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Contextual Leadership and its Approach

This literature review focuses on contextual leadership in the organization. Leadership concepts are continually changing and developing however, they are three main categories: Transactional leadership, transformational leadership and contextual leadership. Transactional leadership is a balanced give-and-take between organizational goals and team performance. Transformational leadership emphasizes organizational changes in the environment. Contextual leadership centers on the leadership of the organization in the context of volatility its environment. For the purposes of this review we will discuss contextual leadership. Leadership theories and styles have been studied and evaluated for decades. Leading experts label several different approaches to leadership functions and concepts, such as situational leadership, contingency leadership, and path-goal theory. Leadership theorists highlight the influence of specific industry conditions that require organizational change in the application of leadership style in an organization. The goal of contextual leadership is to create a holistic approach to interpreting the team’s values and mission as mutually beneficial. The review will begin with the explanation and application of contextual leadership theories and end with a discussion on the importance of organization change in learning organizations.

Keywords: contextual leadership, contingency, organizational change, organizational leadership, situational, path-goal, Vroom-Yetton, Vroom-Jago

Contextual Leadership and its Approach

Leadership has been a fascinating topic to researchers for years. Observant people postulated that leaders possessed a certain set of personality traits. They noticed that there was a trend of these traits amongst those who were considered great leaders and the original search was to find those traits and name them (Jago, 1982).

The next school of thought turned more external from innate traits to learned skills. Without conceding that there were some personality traits that had to exist, those became the lesser important ingredient in the make-up of a leader. The skills approach focused on the duties that a leader fulfills throughout the day and throughout the career path wherein the main focus is on the balancing of technical, human, and conceptual skills and the shifting importance as a leader moves up an organizational chain (Katz, 1955).

Another sought to understand the leadership role through the relationship between the leaders and the follower relative to the task. The idea revolves around the differences in the followers whereas some need direction and others need encouragement (Northouse, 2013).

There is one more major leadership approach, the situational leadership approach. This concept will serve as the foundation of this essay. In the following pages, an examination of several of the major theories that fall under situational leadership as well as areas for future study that were not fully exhausted in previous studies as well as criticisms and short comings.

Situational Leadership Approach

A leader utilizing situational leadership varies the approach dependent on the subordinates need. The subordinate’s ability and commitment level, beginning with directing (requiring help with the lowest level application), coaching, supporting, and delegating (requires little to no direction or support). Hicks and McCracken (2010) break the theory in to three topics three functions of a leader: coaching, mentoring, and teaching. The leader decides which approach is most necessary depending on the circumstance and commitment level of those he or she is leading.

According to Ghofrani (2012), it is fundamentally important to match the leadership style, personality, specific expertise, and project knowledge with the dilemma. It is also vital to have the correct team chemistry. Project success is heavily dependent on the ability of the individual members to work with each other and to trust the leader to see the bigger picture and operate within the project scope. Overall success can only be determined at the conclusion of a project with the input from team members and leadership.

Contingency Leadership

The concept of contingency leadership, posited by Fred Fiedler, was revolutionary from the school of thought in the 1960’s. The leading notion at the time was that leaders all had specific traits that enabled them to be leaders and those who did not possess all of those necessary traits would ever be a great, or even a good leader. Fiedler had another thought entirely. He theorized that the situation and the leader had to match for the leader to be considered highly effective (Rice & Chemers, 1973). Anyone with leadership skills can lead in any situation, however, to achieve maximum efficacy and efficiency, the situation and the leader had to match up correctly.

One study sought to study the relationship between leadership styles and personality traits for physical education managers in the Khorasan Razavi province of Iran. The study showed a variety of positive and negative relationships concerning style of leadership and individual variables such as age, education, and experience. However, the researchers concluded that the contingency theory ought to be introduced into the field more due to the empirical evidence that the sample population differed and relationships changed under differing circumstances (Ghofrani, 2012).

