The Austrian psychologist Fred Edward Fiedler (1922- 2017), one of the leading researchers in the industrial and organizational psychology, was behind one of the most remarkable management and leadership theories in the 20th century: The contingency management theory.
According Fiedler’s contingency management theory, there is no one best way to structure a corporation and lead its employees, it all depends on the situation since there are a lot of internal an external factors that influence the leader’s working circumstances .
Fiedler says that a leadership style is fixed and cannot be changed to suit the situation, instead we must put leaders into situations that match their style.
Pursuant to this theory, a leader’s effectiveness is determined by how well his style matches the situation.
From all above we can say that the contingency management theory is based on 2 main elements: leadership style and the situational favorableness.
1. Leadership style:
Fiedler developed a scale called “Least Preferred Coworker ” (LPC) that helps people to find out their leadership style by describing the coworker they least prefer to work with.
– A high LPC: means you’re a relationship oriented leader and this refers a good capacity of building relationships and managing conflicts between employees of different levels.
– A low LPC: means you’re a task oriented leader which indicates that you are good at organizing teams and projects to get things done.
2. The situational favorableness:
The second step of Fiedler’s model is about determining how much control of the situation you have as a leader.
It consists of examining 3 factors:
– Leader-member relations: measures how much your team trusts you.
– Tasks structure: the more clear and precise are tasks, that need to be performed, the more favorable is the situation.
– Position power: the authority, power you have to reward/punish your subordinates.
This model allows us to increase our effectiveness by determining our leadership style and the suitable situation(s) to it, instead of looking for one best leadership strategy that doesn’t actually exist according to the contingency theory.
Oeconomia 