Different Leadership Styles and Models in Management and Business
Leadership comes in all shapes and sizes. In the corporate world, companies have the potential to thrive under various styles of leadership. Business schools the world over describe the many ways in which leaders can take the reins of a company. However, this may raise questions about which leadership style is best for you.
Do you want to find out more about the many different leadership styles for business management? In this guide, we will describe each of the most prominent business leadership models and the various advantages and disadvantages that they have. In doing so, you can gain a better idea as to which may work best for you.
Most meritocratic corporations these days involve some form of transactional leadership. This is because transactional leaders offer rewards for good performance and levy punishments for poor performance. In effect, this incentivizes efficient workplace behavior and discourages inefficient or ineffective performance.
The basic “transaction” at the heart of this leadership style is the transaction between the team leader and the employee. When the employee is placed under this leadership style, they are made aware of the fact that they can receive a benefit in return for work performance. Therefore, a rational incentive is provided for meeting and exceeding performance standards.
Today, pay-for-performance models of transactional leadership are becoming increasingly common in public and private sector workplaces. However, critics allege that this leadership style only encourages short-term task achievement and fails to provide an incentive for employees to branch out, take risks, or realize their full potential.
When you take the transactional leadership style to its logical end, you get the autocratic leadership style. Autocratic leaders exert dominant and sometimes ruthless executive control over their employees and team members. Under this arrangement, there is little to no dispersion of power—rather, all decision-making authority rests with the one team leader.
In most cases, employees do not appreciate autocratic leaders, which tends to result in higher turnover rates in the workplace. When autocratic leaders are too heavy-handed, workers become disgruntled and often resent their bosses. This is partially due to the fact that autocratic workplaces do not allow employees to speak up and voice their own perspective on issues.
We often find autocratic leadership styles in public sector environments. For example, autocratic leaders are commonplace in the military and in the executive branch of a government.
Opposite of autocratic leadership is democratic leadership. Democratic leaders are able to naturally command the respect of their employees and team members. This is because democratic business leaders include multiple perspectives when forming decision. In fact, most democratic leaders conduct a consensus-based decision-making procedure.
Usually, employees value working for democratic leaders because they feel as though their voice is heard and concerns are taken seriously. When employees feel included in decision-making processes, they are more likely to remain with the company in the long term.
Team engagement is high within corporate structures that employ a democratic leadership model. This is one of the key advantages of this style of leadership. However, democratic leadership can be a detriment if decisions need to be made quickly or if compromise or unity cannot be reached on mission critical issues.
Servant leadership is one of the primary forms of charismatic leadership. Servant leaders are selfless in that they tend to work long hours, exceed workplace performance standards, and generally lead by example whenever possible. Employees appreciate working for servant leaders because they are made to feel like they are of equal status to their bosses.
Many workplaces that are headed by servant leaders report higher than average workplace satisfaction and productivity levels. This is because, of the many different leadership styles, servant leaders are most able to make their employees feel valued and cared for. Therefore, they are more willing to collaborate and take a team-based approach to projects.
One of the few downsides to servant leaders is that they tend to over-exert themselves in trying to make everybody happy in the workplace. As many good business leaders know, it is impossible to satisfy the intricate needs and wants of everyone. This is one area in which servant leaders tend to struggle or lag behind their less servantly counterparts.
Transformational leaders are among the most effective in the corporate world. This is because transformational leaders keep an overarching goal in mind from the moment they clock in to the minute they leave the office in the evening: to constantly improve. Leaders of this kind are true visionaries that are always seeking out new ways to innovate and problem solve.
Like other leadership styles, transformational leaders must be mindful of conflict management while they are in the office. Business leaders very often find that they must quickly and effectively manage workplace disputes and arguments, and transformational leaders need to be extremely vigilant about not allowing disputes to get in the way of executing their vision.
When it comes to transforming a workplace environment, leaders need to be willing to relentlessly pursue their objectives without becoming discouraged by regular hang-ups. Furthermore, transformational leaders need to be able to generate the respect of their employees. Otherwise, their workers will not be willing to carry out their leader’s plan.
Universal leaders, otherwise known as “cross-cultural leaders”, are those who can skillfully navigate the muddy waters of the multicultural workplace. On occasion, conflicts and disputes can arise between workplace members of different cultural backgrounds. Since every culture has its unique set of values, employees can clash over value-based differences.
When a universal leader takes charge, they must be able to overcome language barriers and other obstacles that get in the way of effective communication. In today’s globalized labor market, more and more diverse cultures are coming together in the workplace. Universal leaders, therefore, are becoming increasingly valued in the 21st-century office environment.
The ability to speak more than one language is a skill that is sought after in today’s world, and one that is commonly found in cross-cultural leaders. Further, universal leaders understand the values and norms associated with diverse cultures. Workplace diversity and inclusion workshops are great opportunities to learn universal leadership skills.
In the private sector, “bureaucrat” is sometimes seen as a dirty word. To many businesspeople, bureaucrats represent slow-moving and inefficient government workers that lack the ability to make free and expedient decisions. Therefore, bureaucracies tend to bog down the workplace and prevent meaningful work from being done in a timely manner.
If there is one principle that defines a bureaucratic leader, it is that they play by the rules. Bureaucratic leaders employ rules-based decision-making so that their workers can predict future moves within their department and become familiar and comfortable with how projects and decisions will be carried out.
Bureaucratic leaders rely on committees, panels, and routine. Often, bureaucratic leaders implement rules that require decisions to be subject to a committee of senior workers that can assess the problem from multiple angles. Bureaucratic leaders generally chair these committees, which allow them to guide discussion in an organized manner.
As one might imagine, bureaucratic leadership styles are less-than-ideal for generating creative problem solving or for making expedient decisions. However, bureaucracies are not designed for this purpose. Rather, this leadership style is designed to increase prudence and caution when it comes to making business decisions.
Also known as “laissez-faire leaders”, hands-off leaders those corporate leaders who allow their employees and team members to work at arm’s length of them. Hands-off leaders are those that give their workers plenty of freedom and creative liberty to execute the projects they want and in the manner they desire.
Laissez-faire style leaders are known for winning the respect and admiration of their employees. This is because their employees can express themselves as they desire and present their true selves to the coworkers and colleagues. Consequently, trust is easily built between members of a team or department in the office.
We do not recommend embracing a hands-off leadership style if you are new to a workplace environment. This is because new hires and unacquainted coworkers need strong direction and close collaboration if they want to develop the bonds of trust and solidarity that make a workplace truly effective.
How to Pick a Leadership Style for You
As we stated in the opening segment of this article, there is no supreme method of business leaders. The most innovative and effective business leaders are those who can competently blend all of the aforementioned leadership styles into one cohesive method.
We recommend taking tactics from each leadership style and combining them into something of your own. To do this, take note of the unique benefits inherent to each leadership style and gradually implement them into your business management practices.