Fiedler studied the relationship between style of leadership and effectiveness of the work group. Two styles of leader were identified.

• Psychologically distant managers (PDMs).
  • Maintain distance from their subordinates by formalising roles and relationships within the team.
  • Are withdrawn and reserved in their interpersonal relationships.
  • Prefer formal communication and consultation methods rather than seek informal opinion.
  • Judge subordinates on the basis of performance and are primarily task-orientated.
  • Fiedler found that leaders of the most effective work groups actually tend to be PDMs.

• Psychologically close managers (PCMs)
  • Do not seek to formalise roles and relationships.
  • Prefer informal contacts to regular formal staff meetings.
  • They are more concerned to maintain good human relationships at work to ensure that tasks are carried out efficiently.
  • Fiedler concluded that a structured (or psychologically distant) style works best when the situation is either very favourable or very unfavourable to the leader.
  • On the other hand, a supportive (or psychologically close) style works best when the situation is moderately favourable to the leader.
  • He further suggested that group performance would be contingent upon the appropriate matching of leadership styles and the degree of favourableness of the group situation for the leader.

• The relationship between the leader and the group (trust, respect and so on).
• The extent to which the task is defined and structured.
• The power of the leader in relation to the group.

Fiedler suggested that a situation is favourable to the leader when the leader is liked and trusted by the group, the tasks of the group are clearly defined and the power of the leader to reward and punish the team, with organisational backing, is high.

This is an example of a contingency approach to leadership.