LESSON 4

LESSON 4
Traits and Skills of Leaders
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Subtopics:
4.1 Contingency Theory:
a. Fiedler's Least Preferred Co-worker (LPC)
Theory
b. Cognitive Resource Theory of Leadership
c. Strategic Contingencies Theory
4.2 Transactional Leadership

Leader-member Exchange (LMX) Theory
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4.1 Contingency Theory
• Closely related to the situational approach is what has become
known as contingency theory.
• The contingency theory of leadership was proposed by the
Austrian psychologist Fred Edward Fiedler in his landmark 1964
article, "A Contingency Model of Leadership Effectiveness."
• The contingency theory emphasizes the importance of both
the leader's personality and the situation in which that leader
operates.
• Fiedler and his associates studied leaders in a variety of
contexts but mostly in military context and their model is based
on their research findings.
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4.1 Contingency Theory
• Description
• Contingency theories are a class of behavioral theory that
contend that there is no one best way of leading and that a
leadership style that is effective in some situations may not be
successful in others.
• An effect of this is that leaders who are very effective at one
place and time may become unsuccessful either when
transplanted to another situation or when the factors around
them change.
• This helps to explain how some leaders who seem for a while to
have the 'Midas touch' suddenly appear to go off the boil and
make very unsuccessful decisions
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a. Fiedler's Least Preferred Co-worker (LPC) Theory
• The Fiedler Contingency Model was created in
the mid-1960s by Fred Fiedler, a scientist who
studied the personality and characteristics of
leaders.
• The model states that there is no one best
style of leadership and no one single
leadership style that works for all employees.
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a. LPC Theory
• He recognized that there are situational-
contingent factors that affect a leader's ability to
lead.
• The effectiveness of workers depends on how
good a match exists between the leadership style
of the leader and the demands of the situation.
• There are two factors that result from this:
i. leadership style and
ii. situation favorableness (or situational control).
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a. Fiedler's Least Preferred Co-worker (LPC) Theory
Leadership Style
• Fiedler believed that leadership style is fixed, and it can be
measured using a scale he developed called Least-Preferred Co-
Worker (LPC) Scale
• Leadership style is also determined by rating a leader's least
preferred co-worker on the least preferred co-worker (LPC) scale.
• A leader is asked to rate someone he or she least liked working with
(presently or in the past) on a scale of 1-8 in the following areas:
– Unfriendly/friendly
– Uncooperative/cooperative
– Hostile/Supportive
– Guarded/open
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a. LPC Theory
Leadership Style
• This test is not about how horrible the least preferred co-
worker was to work with.
• It is about the leader's behavior towards the co-worker.
• The leader who scores high is most likely relationship
oriented. These are high-LPC leaders.
• They like to build relationships with employees and focus
more on personal connections
• They are more likely to avoid conflict.
• They also are better equipped to make complex decisions.
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a. LPC Theory
Leadership Style
• The model says that task-oriented leaders usually
view their LPCs more negatively, resulting in a lower
score. Fiedler called these low LPC-leaders.
• So, the lower-scoring LPC leader is task oriented.
• This leader is more interested in assigning duties and
getting the work done.
• They're quick to organize a group to get tasks and
projects done. Relationship-building is a low priority.
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a. LPC Theory
Leadership Style
• The essential element of this theory is that there are different
leadership styles for different situations.
• The style of leadership is contingent upon the particular situation.
So, if the situation is fast decision making, the high LPC leader
fares well.
• If the situation is high production, the low LPC leader is better
equipped to handle that because that leader does not care much
about whether the employees like what he or she is doing.
• Once a leader determines his or her leadership style, the
situational control needed for a particular situation must be
determined.
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a. LPC Theory
Three Dimensions of Situational Favorableness
• Three factors are then identified about the

leader, member and the task, as follows:
a. Leader-Member Relations
b. Task Structure
c. Leader’s Position Power
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• The Cognitive Resource Theory of Leadership

