Leadership and management theories - Situational leadership ...

Learning Outcomes

This article explains situational leadership theory and the different bases of managerial power for ACCA Business and Technology (BT). You will learn how leaders adjust their style to the readiness of staff, the core principles of contingency leadership, and the five main sources of managerial power. By the end, you should be able to apply situational approaches to leadership scenarios and identify power bases in business contexts.

ACCA Business and Technology (BT) Syllabus

For ACCA Business and Technology (BT), you are required to understand both leadership theories and the application of power in organisations. In particular, you should know:

• The difference between management and leadership, and how the two overlap in practice
• Situational/contingency leadership theories and their practical application
• The concept of leader–member readiness: how leaders adjust styles based on team maturity
• The main types or "bases" of power (French and Raven): reward, coercive, legitimate, expert, and referent
• How different power bases affect influence, motivation, and control in the workplace

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. According to situational leadership theory, what two main factors does a leader consider before deciding which leadership style to use with a team?
2. Match the following power bases with their example:
   • a) Reward power
   • b) Expert power
   • c) Coercive power
   • d) Legitimate power
   • e) Referent power i. The ability to give promotions or raises
     ii. Authority due to the leader’s recognised specialist knowledge
     iii. Right to discipline staff
     iv. Authority given by position in the hierarchy
     v. Influence based on personal admiration
3. True or false? Under contingency/situational theories, one leadership style is always best in every situation.
4. Provide one scenario in which a leader might select a highly directive style and one in which a more delegative style is appropriate, according to situational leadership principles.

Introduction

Leadership in business means influencing people to achieve organisational goals. Effective leaders must not only set direction but also choose the best way to influence, motivate, and guide others. Unlike traditional approaches that use a single fixed style, situational leadership argues that managers must vary their approach depending on factors such as the team’s ability and willingness, the nature of the task, and specific business needs.

Key Term: situational leadership
A leadership approach where the leader adjusts their style of directing, coaching, supporting, or delegating according to the readiness or maturity level of their team.

THE SITUATIONAL (OR CONTINGENCY) APPROACH TO LEADERSHIP

What is situational leadership?

The situational leadership approach (sometimes called “contingency leadership”) argues that there is no single "best" way to lead. Instead, a leader’s effectiveness depends on how well their behaviour matches the needs of the group or the task at hand.

Leaders must assess two main things:

1. The capability and confidence of their team members (sometimes called "maturity" or "readiness")
2. The level of direction and support the group requires at any given time

Key Term: contingency theory (of leadership)
The idea that leadership effectiveness depends on matching leadership style to situational variables, such as task structure and team readiness.

The Situational Leadership Model (Hersey and Blanchard)

The best-known situational model divides leadership behaviour into four styles, based on the level of direction and support given:

Leaders must judge the readiness of their staff and adjust accordingly.

Worked Example 1.1

A manager is supervising two teams: Team A is new to the company, and Team B has a track record of high performance with similar tasks. How should the manager approach each team?

Answer:
For Team A, use a telling/directing style (clear instructions, close monitoring); for Team B, a delegating style (give authority, minimal supervision).

THE BASES OF POWER

For a leader to influence others, they must have some form of power. French and Raven identified five key sources (“bases”) of power:

Key Term: power base
The source from which an individual derives the ability to influence others in an organisation.

Key Term: reward power
Influence based on the ability to provide valued rewards (e.g., pay, promotion).

Key Term: coercive power
Influence stemming from the ability to punish or sanction (e.g., discipline, withholding rewards).

Key Term: legitimate power
Influence due to formal position or authority within the organisational hierarchy.

Key Term: expert power
Influence gained from special knowledge or skills recognised by others.

Key Term: referent power
Influence based on personal traits or perceived attractiveness—others identify with, trust, or admire the person.

Examples of Power Bases

• Reward power: A sales manager offers bonuses for hitting targets.
• Coercive power: A supervisor threatens disciplinary action for lateness.
• Legitimate power: A finance director issues a mandatory change in policy.
• Expert power: An IT specialist is consulted due to their technical skills.
• Referent power: A well-liked senior colleague influences colleagues' behaviour without formal authority.

Worked Example 1.2

Sara, a project leader, consistently meets deadlines and has in-depth product knowledge. Team members respect her skills and come to her for guidance. What is the main power base Sara is using?

Answer:
Expert power—Sara’s influence comes from her specialist knowledge and experience.

Exam Warning

Many students incorrectly assume that only managers can have power in an organisation. Remember: anyone with specialist knowledge, strong relationships, or unique skills can exert influence—regardless of formal authority.

MATCHING LEADERSHIP STYLE TO SITUATION

Situational leadership requires managers to:

• Diagnose the development level of individuals or teams
• Use the matching leadership style: more directive when staff lack skills/confidence; more supportive or delegative as staff become able and motivated

Application Table

Worked Example 1.3

Michelle supervises an experienced team confident in their abilities. If she remains highly directive, what risk does this create?

Answer:
Team members may feel micromanaged and demotivated; a delegating approach would be better.

Power Base Selection

Effective leaders use different power bases depending on the situation:

• Use reward and legitimate power for tasks with clear targets or rules.
• Apply expert and referent power to motivate and influence when technical respect or personal trust is needed.
• Coercive power should be reserved for addressing misconduct or compliance.

Revision Tip

Focus on understanding the difference between each power base and when each is most effectively (and ethically) used in a real work setting.

Summary

Situational leadership means tailoring your style to the group’s needs, balancing direction and support based on team maturity. Power in organisations comes from more than authority—reward, coercive, legitimate, expert, and referent power all play distinct roles. Recognising and choosing the right combination of leadership style and power base is essential for effective influence and motivation in business.

Key Point Checklist

This article has covered the following key knowledge points:

• Define situational (contingency) leadership and explain its importance
• Outline the four main situational leadership styles and when to use each
• Identify and describe the five main power bases: reward, coercive, legitimate, expert, referent
• Connect leadership style and power base selection to staff ability and workplace context
• Recognise common exam pitfalls around leadership and power concepts

Key Terms and Concepts

• situational leadership
• contingency theory (of leadership)
• power base
• reward power
• coercive power
• legitimate power
• expert power
• referent power