Leadership Theory and Contingency: From Management to Change

Introduction

Leadership theory has undergone significant evolution over the past hundred years. Taylor and Fayol provided basic descriptions of the leadership function in for-profit enterprises. The leadership they described was perhaps more in line with what we today understand as management — scientific control, planning, and command — but it provided a starting point. As leadership study has become more refined, it has allowed us to apply leadership theory to a wider range of situations, from government and military contexts to both the profit and not-for-profit sectors.

At its core, leadership remains the art of marshaling resources to achieve a set of outcomes. It is only the methods of leadership practice that change with the situation. This notion is best described in contingency theory, wherein the nature of leadership and its most effective forms are dependent on the situation in question. This paper analyzes leadership theory, including its practical application in the author's life, in order to demonstrate this basic understanding of the nature of leadership and the relevance of contingency theory to understanding leadership today.

Applications of Leadership Theories in Business

When Taylor and Fayol broke down the leadership function into different elements of planning and control, they were describing leadership in a largely non-human sense. At the time, this was predicated on an understanding of labor as part of a greater machine. In some industries, this view of business still holds — particularly in labor-intensive industries, often in the developing world, and in industries where much of the labor is conducted by machines. However, more human-centric forms of leadership theory have also emerged as an extension to this basic understanding of leadership. These human-centric forms recognize the contributions that humans make to an organization's performance and are particularly relevant to knowledge-intensive industries, service industries, and organizations facing significant organizational change.

The rapid pace of technological, political, and legal change has given rise to a world in which organizations face crises and strong change more frequently than they did in the early twentieth century. This dynamic gave rise to a split between leadership in situations of organizational stability — transactional leadership — and leadership in situations of organizational instability — transformational leadership. Bass outlined transformational leadership in terms of how leaders affect followers to transform aspects of the organization, including culture and behavior, and to guide followers toward the pursuit of organizational interests (ChangingMinds.org, 2010).

Strengths and Weaknesses of Contemporary Leadership Models

Modern leadership is often characterized as featuring two distinct styles: transactional and transformational. Situational leadership theory argues that the best leadership style — or the best blend of the two — is dependent on the situation at hand. Few leaders, it is argued, fall neatly into either category. The majority of leaders not only incorporate elements of each style but can also shift their mix depending on their interpretation of the situation (ChangingMinds.org, 2010). Yukl (1999) argues further that there are conceptual weaknesses inherent in transformational theory, including the poorly defined nature of some of its concepts and the linkages between transformational leadership and charismatic leadership. The latter is a modern incarnation of past theories such as the Great Man Theory, in which charisma as a natural personality trait becomes a critical component of strong leadership. Charismatic leadership's main strength is its recognition of the intangible role of charisma in leadership ability, but its focus on this single variable is at odds with the planning, command, and control functions that have been established in leadership theory since the early twentieth century.

The dichotomy of transactional-transformational leadership has been modified by situational and contingency theories such that neither style is understood to exist in its purest form. These theories make intuitive sense, but their ability to shed light on the nature of strong leadership is ultimately compromised by the vagueness of defining ideal leadership on the basis of oblique and ever-changing combinations of styles and techniques. If contingency theory in particular is to be truly understood, it will require a multidimensional, shifting continuum of analysis. Such a calculus-based model has yet to be derived in a manner that is easily understood and practically applicable.

Influence, Power, and Leadership

Traditional, Fayol-esque leadership theory understands leadership as deriving from formal authority, but modern leadership theory recognizes multiple sources of influence — from formal authority to expertise, charisma, political connections, and many others. The basic leadership function of marshaling resources toward specific outcomes depends strongly on the ability of the leader to influence those around him or her. While formal authority may allow the leader to exert influence over direct followers, influence extends in other directions as well. Leaders must exert influence over peers, suppliers, customers, politicians, and superiors. Leaders must understand the sources of influence available to them across these different actors and deploy that influence where needed to help the organization achieve its objectives.

Influence and power operate outside the realm of the transformational/transactional dichotomy, and sources of influence can be used to affect change under either style or any combination thereof. Power and influence are means by which either a transactional or transformational end can be achieved. There may be subtle shifts in the nature of a leader's power and influence depending on the type of leadership being practiced. For example, the military relies heavily on formal power structures, whereas a manager in a creative company may rely heavily on other forms of influence to motivate self-guided employees in the right direction.

Initiating and Managing Change

The importance of studying transformational leadership implies that a major role of leaders is to initiate and manage the organizational change process. In ever-shifting environments, firms must make constant adjustments to the ways in which they pursue their goals. Perhaps more important is the ability of leadership to guide an organization through periods of revolutionary change. Nadler and Tushman (1990) described the executive as the critical actor in the revolutionary or transformational change process.

This process begins with the leader as a visionary. While leaders must always operate with a vision of the future, during revolutionary change the leader must be able to envision a radically different version of the organization and communicate that vision concisely to the rest of the organization. The leader must then be able to elaborate on the specific steps required to bring the organization to that point. This is critical because vision and charisma alone are insufficient to bring about large-scale change (Nadler & Tushman, 1990). Burke and Litwin (1992) outlined in their causal model of organizational performance and change the additional factors that a leader can influence in order to achieve the desired level of transformation. This work supports Nadler and Tushman: charisma can impact motivation and work unit climate, but it does not affect other factors such as systems and organizational structure. Leaders must be able to effect change across all relevant elements of the organization — not simply the human elements — in order to bring about full-scale organizational change.

It is also critical that leaders recognize when change is required. Some leaders anticipate the need for change and act proactively, while others take a more reactionary approach. The proactive approach is generally considered more effective, because reactive leadership often places the organization behind its competitors in responding to changes in the external environment.

Conclusion

Leadership has always been complex, but it has always been simple as well. Leadership is simply about marshaling resources to achieve a specific set of objectives. The methods by which this occurs are described in the different leadership theories. Contingency theory may at times be vague and subject to interpretation, but that is not a fault so much as a reflection of the world in which we exist. Understanding the changeable and imprecise nature of the challenges we face — while still identifying specific visions of the future and solutions to problems — is the task of leaders. Translating these ideas into policies and goals that followers and other stakeholders can understand and work toward is the critical component of the leadership function. This study of leadership has provided a stronger sense of the issues in play and the different means of addressing them, equipping the author with the tools needed to become a more effective leader both today and in the future.

Works Cited

Burke, W. & Litwin, G. (1992). A causal model of organizational performance and change. Journal of Management, 18(3), 523–545.

ChangingMinds.org. (2010). Leadership theories. Retrieved August 9, 2010 from http://changingminds.org/disciplines/leadership/theories/leadership_theories.htm

Nadler, D. & Tushman, M. (1990). Beyond the charismatic leader: Leadership and organizational change. California Management Review, Winter 1990.

Yukl, G. (1999). An evaluation of conceptual weaknesses in transformational and charismatic leadership theories. The Leadership Quarterly, 10(2), 285–305.