Contingency Theory

A contingency theory is an organizational theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation. A contingent leader effectively applies their own style of leadership to the right situation.


The contingency approach to leadership was influenced by two earlier research programs endeavoring to pinpoint effective leadership behavior. During the 1950s, researchers at Ohio State University administered extensive questionnaires measuring a range of possible leader behaviors in various organizational contexts. Although multiple sets of leadership behaviors were originally identified based on these questionnaires, two types of behaviors proved to be especially typical of effective leaders: (1) consideration leader behaviors that include building good rapport and interpersonal relationships and showing support and concern for subordinates and (2) initiating structure leader behaviors that provided structure (e.g., role assignment, planning, scheduling) to ensure task completion and goal attainment.

About the same time, investigators from the University of Michigan's Survey Research Center conducted interviews and distributed questionnaires in organizations and collected measures of group productivity to assess effective leadership behaviors. The leadership behavior categories that emerged from the University of Chicago were similar to the consideration and initiating structure behaviors identified by the Ohio State studies. The University of Michigan investigators, however, termed these leadership behaviors relation-oriented behavior and task-oriented behavior. This line of research was later extended by Robert Blake and Jane Mouton in 1964 to suggest that effective leaders score high on both these behaviors.

They suggested that previous theories such as Weber's bureaucracy and Taylor's scientific management had failed because they neglected that management style and organizational structure were influenced by various aspects of the environment: the contingency factors. There could not be "one best way" for leadership or organization.

Historically, contingency theory has sought to formulate broad generalizations about the formal structures that are typically associated with or best fit the use of different technologies. The perspective originated with the work of Joan Woodward (1958), who argued that technologies directly determine differences in such organizational attributes as span of control, centralization of authority, and the formalization of rules and procedures. Some important contingencies for companies are listed below:

  1. Technology
  2. Suppliers and distributors
  3. Consumer interest groups
  4. Customers and competitors
  5. Government
  6. Unions

Contingency approaches

Gareth Morgan in his book Images of Organization describes the main ideas underlying contingency in a nutshell:

  • Organizations are open systems that need careful management to satisfy and balance internal needs and to adapt to environmental circumstances
  • There is no one best way of organizing. The appropriate form depends on the kind of task or environment one is dealing with.
  • Management must be concerned, above all else, with achieving alignments and good fits
  • Different types or species of organizations are needed in different types of environments

Fred Fiedler's contingency model focused on a contingency model of leadership in organizations. This model contains the relationship between leadership style and the favorable-ness of the situation. Situational favorable-ness was described by Fiedler in terms of three empirically derived dimensions:

  1. Leader-member relationship - high if the leader is generally accepted and respected by followers
  2. Degree of task structure - high if the task is very structured
  3. Leader's position power - high if a great deal of authority and power are formally attributed to the leader's position

Situations are favorable to the leader if all three of these dimensions are high.

William Richard Scott describes contingency theory in the following manner: "The best way to organize depends on the nature of the environment to which the organization must relate".[1] The work of other researchers including Paul Lawrence, Jay Lorsch, and James D. Thompson complements this statement. They are more interested in the impact of contingency factors on organizational structure. Their structural contingency theory was the dominant paradigm of organizational structural theories for most of the 1970s. A major empirical test was furnished by Johannes M Pennings who examined the interaction between environmental uncertainty, organization structure and various aspects of performance. Pennings carried out an empirical study on a sample of retail brokerage offices in which aspects of their market environment such as competitiveness, change and munificence, versus organizational arrangements such as decision making templates, power distribution were juxtaposed for possible implications for performance. While structural attributes of offices strongly impacted performance, the evidence for "contingency" was less pronounced.[2]

It can be concluded that there is 'no one best way' or approach in management or doing things, different situation calls for different approach to handle, manage, and solve the arising issue concerned. Management and organization is an 'Open system', which embrace anomalies or challenges every now and then, which requires 'adaptable' and 'situational' solution in order to overcome or solve the problem or issue concerned.[3] Other situational or contingency factors are 'changes in customer demand for goods and services, change in government policy or law, change in environment or climate change, and so forth.

