Situational leadership theories view leadership as a process, with leaders and followers filling roles within the organization. Contingency theory states that, in order to maximize work group performance, leaders must be matched to the right leadership situation. Path-goal theory states that leaders can increase subordinate satisfaction and performance by clarifying and clearing the paths to goals and by increasing the number and kinds of rewards available for goal attainment. Normative decision theory helps leaders decide how much employee participation should be used when making decisions.
Many managers subscribe to the theory that leadership changes in every situation, and that the most effective leaders are adaptable to this change. This is based on a situational approach to leadership, and it gives managers the flexibility to seek results in an evolving environment. This course discusses the three main situational theories.