Contingency leadership theory suggests that leaders are predisposed to lead because of their behavior and in turn utilize a specific leadership characteristic. As a result they are typically handpicked for a specific leadership position. As an example, a project manager is brutally attacked while working with an architect to build a state-of-the-art maximum-security prison. The project manager’s experience has changed, which changes his behavior and mindset toward incarcerated persons. The project manager easily allows additional time to be added to the schedule believing the additional time will add to the security of the facility. Conversely, a project manager who has never experienced any type of violence is more likely to believe prisons serve little too no practical purpose and are only a waste of taxpayer’s contributions and therefore has little patience for delays. This example is not completely failsafe and is meant to serve only as an illustration of a leadership characteristic of patience.

In the corporate world, Kraft (1993) claimed that because there was no single best way to establish a corporate hierarchy and structure, firms from the same market who were chasing the same customers could be equally effective using a variety of different structures. In a study to determine the drivers for hiring a Chief Purchasing Officer, establishing his tenure, his reporting line and the tenure thereof, several conclusions were reached supporting a contingency theory approach. First, it was determined that the external influences of the company environment played a substantial role as a driver in establishing a CPO. Emerson (1962) noted that the hiring of critical executive positions, CEO excepted, is also based on challenges from the external environment, as well as corporate strategy. Thompson (1967) supported that when he observed that companies choose executives based on their previously demonstrated ability to read and respond effectively to the variables of the external environment.

The parameters of the study were specific to the establishment of a CPO and the reporting line and the successor of the first CPO. This study found that one third of internally promoted personnel did not have supply experience while virtually all of externally hired CPOs had some supply experience but not necessarily as a CPO (Johnson & Leenders, 2008) and all new CPO positions reported directly to either the CEO or a VP. The second CPO of the same company however, frequently had no previous supply experience or CPO experience. This speaks to the contingency theory that the unique challenges that a CPO for a form that does not have an existing supply chain requires certain characteristics of a leader found only through experience. Once the system has been established and is functioning relational leadership qualities tend to have a more prominent role in the selection process.

Contingency leadership is a cast into three specific leadership models: Leader-Member Relations, Task Structure, and Leader Position Power (Hardy, 1975). Leadership-Membership Relations relates to how well the leader is trusted and the followers’ propensity to follow him or her. Co-workers look to their leadership for guidance, and therefore leaders fulfill a critical role (Humphrey & Berthiaume, 1993) which supports Fiedler’s theory regarding the importance that each leader is matched correctly with the task they overseeing. Leader Position Power “will influence followers’ behavior” (Atwater & Yammarino, 1996) solely based on the position held within an organization. The positional power a leader holds may look like a hammer to subordinates which the leader might use to punish. The punishment may take the form of firing an individual employee or withholding advancement opportunities. Positional power can also be positive; the leader may also be able to help advance employees within an organization.

The nature of our world today is increasingly globalized; the economies of nations are tied together and woven so tightly that a disruption in one nation is felt in the economy of another. Huge corporations exist that span every populated continent and dozens of countries. This complicates leadership to a completely different dimension. Cultural implications are thrust into the forefront in the consideration of a global contingency theory model.

The Japanese conduct business very differently from the way Americans do. Certain mannerisms are considered vital to etiquette and building trust between representatives from two differing nations. For example, it is a casual exercise to pass out a business card within the American business environment. That is not so with the Japanese, they hold this practice in extremely high regard. In America when concluding a business meeting, it is typical to walk your guest out to the front lobby where the salutation of the day is rendered and the two part ways. In Japan, it is custom to walk the guest to the elevator door. These small differences point to a much larger notion. American leaders might not do well working with other nations if they do not understand the culture.

Project GLOBE research indicated that there are nine attributes to cultures that require consideration when considering a multinational manager. These attributes include (a) assertiveness, (b) future orientation, (c) gender differentiation, (d) uncertainty avoidance, (e) power distance, (f) collectivism versus individualism, (g) in-group collectivism, (h) performance orientation, and (i) humane orientation (Javidan & House, 2001). These attribute must be used to match up a leadership style with the nation in which the company is doing business. It is not enough for a potential manager to understand the culture, his leadership style has to fit the culture to maximize efficacy.

