Contingency Theory is considered to be a theory of organization. It claims that there exists no perfect way for organizing a corporation, for leading a company, or for making decisions. Thus, the course of action is dependent or contingent upon both the external and internal situation.

The contingent leaders are flexible in choosing and adapting to the strategies for suiting changes in situation at a specific period in the running course of the organization.

Contingency approaches:

In 1993, Fred Fiedler described two factors that contribute to successful and effective leadership. First is the leader's personality, and second is the gravity of the situation that offers control and power to the leader.

For example, Coca-Cola corporation uses the Contingency Management theory to handle the demand and needs of the products based on the situation. Gareth Morgan summarized the major ideas that underlie contingency. They are as follows:

• Organizations are open systems. They always require correct management for balancing and satisfying the internal needs for adapting to the circumstances in the environment.
• There is no existence of perfect way to organize. The correct form is dependent on the type of environment or task and individual is dealing with.
• Management needs to be concerned about achieving good alignments and suitable fits.
• Multiple types of environments need different specifics and types of organizations.

The contingency model:

The contingency model of Fred Fielder focuses on the leadership’s contingency model in the organizations. The model is composed of the relationships between the different styles of leadership and the situation’s favorableness. Fiedler described situational favorableness in three derived dimensions:

• Degree of task structure- If the task is well structured, the employees will be relational in style.
• Leader-member relationship- The leader needs to be accepted generally, and everyone must follow him or her.
• Leader’s position power: The power and authority are attributed formally to the position of the leader.

If the mentioned dimensions are in the correct shape, the situations are in favor of the leader.

Strengths of the contingency theory:

The strengths of the theory are stated below:

• The theory is reliable, as it is based on several research and trials.
• The contingency theory widens the understanding of leadership.
• The predictive nature of the theory is very advantageous. It provides an understanding to the types of leaders about what will be the most effective step to handle specific situations.
• The theory is helpful to the leader because they suggest to them that they do not need ti to be effective in every situation, and there are several scenarios in which a leader might not perfectly fit.
• It provides concrete data on the styles of leadership that are applicable in all the organizations that are developing their styles of leadership.

Conclusion:

Ultimately, according to the Contingency Management Theory, there exists no perfect way to do or execute things. How a business selects for organizing will always depend on the environment where they operate. The business managers will keep the alignment healthy and facilitate achieving a decent fit in every situation and project. In whatever way you apply this theory, just do research and have a well-planned strategy.

“The quality of leadership, more than any other single factor, determines the success or failure of an organization.”- Fred Edward Fiedler.