High Readiness A participating style can be effective when followers have the necessary education, skills, and experience but might be insecure in their abilities and need some encouragement from the leader. The leader can guide followers’ development and act as a resource for advice and assistance. An example of the participating style is Eric Brevig, a visual-effects supervisor with Industrial Light and Magic, who maximizes the creativity of artists and animators by encouraging partic- ipation. Rather than telling people how to do their jobs, Brevig presents them with a challenge and works with them to figure out the best way to meet it.7

R4 Very High Readiness The delegating style of leadership can be effectively used when followers have very high levels of ability, experience, confidence, and willing- ness to accept responsibility for their own task behavior. The leader provides a general goal and sufficient authority to do the tasks as followers see fit. Highly edu- cated professionals such as lawyers, college professors, and social workers would typically fall into this category. There are followers in almost every organization who demonstrate very high readiness.

NEW LEADER ACTION MEMO As a leader, you can tell followers how to perform their tasks if they have few skills, little experience, or low self- confidence. If followers have a moderate degree of skill and show enthusiasm and willingness to learn, provide direction but seek followers’ input and explain your decisions.

CHAPTER 3 CONTINGENCY APPROACHES TO LEADERSHIP 71

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In summary, the telling style (S1) works best for followers who demonstrate very low levels of readiness to take responsibility for their own task behavior, the selling style (S2) is effective for followers with moderate readiness, the participating style (S3) works well for followers with high readiness, and the delegating style (S4) is appropriate for followers with very high readiness. In today’s multigenerational workplace, with people of widely different ages and readiness levels working side by side, many leaders find that they have to use multiple styles. Aaron Brown super- vises a team at IBM that includes employees who span four decades in age, have work experience of between 3 and 30 years, and have varied attitudes, expectations, and ways of working.8 For Brown, getting the best performance out of employees who differ so widely is as challenging—and as energizing—as coping with today’s faster, more competitive business landscape.

Hersey and Blanchard’s contingency model focuses only on the characteristics of followers, not those of the larger situation. The leader should evaluate subordi- nates and adopt whichever style is needed. Using an inappropriate style can hurt morale and performance, as illustrated by the following example.

Laura Smith tried to use a selling or participating style because these approaches fit with her idea of what a ‘‘good’’ leader should be. She failed to realize that many of her employees were at a low readiness level and needed a telling style, with the leader providing clear instructions and specific rules regarding activities and work behavior.

In the Hersey–Blanchard model, leaders can tailor their approach to individual subordinates, similar to the leader–member exchange theory described in Chapter 2.

IN THE LEAD Laura Smith, Yola When 26-year-old Laura Smith opened a yogurt and coffee shop in Washington, D.C. in 2010, she thought she had a winning formula with D.C.’s only fresh yogurt bar. Less than two years later, Yola closed its doors and Smith was looking for a new career. There were several reasons Yola didn’t make it, not least of all the very high rent cost. Yet Smith also acknowledges that an incorrect leadership style hurt the business.

Smith says that if she could have a ‘‘do-over,’’ she would provide more structure, more rules, and more boundaries for her employees, something that is needed in a business where most employees are young and have little work experience. Smith wanted to run her business by allowing employees to have the freedom to express their personal creativity, and she hated the idea of ‘‘telling grown adults when they can take breaks, exactly how to slice a scone out of a baking sheet, and exactly how many minutes late they can be.’’ However, she soon found that her business became characterized by an attitude of permissiveness, where many employees showed up late, performed sloppy work, or did as little as possible while they were on the clock. No one was happy with the work environment.

Smith realized that her employees needed and even wanted to be told what and how to do things. ‘‘It’s the thing I wish I could go back and do over—not because it would have saved my business but because everyone, myself included, would have been so much happier,’’ she says.9

NEW LEADER ACTION MEMO As a leader, you can act as a resource to provide advice and guidance when followers have a high level of skill, experience, and responsibility. Delegate responsibility for decisions and their implementation to followers who have very high levels of skill and positive attitudes.

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If one follower is at a low readiness level, the leader must be very specific, telling the employee exactly what to do, how to do it, and when. For a follower high in readi- ness, the leader provides a general goal and sufficient authority to do the task as the follower sees fit. Leaders can carefully diagnose the readiness level of followers and then apply the appropriate style.

3-3 FIEDLER’S CONTINGENCY MODEL Fiedler and his associates developed a model that takes not only followers but other elements of the situation into consideration.10 Although the model is some- what complicated, the basic idea is simple: Match the leader’s style with the situation most favorable for his or her success. Fiedler’s contingency model was designed to enable leaders to diagnose both leadership style and organizational situation.

3-3a Leadership Style The cornerstone of Fiedler’s theory is the extent to which the leader’s style is relationship-oriented or task-oriented. A relationship-oriented leader is concerned with people. As with the consideration style described in Chapter 2, a relationship- oriented leader establishes mutual trust and respect and listens to employees’ needs.

LEADER’S SELF-INSIGHT 3.2

Are You Ready?

Instructions: A leader’s style can be contingent upon the readiness level of followers. Think of yourself working in your current or former job. Answer the following questions based on how you are on that job. Please answer whether each item is Mostly False or Mostly True for you in that job.