Two important situational contingencies in the path goal theory are

Chapter 3 Chapter Outline 64 The Contingency Approach 66 Fiedler’s Contingency Model 71 Hersey and Blanchard’s Situational

Theory 75 Path–Goal Theory 79 The Vroom–Jago Contingency Model 85 Substitutes for Leadership

In the Lead 69 Tom Freston, Viacom, Inc. 74 Carole McGraw, Detroit Public

Schools 78 Bob Nardelli, The Home Depot 84 Dave Robbins, Whitlock

Manufacturing 88 Lawrence H. Summers, Harvard

University

Leader’s Self-Insight 67 T–P Leadership Questionnaire:

An Assessment of Style 74 Are You Ready? 87 Measuring Substitutes for Leadership

Leader’s Bookshelf 65 Leadership and the New Science

Leadership at Work 90 Task Versus Relationship Role Play

Leadership Development: Cases for Analysis 90 Alvis Corporation 91 Finance Department

Your Leadership Challenge After reading this chapter, you should be able to:

• Understand how leadership is often contingent on people and situations.

• Apply Fiedler’s contingency model to key relationships among leader style, situational favorability, and group task performance.

• Apply Hersey and Blanchard’s situational theory of leader style to the level of follower readiness.

• 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.

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Contingency Approaches For Pat McGovern, founder and chairman of International Data Group, a technology publishing and research fi rm that owns magazines such as CIO, PC World, and Computerworld, having personal contact with employees and letting them know they’re appreciated is a primary responsibility of leaders. McGovern treats people to lunch at the Ritz on their 10th anni- versary with IDG to tell them how important they are to the success of the company. He personally thanks almost every person in every business unit once a year, which takes about a month of his time. Managers provide him with a list of accomplishments for all their direct reports, which McGovern memorizes the night before his visit so he can congratulate people on spe- cifi c accomplishments. Rather than establishing strict goals and standards for task accomplishment, McGovern decentralizes decision making so that people have the autonomy to make their own decisions about how best to do their jobs.

Wolfgang Bernhard, a member of Volkswagen AG’s board of manage- ment responsible for the core VW brand, displays a very different style of leadership. When he came to the struggling company, Bernhard moved quickly to cut jobs, scale back investments in underperfoming units, and get people focused on quality and productivity issues. He ordered more than 200 employees to report to an auditorium a few miles from headquarters, formed them into teams and told them to fi gure out ways to meet specifi c cost reduction goals, and instructed them not to return to their workplaces until they’d done so. Often working until midnight, the teams took four weeks to meet the targets. Bernhard has also tied managers’ bonuses to demonstrated improvements in quality and productivity. His hard-charging style has ran- kled some long-time employees and managers, but Bernhard doesn’t mind. “I am quick and focused, and I like to cut the formalites,” he says.1

IDG’s Pat McGovern is strongly people-oriented—that is, character- ized by high concern for people and low concern for production. Wolfgang Bernhard, in contrast, is a strong, task-oriented leader, high on concern for production and relatively low on concern for people. Two leaders, both suc- cessful, with two very different approaches to leading. This difference 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?

In the above example, Bernhard and McGovern are performing leader- ship in very different situations. Volkswagen AG recruited Bernhard to assist in a massive restructuring and help the company reverse a steep drop in profi ts. Many people, including CEO Bernd Pischetsrieder, believe Bernhard’s blunt honesty and task-oriented approach is just what is needed to get the au- tomaker back on track. McGovern, on the other hand, is operating in a much more favorable business situation. As a smaller, privately-held company, IDG isn’t under the same kind of public pressures from investors and analysts as Volkswagen. IDG is a leader in its industry, publishes more than 300 maga- zines and newspapers, and consistently earns industry awards. Morale and motivation among employees is high.2

This chapter explores the relationship between leadership effectiveness and the situation in which leadership activities occur. Over the years, re- searchers have observed that leaders frequently behave situationally—that is, they adjust their leadership style depending on a variety of factors in the

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situations they face. In this chapter, we discuss the elements of leader, follower, and the situation, and the impact each has upon the others. We examine several theories that defi ne how leadership styles, follower attributes, and organizational characteristics fi t together to enable successful leadership. The important point of this chapter is that the most effective leadership approach depends on many factors. Understanding the contingency approaches can help a leader adapt his or her approach, although it is important to recognize that leaders also develop their ability to adapt through experience and practice.

