Final answer:
Discretion as a contingency of power is illustrated by middle managers' complaints about needing upper management approval for decisions, showing a limitation on their power.
Step-by-step explanation:
An example of discretion as a contingency of power is the frequent complaint of middle managers that they have limited power to make decisions without approval from upper management. Discretion refers to the freedom to make decisions within one's area of responsibility and the ability to exercise judgment. The lack of discretion, as experienced by middle managers who require upper management approval for decision-making, illustrates a limitation on their power, making discretion a vital element in the dynamics of organizational power and authority.