6 Notable Leadership Styles in Business

by | Oct 6, 2023

In this article
6 min read

How do you define a leader? Most will say that a leader commands from the front, while some may say that they bring the right attitude and spirit to a team. Yet another response would be that they bring responsibility and harmony within a group. All of these are generally considered to be the qualities of a great leader. Be it in politics, sports, or organizations, a leader aims to rally everyone toward a common goal.

When it comes to businesses, the intense competition that has become the norm has meant that the role of a leader in guiding their team has achieved even more significance.

Managers or Leaders play a significant role in shaping the culture of a company. It is an extremely challenging role wherein you need to maintain a balance between timely delivering what is expected and keeping your team motivated and productive.

Leadership Styles & Its Influence

effective Leadership Styles In Business

Employees can closely observe how their seniors and managers operate, and what methods they utilize to address problems and challenges. Such behaviors come under the concept of ‘leadership style’.

A person’s style of leadership gives an overview of how they implement and strategize plans that can meet stakeholders’ expectations without creating obstacles for the team. Knowing what kind of a leader you are will also enable you to make improvements to your management style for the betterment of the people reporting to you. Adding the beneficial qualities of a leadership style that suits you can add to your leadership persona.

Following are 6 notable leadership styles that are witnessed in organizations globally:

Laissez-Faire leadership

Have you had a manager who has full faith in whatever you do and trusts you to carry out your tasks and responsibilities dutifully? This is a basic overview of what Laissez-Faire leadership is. As leaders, they tend not to get deeply involved in tasks unless the situation demands so, and do not give instructions and commands.

The positives in this management style are that employees try to put in their best efforts, try to inject creativity into their tasks, and feel valued as team members. The downsides include a lack of clarity in roles and responsibilities, as well as new employees facing a challenge due to little to no guidance from other members.

Autocratic leadership

Although the word ‘autocratic’ has a negative tone to it, there are some obvious positive sides that can be seen in this form of leadership. A clear sense of direction and goals is there, as the leader is generally very knowledgeable; additionally, it can effectively neutralize the lack of experience within the team and proves effective in companies where tough decisions need to be taken frequently. However, the negatives outweigh the positives in this leadership style.

Common ones include lower morale, a culture of fear and tension, intimidation & micromanagement on the part of the leader, and singular decisions without input from other members. As a result, this management style is not sustainable.

Transformational leadership

Transformational leadership

A person displaying a transformational style of leadership motivates and inspires employees to achieve a common goal. They display a strong belief in their vision, which can empower employees to think and act along the same lines. Additionally, these leaders maintain the growth of an organization by encouraging creativity and skill development, thus massively improving productivity.

The downsides to this management style include employee burnout, and the leader placing company goals above employee growth, which can be harmful in the long run for the organization.

Transactional leadership

Transactional leadership

As the name suggests, a person practicing this leadership style assumes that employees are motivated by rewards and will set goals and responsibilities using this reward-and-punishment approach. Committed employees are well-rewarded in this case, and employees clearly understand the objectives and what is expected of them.

On the other hand, such leaders are not known to be good at team-building and developing friendships and harmony, while fear of punishment may adversely affect the functioning of certain employees.

Pacesetting leadership

Pacesetting leadership

A pacesetter is someone who leads a competition and defines the standards that are to be maintained. In business terms, pacesetting leaders are very ambitious and set high standards, ensuring that employees can take on demands and responsibilities accordingly. Experienced teams work well under a pacesetting leader, and they can frequently meet and exceed goals that boost morale and drive them to further success.

However, in many instances, the goals set by the leader may seem to be unreasonable to employees, and this creates a high-pressure, high-stress environment that can demotivate the team and degrade their efficiency.

Coaching leadership

Coaching leadership

The answer’s in the name itself. Coaching leaders focus on each member of the team and identify and nurture their talents, leading to the collective growth of the team. Managers following this leadership style offer substantial guidance to employees and conduct frequent meetings to offer constructive feedback on their performance. Such leaders help in encouraging creativity and skill development, and they are considered mentors by employees even if they leave the organization.

A potential downside to this style is that it may take a lot of time and effort to improve and develop employees; additionally, some employees may feel that mentoring is too obstructive.

To End

These are 6 of the notable forms of leadership that people display in organizations. The habits and attitudes of a person help in determining what kind of leader they will become. The best thing about this is that one can look at the management styles of different leaders and understand how to select the best traits from them.

Additionally, while it may take some time, leadership style can be changed drastically, if improvements are required and the results are not impactful. To become an effective leader, know your strengths and weaknesses, and frequently ask for feedback from colleagues.

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