The Contingency Approach The failure to fi nd universal leader traits or behaviors that would always de- termine 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 or- ganizational situations. Aptly called contingency approaches, these theories explain the relationship between leadership styles and effectiveness in specifi c situations.

The universalistic approach as described in Chapter 2 is compared to the contingency approach used in this chapter in Exhibit 3.1. In the previous chapter, 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 fi t between the leader’s behavior and style and the conditions in the situation. A leadership style that works in one situation might not work in another situation. There is no one best way of lead- ership. Contingency means “it depends.” This chapter’s Leader’s Bookshelf talks about a new approach to leadership for a new kind of contingency facing today’s organizations.

Contingency a theory meaning one thing depends on other things

Contingency a theory meaning one thing depends on other things

64 PART 2: RESEARCH PERSPECTIVES ON LEADERSHIP

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

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The contingencies most important to leadership as shown in Exhibit 3.1 are the situation and followers. Research implies that situational variables such as task, structure, context, and environment are important to leadership style, just as we saw in the opening examples. The nature of followers has also been identi- fi ed as a key contingency. Thus, the needs, maturity, and cohesiveness of followers make a signifi cant difference to the best style of leadership.

Several models of situational leadership have been developed. The contin- gency model developed by Fiedler and his associates, the situational theory of Hersey and Blanchard, path-goal theory, the Vroom–Jago model of decision participation, and the substitutes for leadership concept will all be described

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Leadership and the New Science

by Margaret J. Wheatley

Leader’s Bookshelf

In searching for a better understanding of organizations and leadership, Margaret Wheatley looked to science for answers. In the world of Newtonian physics, every atom moves in a unique predictable trajectory determined by the forces exerted on it. Prediction and control are accomplished by reducing wholes into discrete parts and carefully regulat- ing the forces that act on those parts. Applied to organiza- tions, this view of the world led to rigid vertical hierarchies, division of labor, task description, and strict operating proce- dures designed to obtain predictable, controlled results.

Just as Newton’s law broke down as physics explored ever-smaller elements of matter and ever-wider expanses of the universe, rigid, control-oriented leadership doesn’t work well in a world of instant information, constant change, and global competition. The physical sciences responded to the failure of Newtonian physics with a new paradigm called quantum mechanics. In Leadership and the New Science, Wheatley explores how leaders are redesigning organizations to survive in a quantum world.

CHAOS, RELATIONSHIPS, AND FIELDS From quantum mechanics and chaos theory emerge new understandings of order, disorder, and change. Individual actions, whether by atoms or people, cannot be easily predicted and controlled. Here’s why:

• Nothing exists except in relationship to everything else. It is not things, but the relationships among them that are the key determinants of a well-ordered system we perceive. Order emerges through a web of relationships that make up the whole, not as a result of controls on individual parts.

• The empty space between things is filled with fields, invisible material that connects elements together.

In organizations, the fields that bind people include vision, shared values, culture, and information.

• Organizations, like all open systems, grow and change in reaction to disequilibrium, and disorder can be a source of new order.

IMPLICATIONS FOR LEADERSHIP These new understandings provide a new way to see, understand, and lead today’s organizations. The new sciences can influence leaders to:

• Nurture relationships and the fields between people with a clear vision, statements of values, expressions of caring, the sharing of information, and freedom from strict rules and controls.

• Focus on the whole, not on the parts in isolation. • Reduce boundaries between departments and

organizations to allow new patterns of relationships. • Become comfortable with uncertainty and recognize

that any solutions are only temporary, specific to the immediate context, and developed through the relationship of people and circumstances.

• Recognize that healthy growth of people and organiza- tions is found in disequilibrium, not in stability.

