An article I have found very helpful, I trust you do too, by Leigh Anthony, Demand Media:
Situational leadership is a leadership style that has been developed and studied by Kenneth Blanchard and Paul Hersey. Situational leadership refers to when the leader or manager of an organization must adjust his style to fit the development level of the followers he is trying to influence. With situational leadership, it is up to the leader to change his style, not the follower to adapt to the leader’s style. In situational leadership, the style may change continually to meet the needs of others in the organization based on the situation.
Telling And Directing
In telling/directing, the leader of the organization is the one making the decisions and informing others in the organization of the decision. This style of leadership may also be referred to as micro-management as the leader is very involved and closely supervises the people who are working. With this style of leadership, it is a very top-down approach and the employees simply do exactly what they are told.
Selling And Coaching
With the selling and coaching style of leadership, the leader is still very involved in the day-to-day activities. The decisions still ultimately lie with the leader, however, input is requested from the employees before the decision is implemented. With this style of situational leadership, employees are still supervised but it is in more of a coaching manner rather than a management manner. This style typically works well with those who are inexperienced and still learning. It involves direct praise to increase their confidence and self-esteem.
Participating And Supporting
The participating and supporting style of situational leadership passes more responsibility to the employers or followers. While the leader still provides some direction, the decisions ultimately lie with the follower. The leader is there to provide feedback and to increase their confidence and motivation with praise and feedback for the tasks completed. Those who work well under this style of situational leadership have the necessary skills but lack the confidence or motivation to achieve them.
Delegating is the situational leadership style where the leader is involved the least amount with the employees. The employees are responsible for choosing the tasks and the directions they will take. Although the leader may still be involved for direction or feedback purposes, it is on a much lower level than with other situational leadership styles. With this style of leadership, the employees know their role and perform it with little supervision required.
The development level of the follower determines the situational leadership style of the leader. Blanchard and Hersey have developed a matrix so that leaders can easily determine the leadership style needed by the employee based on their development level. For those with high needs and little experience, the directing style will be necessary whereas with those with low needs and high competence, the delegating style can be used.