Situational and Exchange theories

A leadership model that has gained a strong following among management development specialists is called situational leadership theory (SLT)—has been incorporated into leadership training programs at over 400 of the Fortune 500 companies; and over one million managers a year from a wide variety of organizations are being taught its basic elements.

Situational leadership is a contingency theory that focuses on the followers. Successful leadership is achieved by selecting the right leadership style, which is contingent on the level of the followers’ readiness. Before we proceed, we should clarify two points: Why focus on the followers? And what do they mean by the term readiness?

The emphasis on the followers in leadership effectiveness reflects the reality that is followers who accept or reject the leader. Regardless of what the leader does, effectiveness depends on the actions of the followers. This is an important dimension that has been overlooked or under emphasized in most leadership theories. The term readiness, as defined by Hersey and Blanchard refers to the event to which people have the ability and willingness to accomplish a specific task.

SLT essentially views the leader-follower relationship as analogous to that between a parent and a child. As parents need to relinquish control when the child becomes more mature and responsible so too should the leaders. The most effective behavior depends on a follower’s ability and motivation. So SLT says if a follower is unable and unwilling to do a task, the leader needs to give clear and specific directions: if followers are unable and willing. The leader needs to display high task orientation to compensate for the followers’ lack of ability and high relationship orientation to get the followers to buy into the leader’s desires; if followers are able and unwilling, the leaders needs to use a supportive and participative style; and if the employees are both able and willing the leader doesn’t need to do much.

SLT has an intuitive appeal. It acknowledges the importance of followers and builds on the logic that leaders can compensate for ability and motivational limitations in their followers. Yet research efforts to test and support the theory have generally been disappointing and inconsistencies in the model itself as well as problems with research methodology in tests of the theory. So, in spite of its intuitive appeal and wide popularity, any enthusiastic endorsement at least at this time, has to be cautioned against.

The theory proposes that early in the history of the interaction between a leader and a given follower, the leader implicitly categorizes the follower as an in or an out and that relationship is relatively stable over time. Leaders induce LMX by rewarding those employees with whom thy want a closer linkage and punishing those with whom they do not. But for the LMX relationship to remain intact, the leader and the follower must invest in the relationship.

Just precisely how the leader chose who falls into each category is unclear, but there is evidence that leaders tend to choose in group members because they have attitude and personality characteristics that are similar to the leader’s or a higher level of competence than out group members. For example, followers who have a mastery orientation develop closer leader member exchanges because such employees turn to their supervisors for sources of valuable information and experience that can provide employees with prospects for skill development and self improvement that can further benefit the company. However, communicating frequently with a supervisor appears to be helpful only for high LMX employees, probably because supervisors receive frequent communication from low LMX employees as annoying and a waste of their time. The key point to note here is that even tough it is the leader who is doing the choosing, it is the follower’s characteristics that are driving the leader’s categorizing decisions.

Few followers would want to be outside a leader’s inner circler. There is a danger to being part of the inner circle, your fortunes may rise and fall with your leader. When CEOs are ousted, for example, their inner circle usually goes with them. When Tyco CEO Dennis Kozlowski was given the boot, eventually his closest associate, CFO Mark Swartz, was also forced to resign, although he has well regarded on Wall Street and was thought to be one of the executives who best understood the intricacies of Tyco’s business. —