Which theory of leadership suggests that leaders are effective when they balance concern for people and tasks?

The Managerial Grid is the framework that emphasizes the importance of balancing concern for people and concern for tasks to optimize leadership effectiveness. Developed by Robert Blake and Jane Mouton in the early 1960s, the grid categorizes leadership styles based on a leader's focus on accomplishing tasks versus their focus on maintaining good relationships with their team members.

According to this theory, the most effective leaders are those who can find a balance between these two aspects. A high concern for tasks ensures that objectives are being met, while a high concern for people fosters a supportive and collaborative environment. This balance leads to improved motivation, higher morale, and better overall performance from the team.

In contrast, other leadership theories focus on different aspects of leadership effectiveness. The Behavioral theory addresses what specific behaviors distinguish effective leaders, without specifically emphasizing the balance between task and people orientation. Contingency theory suggests that the effectiveness of a leadership style depends on the context or situation, while Path-goal theory focuses on how leaders can motivate followers to achieve specific goals. However, the unique contribution of the Managerial Grid is its clear delineation of the importance of balancing both concerns, making it the correct answer to the question.