Wheatley believes leaders can learn from the new sciences how to lead in today’s fast-paced, chaotic world, suggesting that “we can forgo the despair created by such common organization events as change, chaos, information overload, and cyclical behaviors if we recog- nize that organizations are conscious entities, possessing many of the properties of living systems.”

Leadership and the New Science, by Margaret J. Wheatley, is published by Berrett-Koehler Publishers.

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66 PART 2: RESEARCH PERSPECTIVES ON LEADERSHIP

in this chapter. The contingency approaches seek to delineate the characteristics of situations and followers and examine the leadership styles that can be used effectively. Assuming that a leader can properly diagnose a situation and muster the fl exibility to behave according to the appropriate style, successful outcomes are highly likely.

Two basic leadership behaviors that can be adjusted to address various contingencies are task behavior and relationship behavior, introduced in the previ- ous chapter. Research has identifi ed these two meta-categories, or broadly defi ned behavior categories, as applicable to leadership in a variety of situations and time periods.3 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 ap-

proaches—high task–low relationship, high task–high relationship, high relationship–low task, and low task–low relationship. The exhibit describes typical task and relationship behaviors. High task behaviors include planning short-term activities, clarifying tasks, objectives, and role expectations, and monitoring operations and performance. High relationship behaviors include providing support and recognition, de-

veloping followers’ skills and confi dence, and consulting and empower- ing followers when making decisions and solving problems.

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

Fiedler’s Contingency Model An early extensive effort to link leadership style with organizational situation was made by Fiedler and his associates.4 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 orga- nizational situation.

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

Source: 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 Organizational Studies 9, no. 1 (2002), pp. 15–32.

TA S

K

B EH

A V

IO R

RELATIONSHIP BEHAVIOR

High

Low Low High

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

• Coaching toward achievement style • Combine task and relationship behaviors

High Task–High Relationship

High Relationship–Low Task • 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

Action MemoComplete 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

Fiedler’s contingency model a model designed to diagnose whether a leader is task-oriented or relationship-oriented and match leader style to the situation

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67

Leader’s Self-Insight 3.1 T–P Leadership Questionnaire: An Assessment of Style

The following items describe aspects of leadership behavior. Assume you are under great pressure for performance improvements as the leader of a manufac- turing work group of six machine operators. 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 take charge of what should be done and when to do it. _______ _______

2. I would stress getting ahead of competing groups. _______ _______

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

4. I would speak for the group if there were visitors present. _______ _______

5. I would keep the work mov- ing at a rapid pace. _______ _______

6. I would permit members to use their own judgment in solving problems. _______ _______

7. I would ask for group feed- back on my ideas. _______ _______

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

9. I would turn the members loose on a job and let them go for it. _______ _______

10. I would permit the group to set its own pace. _______ _______ T _____ P _____ _______ _______

Scoring and Interpretation The T–P Leadership Questionnaire is scored as follows: Your “T” score is the number of Mostly True answers for questions 1–5. Your “P” score is the number of Mostly True answers for questons 6–10. A score of 4 or 5 would be considered high for either T or P.

Some leaders deal with people needs, leaving task details to followers. Other leaders focus on specific details with the expectation that followers will carry out orders. 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 two dimensions of leadership: task orientation (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 the previous chapter. What would you consider 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 Findings,” by T. J. Sergiovanni, R. Metzcus, and L. Burden, American Educational Research Journal 6, no. 1 (1969), pp. 62–79.

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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. A task-oriented leader is primarily motivated by task accomplishment. Similar to the initiating structure style described earlier, a task-oriented leader provides clear directions and sets performance standards.

