RBI Grade B Exam Situational Theory - Must Know Important Concepts and Theories

By Gaurav Tripathi|Updated : May 16th, 2022

Management is an important section of the RBI Grade B exam for Phase 2. You must start preparing for that section as early as possible to stay ahead in the race of grabbing the best job in RBI. With an effective preparation strategy, you can target the RBI Grade B exam.


Today we will be discussing Situational Theory which is a topic under the leadership chapter of the Management section of RBI Grade B exam.

Table of Content

You can check the RBI Grade-B previous year paper to know the types of questions asked from this chapter.             

RBI Grade B Exam: Situational Theory /Contingency Theory

The theory identifies four main leadership approaches:

  • Telling: Directive and authoritative approach. Here the leader will make every decision and the employees have to follow that.
  • Selling: The decision-maker remains the same, but instead of simply directing the employee, he speaks with them and strives to persuade them.
  • Participating: The team's leader collaborates with the team members to make decisions. He is more democratic and supports and promotes them.
  • Delegating: The leader delegates the decision-making authority to team members while monitoring their progress.

In this theory, prime attention is given to the situation in which the leadership is exercised. Therefore, the effectiveness of leadership will be affected by the factors associated with the leader and the factors associated with the situation. The various factors affecting leadership effectiveness can be classified into 2 major categories

  • Leaders behavior
  • Situation factors

Leaders Behaviour

The behavior of a leader is affected by two variables i.e. his characteristics and his hierarchical position in the Organisation.

  1. Leaders Characteristic: -
  • All these factors are internal for a leader.
  • The behavior of a leader is influenced by intelligence and ability, physical characteristics, and personal characteristics.
  1. Leaders Hierarchical Positions
  • The hierarchical position of a leader in the Organisation is important to understand the degree of participation between superior and subordinate in arriving at a decision to solve the problem.
  • Higher-level managers are concerned with long-run complex problems which require more participation in decision making.
  • Low-level managers are concerned with short-run problems involving daily operations which may not require a higher level of participation

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Situational Factors

Leadership effectiveness is affected by situational factors as these factors affect leaders' behavior. The various situational factors may be grouped into four categories: subordinate characteristics, leader situation, group factors, and organizational factors.

  1. Subordinate’s Characteristics 
    • Various factors which affect a leader’s behavior are the behavior of subordinates.
  2. Leader's situation: the leader's situation with respect to his subordinate is an important factor affecting leadership effectiveness. The two main variables which determine a leader's situation are:
  • Leader position power
    • Leader position power helps in influencing others, high position power of a leader makes the task easy to influence others while low position power makes the task difficult.
  • Leader subordinate relations
    • It is based on two-way influence in a social relationship.
    • Good followers need to succeed in their own job with the help of leaders while helping leaders to succeed at theirs.
    • Thus if a leader has good relations with subordinates he is likely to be more effective.
  1. Group Factors:
    • Various group factors like task design group composition group norms group cohesiveness and peer-group relationships affect leadership effectiveness and performance. If these factors are favorable the leader will be effective
  2. Organizational factor
    • organizational factors like org climate and org culture affect leadership effectiveness. If these are conducive the leader will be effective.

Key Factors

According to experts, there are four crucial contextual aspects that leaders must consider while assessing the issue.

Consider the Relationship

The relationship between the leaders and the members of the group must be considered by the leaders. Social and interpersonal aspects can influence which strategy is most effective.

Consider the Task

The task itself must be considered by the leader. Tasks might be simple or complex, but the leader must have a clear understanding of what the assignment includes in order to judge whether it was completed properly and competently.

The leader's level of influence over the members of the group should also be examined. Some leaders have the authority to fire, employ, reward, or chastise subordinates simply because of their position. Other leaders develop influence through cultivating relationships with staff, frequently by earning their respect and providing support.

Consider the Level of Maturity

Leaders must take into account the maturity level of each group member. The maturity level is a measurement of a person's capacity to finish a task as well as their willingness to do so. It's a recipe for disaster to assign a job to a member who is willing but not capable.

Also, Check: 

Related Links:

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RBI Grade B exam Study Material 2022

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RBI Grade B exam Preparation Tips 2022

RBI Grade B exam Question Papers

RBI Grade B exam Books 2022

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write a comment
Prabhjot Kaur
Jashan Deep

Jashan DeepMar 14, 2018

Ty mam👍

manish Mar 14, 2018

Thanks mam
Anup Kumar

Anup KumarMar 14, 2018

@Priyanshu Maheshwari Mam will🤔 U provide the study materials for Nabard Grade A officers especially for👉Economic & Social Issues and Agriculture & Rural Development (with focus on Rural India)?????? Or 🤔 any other mentor will provide it ????? Plz 🙏🙏🙏🙏 reply Mam 👍👍
Funny Video

Funny VideoMar 14, 2018

Mam, can you please tell the whole syllabus of management with its section also. Plz mam
@Priyanshu Maheshwari
Megha Deshmukh
Can anyone please share phase 1 , 2 previous year question paper link. I am unable to find it anywhere. Thank you
Anurag Gaur
Please mock test sabse saste kahi bataye
Abdul Abdul

Abdul AbdulApr 11, 2022



  • Situational leadership theory is often referred to as the Hersey-Blanchard Situational Leadership Theory, after its developers, Dr. Paul Hersey, author of "The Situational Leader," and Kenneth Blanchard, author of "One-Minute Manager."Telling, selling, participating, and delegating are the 4 leadership approaches according to situational theory.

  • On our app, you can practice Contingency theory MCQs for the RBI Grade B exam 2022. Solve daily quizzes and free mocks available on the app to develop a holistic understanding of the topic.

  • In this article, we have provided situational theory concepts for the RBI Grade B exam. Moreover, you can consult our study material and take live courses for understanding each topic in a comprehensive manner.

  • For scoring higher marks, focus on solving free mock tests and quizzes on regular basis. Solve previous year's question papers and assess your performance. You must know the syllabus well and prepare a detailed study plan for each section.

  • RBI Grade B exam 2022 is one of the most prestigious exams in India. It requires determination and consistency because of the immense competition in the exam, With proper guidance and approach, you can crack this exam in the first attempt.

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tags :Regulatory BodiesFinance and ManagementRBI Grade B OverviewRBI Grade B Exam AnalysisRBI Grade B Cut OffRBI Grade B Question PapersRBI Grade B Admit Card

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tags :Regulatory BodiesFinance and ManagementRBI Grade B OverviewRBI Grade B Exam AnalysisRBI Grade B Cut OffRBI Grade B Question PapersRBI Grade B Admit Card

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