was developed by Fred Fiedler and Joe Garcia
in 1987.
• This theory identifies cognitive resources or
variables of a leader that are related to
organizational performance.
• Intelligence and experience are two key
variables in the theory.
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• Intelligence is one's overall effectiveness as
measured by standard IQ tests.
• Experience includes learned behaviors and skills that
are acquired over the years by performing various
tasks.
• These two variables can impact teams performance
depending on the level of stress present.
• Stress is defined as the level of interpersonal conflict
and concerns about performance with superiors.
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• Intelligence
• Experience
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• Fred Fiedler states that a leader uses his or her
intelligence to formulate strategies,
communicate action plans to the group and
then seek the support from the group
members to execute the plans.
• This theory discerns that stress can be a factor
that prevents an intelligent leader from being
effective and there is no ideal leader for all
business situations and all business seasons.
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• The leader is more effective when his style is
more orderly, premeditated and authoritarian.
• An intelligent leader or a leader with a high IQ
can work effectively and able to think out of
the box under low-stress situations, where as
an experienced leader will rely more on past
occurrences and experiences.
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• As an intellectual person will seek for rational
solutions but, not all problems have rational
solutions probably he may not be resourceful under
high-stress situations.
• In a high-stress situation, a person with lower IQ
level but more work experience may be able to lead
better.
• Further, if a leader has poor relationships with the
group, stress could be an impediment in achieving
leadership potential.
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• A leader needs to be an effective communicator
to instruct and guide.
• An intelligent leader provides intellectual effort in
planning, rationalizing, strategizing and decision-
making to realize business objectives.
• He seeks support from team members and
depending on the level of work stress and his
relationship with his team members, decides how
efficiently he will be able to deal with a situation.
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Cognitive Resource Theory predicts that:
1. A leader's cognitive ability contributes to the
performance of the team only when the leader's
approach is directive.
2. Stress affects the relationship between intelligence
and decision quality.
3. Experience is positively related to decision quality
under high stress.
4. For simple tasks, leader intelligence and experience is
irrelevant.
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Advantages
• The Cognitive Resource Theory helps in understanding the role of
intellectual abilities and organisational performances in solving tasks.
Stress is common in leadership situations and this theory emphasizes
how it limits even an intelligent person’s ability to lead.
• It differentiates the abilities of a skilled labour from an experienced
labour and indicates how they are useful. The theory helps to predict
whether a certain type of person will be able to lead in a stressful
situation.
• The theory helps the placement of persons in leadership positions
by suggesting that people be tested for intelligence and the ability to
manage stress in addition to assessing leadership qualities
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Limitations
• Although there are many types and degrees of intelligences
including Intelligence Quotient (IQ), Emotional Quotient
(EQ), Spiritual Quotient (SQ), Physical Quotient (PQ) the
Cognitive Resource Theory doesn’t account for them.
• The nature of tasking itself is not addressed.
• Types of stresses have not been covered in this theory.
• Stress often is measured subjectively.
• Cognitive resource theory also, does not talk about those
leaders who have both, a good IQ and a good work
experience.
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• Author: D.J. Hickson
• Classification: Contingency Theories
• Year: Theory was written by D. J. Hickson et al
(1971)
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• These theorists also focus on the importance of power
and coalition interests in affecting these structural
choices.
• The primary source of power results from
environmental uncertainty, and those who can more
successfully deal with (and whom others end up
depending upon) gain the most influence (e.g,
mechanics and machine breakdowns).
• Thus, those who "control more strategic contingencies
garner more power within the organization"
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• Intra-organizational power depends on three
factors:
a. problem skills,
b. actor centrality and
c. uniqueness of skill.
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 Pro's
• Strategic Contingencies Theory focuses on tasks that need to
be done in the form of problems to be solved, thus de-
emphasizing personality.
• That problem solving assumes a central role in a leader's
ability conforms to a common sense view of the world; there
is little need to provide elaborate explanation as to why it can
work.
• The theory helps to objectify leadership techniques, as
opposed to relying on personalities.
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 Con's
• Power is not defined within any context.
• A uniform testing instrument does not exist to
assess the predictability of the model.
• Cognitive Resource Theory contravenes Strategic
Contingencies Theory.
• There is lacking set of parameters governing the
introduction of variables in power used by
organizational units.
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• Transactional leadership, also known as managerial
leadership, focuses on the role of supervision,
organization, and group performance.
• Leaders who implement this style focus on specific
tasks and use rewards and punishments to motivate
followers.
• This theory was first described in by sociologist
Max Weber and further explored by Bernard M.
Bass in the early 1980s.
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Style
• The transactional leader works through creating clear structures
whereby it is clear what is required of their subordinates, and
the rewards that they get for following orders.
• Punishments are not always mentioned, but they are also well-
understood and formal systems of discipline are usually in
place.
• The early stage of Transactional Leadership is in negotiating the
contract whereby the subordinate is given a salary and other
benefits, and the company (and by implication the
subordinate's manager) gets authority over the subordinate.
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• The transactional leader often uses management by
exception, working on the principle that if something is
operating to defined (and hence expected) performance
then it does not need attention. Exceptions to
expectation require praise and reward for exceeding
expectation, whilst some kind of corrective action is
applied for performance below expectation.
• Whereas Transformational Leadership has more of a
'selling' style, Transactional Leadership, once the
contract is in place, takes a 'telling' style.
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• The Leader-Member Exchange Theory first
emerged in the 1970s.
• This theory, also known as LMX or the Vertical
Dyad Linkage Theory.
• It explores how leaders and managers develop
relationships with team members; and it
explains how those relationships can either
contribute to growth or hold people back.
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• This theory does not focus on the specific
characteristics of an effective organizational leader. But,
LMX focuses on the nature and quality of the
relationships between a leader and his or her individual
subordinates.
• The ideal is for a leader to develop as many high-quality
relationships as possible.
• This will lead to increases in subordinates’ sense of job
satisfaction and organizational citizenship, to increased
productivity and attainment of organizational goals.
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• The theory states that all relationships
between managers and subordinates go
through three stages. These are:
a. Role-Taking.
b. Role-Making.
c. "Routinization."
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• The central concept of LMX is that leadership is more
effective when “leaders and followers are able to develop
mature [partnerships] and thus gain access to the many
benefits these relationships bring” (Graen & Uhl-Bien,
1996, p. 225).
• LMX focuses on the dyadic relationship between leaders
and individual followers, as opposed to the organizational
group (Lunenburg, 2010; Truckenbrodt, 2000).
• Relationships are different with each follower, with some
being of higher quality than others.
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References
• https://www.mindtools.com/pages/article/fiedler.htm
• www.leadership-central.com/fiedler's-contingency-
theory.html
• http://study.com/academy/lesson/fiedlers-contingency-
theory-a-leaders-situational-control.html
• http://www.dailymirror.lk/79857/cognitive-resource-theory-
of-leadership
• http://www.leadership-central.com/strategic-contingencies-
theory.html#axzz3vO9ouPAk
• https://www.mindtools.com/pages/article/leader-member-
exchange.htm
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Traits and Skills of Leaders

4.2 Transactional Leadership

Three Dimensions of Situational Favorableness

• Three factors are then identified about the

• The Cognitive Resource Theory of Leadership

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