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Contingency Leadership Theory

The contingency leadership theory (Fiedler, 1967) is often called situational theory because this theory suggests leadership that depends on the situation. Contingency theory assumes that leadership is a process in which the ability of a leader to make an influence depends on group task situations and levels rather than his leadership style, personality and approach that fits his group.

The model or contingency leadership theory Fiedler sees that effective groups depend on the compatibility between the styles of leaders who interact with their subordinates so that the situation is controlling and influencing leaders. Leadership will not occur in a social or environmental vacuum.

Leaders try to influence group members in relation to specific situations. The situation can vary greatly along different dimensions, therefore it only makes sense to estimate that there is no one style or approach to leadership that will always be the best.

However, the most effective strategies will probably vary from one situation to another. The acceptance of this basic reality underlies the theory of leader effectiveness developed by Fiedler, which explains his theory as a Contingency Approach.

The central assumption of this theory is that a leader's contribution to group performance success is determined by both the characteristics of the leader and by a variety of conditions and situations. To be able to fully understand the effectiveness of leaders, both of these must be considered.

According to this contingency leadership theory, the performance of the group is contingent upon both the motivational system of the leader and the degree to which the leader has control and influence in a particular situation, the situational favorableness (Fiedler, 1974: 73).

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Contingency theory looks at the situation aspects of the leadership (organization context). Fiedler said that there are two types of leadership variables: Leader Orientation and Situation Favorability.

• Orientation Leader
In this leadership, it is seen whether the leader in an organization is oriented to relationships or crossing the task. Leader Orientation is known from the semantic differential scale of the most disliked associates in the organization (Least preffered coworker = LPC). LPC is high if the leader does not like coworkers, while the low LPC shows leaders who are ready to accept coworkers to work together. 

A high LPC score indicates that leaders are relationship oriented, whereas low LPC scores indicate that the leader is crossing the task. Fiedler predicts that leaders with Low LPC, those who prioritize task orientation, will be more effective than High LPC leaders, namely those who prioritize orientation to people or good relations with people if the control situation is very low or very high. Conversely, leaders with High LPC will be more effective than leaders with Low LPC if the control situation is moderate.

• Situation favorability
At this point, leadership is seen from the extent to which the leader can control a situation. This leadership development is determined by 3 situation variables, namely:
1. Leader-Member Orientation: personal relationship between leaders and their members.
2. Task Structure: the level of structure of tasks given by leaders to be done by members of the organization.
3. Position Power: the level of power gained by the leader of the organization because of the position.