See also


  1. ^ Scott, W.R. (1981). Organizations: Rational, Natural, and Open Systems. Englewood Cliffs NJ: Prentice Hall Inc. 
  2. ^ The Relevance of the Structural-Contingency Model for Organizational Effectiveness Author(s): Johannes M. Pennings Source: Administrative Science Quarterly, Vol. 20, No. 3, (Sep., 1975), pp. 393-410
  3. ^ Jeong Chun Hai @Ibrahim, & Nor Fadzlina Nawi. (2012). Principles of Public Administration: Malaysian Perspectives. Kuala Lumpur: Pearson Publishers. ISBN 978-967-349-233-6


  • Burns, T., Stalker, G. M., (1961): The Management of Innovation. London: Tavistock.
  • Chandler, Jr., A.D., (1962): Strategy and structure: Chapters in the history of the American industrial enterprise. Cambridge, Massachusetts: MIT Press
  • Jeong, Chun Hai @Ibrahim, & Nor Fadzlina, Nawi (2012) Principles of Public Administration: Malaysian Perspectives, Kuala Lumpur: Pearson Publishers.
  • Lawrence, P.R., Lorsch, J.W., (1967): Organization and Environment: Managing Differentiation and Integration. Boston, Massachusetts: Harvard University
  • Lutans, F., (2011) Twelfth Edition, Organisational Behavior, Tata McGraw Hill
  • Mintzberg, H., (1979): The Structuring of Organizations. Englewood Cliffs, New Jersey, USA: Prentice-Hall
  • Morgan, G. (2007) Images of organization, Thousand Oaks: Sage
  • Perrow, C., (1967) "A Framework for the Comparative Analysis of Organizations". In: American Sociological Review, 32 No 2, 194-208
  • Seyranian, Viviane. "Contingency Theories of Leadership", Encyclopedia of Group Processes & Intergroup Relations edited by John M. Levine and Michael A. Hogg. Thousand Oaks, California: SAGE, 2009. 152-56. SAGE Reference Online. Web. 30 Jan. 2012.
  • Thompson, J. D., (1967): Organizations in Action. New York: McGraw-Hill
  • Woodward, J., (1958): Management and Technology. London: Her Majesty's Stationery Office
  • Woodward, J., (1965): Industrial organization: Theory and practice. New York: Oxford University Press

Further reading

  • Fiedler, F. E. (1964). A theory of leadership effectiveness. In L. Berkowitz (Ed.), Advances in experimental social psychology. New York: Academic Press.
  • Fiedler, F. E. (1986) "The contribution of cognitive resources to leadership performance", Journal of Applied Social Psychology 16: 532-545.
  • Hersey, P. and Blanchard, K. H. (1969) "An introduction to situational leadership", Training and Development Journal 23: 26-34.
  • House, R. J. (1996) "Path-goal theory of leadership: Lessons, legacy, and a reformulated theory", Leadership 7: 323-352.
  • Jeong, Chun Hai @Ibrahim, & Nor Fadzlina, Nawi. (2012). Principles of Public Administration: Malaysian Perspectives. Kuala Lumpur: Pearson Publishers.
  • Kerr, S. and Jermier, J. M. (1978) "Substitutes for leadership: Their meaning and measurement", Organizational Behavior and Human Performance 22: 375-403.
  • Kim, H. and Yukl, G. (1995) "Relationships of managerial effectiveness and advancement to self-reported and subordinate-reported leadership behaviors from the multiple-linkage model", Leadership Quarterly, vol. 6 (1995). pp. 361-377.
  • Vroom, V. H. and Jago, A. G. (1995) "Situation effects and levels of analysis in the study of leader participation", Leadership Quarterly 6: 169-181.

External links

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