Leadership style was measured with a questionnaire known as the least pre- ferred coworker (LPC) scale. The LPC scale has a set of 16 bipolar adjectives

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68 PART 2: RESEARCH PERSPECTIVES ON LEADERSHIP

along an eight-point scale. Examples of the bipolar adjectives used by Fiedler on the LPC scale follow:

open guarded

quarrelsome harmonious

efficient inefficient

self-assured hesitant

gloomy cheerful

If the leader describes the least preferred coworker using positive concepts, he or she is considered relationship-oriented; that is, a leader who cares about and is sensitive to other people’s feelings. Conversely, if a leader uses negative concepts to describe the least preferred coworker, he or she is considered task-oriented; that is, a leader who sees other people in negative terms and places greater value on task activities than on people.

Situation Fiedler’s model presents the leadership situation in terms of three key elements that can be either favorable or unfavorable to a leader: the quality of leader– member relations, task structure, and position power.

Leader–member relations refers to group atmosphere and members’ attitudes toward and acceptance of the leader. When subordinates trust, respect, and have confi dence in the leader, leader–member relations are considered good. When subordinates distrust, do not respect, and have little confi dence in the leader, leader–member relations are poor.

Task structure refers to the extent to which tasks performed by the group are defi ned, involve specifi c procedures, and have clear, explicit goals. Routine, well-defi ned tasks, such as those of assembly-line workers, have a high degree of structure. Creative, ill-defi ned tasks, such as research and development or strategic planning, have a low degree of task structure. When task structure is high, the situation is considered favorable to the leader; when low, the situation is less favorable.

Position power is the extent to which the leader has formal authority over subordinates. Position power is high when the leader has the power to plan and direct the work of subordinates, evaluate it, and reward or punish them. Position power is low when the leader has little authority over subordinates and cannot evaluate their work or reward them. When position power is high, the situation is considered favorable for the leader; when low, the situation is unfavorable.

Combining the three situational characteristics yields a list of eight leader- ship situations, which are illustrated in Exhibit 3.3. Situation I is most favor- able to the leader because leader–member relations are good, task structure is high, and leader position power is strong. Situation VIII is most unfavorable to the leader because leader–member relations are poor, task structure is low, and leader position power is weak. Other octants represent intermediate degrees of favorableness for the leader.

Contingency Theory When Fiedler examined the relationships among leadership style, situational fa- vorability, and group task performance, he found the pattern shown at the top of Exhibit 3.3. Task-oriented leaders are more effective when the situation is either highly favorable or highly unfavorable. Relationship-oriented leaders are more effective in situations of moderate favorability.

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CHAPTER 3: CONTINGENCY APPROACHES 69

The task-oriented leader excels in the favorable situation because everyone gets along, the task is clear, and the leader has power; all that is needed is for someone to take charge and provide direction. Similarly, if the situation is highly unfavorable to the leader, a great deal of structure and task direction is needed. A strong leader defi nes task structure and can establish authority over subordinates. Because leader–member relations are poor anyway, a strong task orientation will make no difference to the leader’s popularity.

The relationship-oriented leader performs better in situations of interme- diate favorability because human relations skills are important in achieving high group performance. In these situations, the leader may be moderately well liked, have some power, and supervise jobs that contain some ambiguity. A leader with good interpersonal skills can create a positive group atmosphere that will improve relationships, clarify task structure, and establish position power.

A leader, then, needs to know two 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 leader–member relations, task structure, and position power are favor- able or unfavorable. Consider the following example of Tom Freston, former CEO of MTV Networks and Viacom, Inc.

Tom Freston, Viacom, Inc.

A few years ago, Tom Freston was regarded as one of the best leaders in the enter- tainment industry. In the fall of 2006, the 26-year company veteran, credited with building MTV into a global powerhouse, was fi red. What went wrong?

One way to look at Freston’s rise and fall is to examine his leadership in terms of Fiedler’s theory. As CEO of MTV Networks and later its parent company Viacom, Freston fostered a relaxed atmosphere and gave people freedom to explore, imagine,

Source: Based on Fred E. Fiedler, “The Effects of Leadership Training and Experience: A Contingency Model Interpretation,” Administrative Science Quarterly 17 (1972), p. 455.