One would not appoint a passive woman who embraces individualism to represent a company in Egypt where the culture demands highly assertive men who embrace the collective Muslim or Egyptian mindset, regardless of how well the female candidate understand the culture. One would not send a passive, individualist male for that position; the culture demands a different type of leader. Holt and Muczyk (2008) concluded that there is enough information based on research to frustrate any contingency model of leadership that tries to include all gathered data. However, when a model chooses only cultural imperatives that are related to leadership, a model is possible.

Even within the idea and concept of situational leadership and contingency theory, there are decision models that have a more detailed breakdown of leadership. In the Vroom-Yetton decision model, which speaks to group leadership versus organizational leadership, leaders are encouraged to make decisions based on the scale and type of situation that must be made. The situation will dictate if the leader makes a unilateral decision or whether he uses group opinions and to what extent he weighs the opinion (Margerison & Glube, 1979). Another model, Vroom-Jago, uses numerical quantification to determine which direction the decision should go (Brown & Finstuen, 1993).

The idea of leadership is only effective with people who possess certain traits archaic. This does not mean that all people can be leaders, but that most people can lead to some capacity. The determining factors for the leadership are completely situational. The contingency theory operates within the situation approach and can be used by any leader to make a decision and predict a high likelihood of a favorable outcome.

Path-Goal Theory

Leaders utilize the path-goal theory to motivate subordinates by identifying a roadmap for members to follow and providing structure (House, 1971). At the end of a particular road lies a potential reward, which the member views as valuable. Many corporations utilize this technique; an example is the United States Air Force’s IDEA program. The IDEA program rewards members who find cost saving measures that can be incorporated Air Force wide. The IDEA program has both minimum and maximum payouts. The program payout ranges from $200.00 to $10,000 depending on the overall cost savings to the Air Force. Many elementary schools utilize the path-goal theory by enticing children to sell magazines and other like items in effort to purchase new playground equipment for their school.

At the kickoff of the event, the event coordinators show the children extravagant playground equipment fit for royalty. Following the sales pitch, the children are motivated and begin selling the items once the school’s end of day bell rings. The path goal theory does not entice all individuals; some individuals are not motivated by tangible payouts and instead prefer a pat on the back.

Organizational Change

“The meaning of a message is the change which it produces in the image” (Boulding, 1961, p.7). Organizations that experience success in rapidly changing markets customarily innovate, respond quickly to industry fluctuations, and grasp emergent opportunities before their competition. They perform efficiently while continuing to explore new sources of increasing organizational value (Blackwell, Demerath, Dominicis, & Gibson, 2002;Blanchard, 2009).

This type of performance is the result of leaders who understand the importance of change. Leading effective change in an organization blends the best practices of current and former leaders, innovation, and perseverance. The secret behind their success is the leadership model.

Historically leadership models have transitioned into three categories: transactional, transformative, and contextual. Transactional leadership, transformative leadership, and contextual leadership models differ by the environment of the organization. The transactional leadership model is best suited in unchanging environments. Transformative leadership is common in environments undergoing systematic change. Contextual leadership works well in volatile environments where change is continuous and hectic (Anantaraman, 1993; Aloory & Toth, 2004).

Contextual leadership emphasizes the context of incessant volatility in the environment of an organization. Models of leadership such as visionary and charismatic may contain superfluities like super leadership (disclosures the shortfalls of charismatic leadership) and instrumental leadership (converts vision into reality) that are effective when the environmental shifts from one level of stability to another. Currently, uncertainty and expectancy is the emphasis behind global management decisions and organizational change. Contextual leaders recognize the need to prepare for the unexpected and are prevalent in learning organizations (Anantaraman, 1993; Box, 2011).

Learning Organization

Salvatore (2012) states a learning organization is a collaboration of individuals and collective groups. They are in a constant learning cycle that allows the organization to create or maintain a competitive advantage in the global economy. In a learning organization, groups apply vertical and horizontal information systems to share information up and down the chain of command seamlessly. Communication between management in areas of opportunities, decisions, new technology, vendors, and competitor relations increase informative decisions and resolves dilemmas before they become larger issues. Additionally information sharing allows global managers flexibility in structuring departments, work coordination, and the blending of functional work teams into diverse work groups. Proverbs 12:1 teaches us, “Whosoever loveth instruction loveth knowledge: but he that hateth reproof is brutish (KJV). We must always transform by the renewing of our minds. This process prepares us to make the tough decisions from a biblical perspective.


Peter Vaill describes the uncertainty in work groups as “Permanent white water conditions are full of surprises … the continual occurrence of problems that are not ‘supposed’ to happen” will happen (Peter Vaill: Learning”, 2003). Dr. Vaill’s imagery of permanent white water reveals the struggles of navigating organizational change in volatile markets without losing a team-member or market share to the rapids. His ideals focus on management’s awareness of the need to allow openness and flexibility in chaotic scenarios. Moreover, Robert K. Greenleaf confirms the need of management awareness by comparing it to an iceberg. He advises leaders to use our head to explore all of our thoughts and ideas that are below the surface (Greenleaf, 1996). Conversely, inflexible management awareness reveals the mind-set of, “we know all we need to know about management, I do not want to change”.


Change requires spontaneity. Anantaraman (1993) suggests leaders encourage team-members to embrace a “holistic” approach to organization by viewing it as a “human system” (p.23). The rapid evolution of technology is transforming the workplace into a complex global network of transactional enterprises. Less than ten years ago, “everyone preached going to the gemba” (Bruce & Howes, 2006, p. 28), which is the lean manufacturing floor. Now the gemba is in our hands by way of a mobile device. Lengthy improvement strategies and objective are becoming obsolete. Real-time dashboards and business analytics allow team-members to make changes as industry behaviors shift. The concept of uncertainty is not a concept that can be navigated by a one size fit all solution. It will depend on the leader’s ability to manage, stabilize, and resolve conflicting values and priorities within the organization (Solovjovs, 2008).

Jesus tells us, in Matthew 6:25-34, “Therefore I say unto you, Take no thought for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than meat, and the body than raiment?” (KJV). As leaders, our assignment in the market place must reflect the same faith as in our personal lives. We make informed decisions based on wisdom, knowledge, and faith in Jesus Christ.

Areas of Future Study and Limitations

Future areas of study in contextual leadership and organizational change may include human resource practices and promotional criteria. What is the balance between team success and individual success when there is only one promotional position? What are the implications for training in chaotic environments? Will leadership promotions be reassigned between individuals or changed? How are individuals hired to leadership positions, given what we observe in our current economic environment?

An area of study that is frequently not covered concern personal improvement leadership situations where the goal is not something that can be qualified, but more quantified. These are situations that one would find within a pastor-congregant leadership scenario or within a 12-step group between the sponsor and sponsored. Some of the research questions might be: have the follower’s commitment, knowledge, and/or behavior evolved or devolved with the change in leader based on the follower’s situation? How important is the goal (in a 12-step situation) of getting/remaining sober relative to the leader? Will introducing a new sponsor have any effect on the follower’s sobriety?

As for the limitations of situational leadership, there are several. There is very little foundational reviewed research to support the concepts. A detailed longitudinal study from multiple institutions would go a long way to backing up the theory with quantifiable data. The theory is ambiguous in defining specific phases of leadership and development levels of followers. It fails to define growth from low-to-high commitment levels of team members creating more ambiguity. Linking leadership styles to team-member’s growth is uncertain. The demographics of teammates-leadership preference and group settings versus one-on-one interaction remain undefined (Northouse, 2013).


It was stated that national economies are becoming more globalized. The economic stability of one nation is intimately tied to that of another. Nothing shows this truth more clearly than the Greek economic crisis of 2010. The insolvency of Greece directly affected the stability of the Euro and every nation that adopted the Euro as its currency. Leadership models must be able to change as the global economy shifts to unpredictability. As leaders, our focus must transform to meet the needs of market instability.

Contextual leadership is a system that embraces a holistic perception of the organization; it emphasizes flexibility, awareness, and spontaneity. It can be used by any leader to make a decision and predict a high likelihood of a favorable outcome.


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