Exhibit 3.3 Fiedler’s Classification: How Leader Style Fits the Situation

Situations

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70 PART 2: RESEARCH PERSPECTIVES ON LEADERSHIP

and make many of their own decisions. In interviews, he often credited employees for the company’s success rather than taking all the applause for himself. Employ- ees liked Freston’s laid-back approach and appreciated his trust and respect for their judgment. For many years, MTV Networks and Viacom maintained a steady level of success under Freston’s style of leadership.

But things in the media industry have changed dramatically with the emer- gence of Internet startups such as MySpace and YouTube. As the power of these new media outlets mushroomed, MTV began to lose its hip status. Viacom launched its own broadband channels, but they have fared poorly. At the same time, the tra- ditional cable network audience is shrinking, along with advertising dollars. MTV’s 2006 annual Video Music Awards provided the ultimate example of how much things have changed. Despite the show’s serious star power, ratings fell nearly 30 percent from the previous year and nearly 50 percent from two years earlier.

Viacom’s stock price has refl ected the company’s fl agging fortunes. Chairman Sumner Redstone believed something had to be done, and fast. Despite his earlier support of Freston, Redstone convened the Viacom board and got their approval to fi re the unsuspecting CEO. Redstone is now putting his hopes for Viacom’s future on Philippe Dauman, a numbers-oriented former lawyer who says he’s committed to putting the company “on the fast track.”5

Tom Freston might be characterized as using a relationship-oriented style in an unfavorable situation. The environment has grown more challenging, the na- ture of tasks in the media industry is unstructured, and Freson’s personal power

with employees has begun to erode somewhat as the company has grown larger and faced bigger problems. Viacom Chairman Sumner Redstone grew impatient with the lack of results and the slow re- sponse to increased competition, and he felt that Freston’s leadership approach was no longer working. Redstone believed a leader using a more task-oriented style might be able to impose the structure and

discipline needed for the organization to succeed in its current situa- tion. In discussing his appointment as the new CEO, Philippe Dauman said Redstone “told me I was the right guy at the right time.”6 Read the Consider This box for an interesting perspective on the disadvantages of persisting in a behavior style despite the processes of change.

An important contribution of Fiedler’s research is that it goes be- yond the notion of leadership styles to try to show how styles fi t the sit- uation. Many studies have been conducted to test Fiedler’s model, and

the research in general provides some support for the model.7 However, Fiedler’s model has also been criticized.8 Using the LPC score as a measure of relationship- or task-oriented behavior seems simplistic to some researchers, and the weights used to determine situation favorability seem to have been determined in an ar- bitrary manner. In addition, some observers argue that the empirical support for the model is weak because it is based on correlational results that fail to achieve statistical signifi cance in the majority of cases. The model also isn’t clear about how the model works over time. For instance, if a task-oriented leader is matched with an unfavorable situation and is successful the organizational situation is likely to improve and become a situation more appropriate for a relationship- oriented leader.

Finally, Fiedler’s model and much of the subsequent research fails to consider medium LPC leaders, who some studies indicate are more effective than either high or low LPC leaders in a majority of situations.9 Leaders who score in the mid-range on the LPC scale presumably balance the concern for relationships

Action MemoAs a leader, you can effectively use a task-oriented style when the organizational

situation is either highly unfavorable or highly favorable to your leadership. Use a

relationship-oriented style in situations of intermediate favorability because human

relations skills can create a positive atmosphere.

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with a concern for task achievement more effectively than high or low LPC lead- ers, making them more adaptable to a variety of situations.

New research has continued to improve Fiedler’s model,10 and it is still con- sidered an important contribution to leadership studies. However, its major im- pact may have been to stir other researchers to consider situational factors more seriously. A number of other situational theories have been developed in the years since Fiedler’s original research.

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 important element of the situation, and consequently 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 leadership style than those who are high in readiness and have good ability, skills, confi dence, and willingness to work.11

According to the situational theory, a leader can adopt one of four leader- ship styles, based on a combination of relationship (concern for people) and task (concern for production) behavior. The appropriate style depends on the readiness level of followers. Exhibit 3.4 summarizes the relationship between leader style and follower readiness. The upper part of the exhibit