The Core Leadership Styles In The Business World

Leadership styles encompass the behavioral qualities of a leader. These qualities are commonly used to direct, motivate, or manage groups of people. Some of the most recognized leadership styles include Autocratic, Democratic, or Laissez-Faire leadership styles.

Understanding leadership styles

While there are many great leaders in the world, each leader could attribute their success to a somewhat unique blend of qualities. Some of these qualities are expressions of a leader’s personality, while others are embodied by the organization itself.

As a result, little was known about leadership styles until a 1939 study led by psychologist Kurt Lewin. In the study, Lewin identified three distinct styles:

  1. Authoritarian leadership (Autocratic) – encompassing leaders who provide clear expectations on what needs to be done and how it should be performed. Authoritarian leaders make decisions independently and exercise total control over subordinates. 

This form of leadership is suited to situations that call for rapid decision making or where the leader is the most knowledgeable person in a group. However, these decisions tend to be lacking in creativity and can cause dysfunctional, hostile environments.

  1. Participative leadership (Democratic) – Lewin found that participative leadership was the most effective. Leaders exhibiting this style offer guidance to subordinates while encouraging member input – which tends to be of a higher quality.

Although the leader reserves the right to make the final decision, subordinates nonetheless feel engaged in the decision-making process. As a result, they are more likely to work toward company goals with commitment and passion.

  1. Delegative leadership (Laissez-Faire) – the least productive of Lewin’s three leadership styles. Study participants tended to make unreasonable demands of the leader and did not display cooperation or the ability to work independently.

Indeed, delegative leaders mostly leave the decision-making process to group members. While this style is commonly seen in start-ups, poorly defined roles usually lead to a lack of motivation and group consensus. Without adequate leadership, subordinates lack accountability and make little progress in producing meaningful work.

Additional leadership styles

In the decades since the original Lewin study, several other leadership styles have been identified to reflect modern, dynamic businesses. 

Some may deliberately choose to adopt a mix of several different styles depending on the context.

Some of the more common include:

  • Transformational leadership – first developed during the late 1970s and seen as one of the most effective modern styles. Leaders are typically passionate and emotionally intelligent. They have a vested interest in their subordinates and the company as a whole. They also tend to delegate important tasks and inspire others with infectious enthusiasm. Bill Gates and the late Steve Jobs exemplify the transformational leadership style.
  • Transactional leadership – where subordinates obey their leader on the proviso that they are compensated for doing so. Job satisfaction is typically low under transactional leadership because compensation can be removed for non-compliance. Many experts view this form of leadership as a management style because the focus is on short-term tasks. Some military commanders and professional sports coaches use transactional leadership.
  • Pacesetter leadership – the most effective at delivering fast results. Pacesetter leaders focus on setting high-performance standards and hold subordinates accountable for achieving goals. Given the motivational nature of the style, it is better suited to fast-paced, high-pressure environments where employee energy needs to be high. Former General Electric CEO Jack Welch is a great example of pacesetter leadership. Welch believes that leaders need to focus on setting a good example and be obsessed with efficiency. 

Key takeaways

  • Leadership styles encompass certain behavioral qualities that are used to motivate or manage subordinates. 
  • Leadership styles were first studied by psychologist Kurt Lewin in 1939. The results of his study found that leadership could either be authoritative, participative, or delegative in nature.
  • Leadership styles have evolved since the original study to encompass modern businesses that may need to exhibit more than one leadership style. Transformational leadership, embodied by Bill Gates and Steve Jobs, is widely regarded as one of the most effective.

Leadership Glossary

Agile Leadership

Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Adaptive Leadership

Adaptive leadership is a model used by leaders to help individuals adapt to complex or rapidly changing environments. Adaptive leadership is defined by three core components (precious or expendable, experimentation and smart risks, disciplined assessment). Growth occurs when an organization discards ineffective ways of operating. Then, active leaders implement new initiatives and monitor their impact.

Delegative Leadership

Developed by business consultants Kenneth Blanchard and Paul Hersey in the 1960s, delegative leadership is a leadership style where authority figures empower subordinates to exercise autonomy. For this reason, it is also called laissez-faire leadership. In some cases, this type of leadership can lead to increases in work quality and decision-making. In a few other cases, this type of leadership needs to be balanced out to prevent a lack of direction and cohesiveness of the team.

Distributed Leadership

Distributed leadership is based on the premise that leadership responsibilities and accountability are shared by those with the relevant skills or expertise so that the shared responsibility and accountability of multiple individuals within a workplace, bulds up as a fluid and emergent property (not controlled or held by one individual). Distributed leadership is based on eight hallmarks, or principles: shared responsibility, shared power, synergy, leadership capacity, organizational learning, equitable and ethical climate, democratic and investigative culture, and macro-community engagement.


Micromanagement is about tightly controlling or observing employees’ work. Although in some cases, this management style might be understood, especially for small-scale projects, generally speaking, micromanagement has a negative connotation mainly because it shows a lack of trust and freedom in the workplace, which leads to adverse outcomes.

RASCI Matrix

A RASCI matrix is used to assign and then display the various roles and responsibilities in a project, service, or process. It is sometimes called a RASCI Responsibility Matrix. The RASCI matrix is essentially a project management tool that provides important clarification for organizations involved in complex projects.

Organizational Structure

An organizational structure allows companies to shape their business model according to several criteria (like products, segments, geography and so on) that would enable information to flow through the organizational layers for better decision-making, cultural development, and goals alignment across employees, managers, and executives. 

Tactical Management

Tactical management involves choosing an appropriate course of action to achieve a strategic plan or objective. Therefore, tactical management comprises the set of daily operations that support long strategy delivery. It may involve risk management, regular meetings, conflict resolution, and problem-solving.

High-Performance Management

High-performance management involves the implementation of HR practices that are internally consistent and aligned with organizational strategy. Importantly, high-performance management is a continual process where several different but integrated activities create a performance management cycle. It is not a process that should be performed once a year and then hidden in a filing cabinet.

Scientific Management

Scientific Management Theory was created by Frederick Winslow Taylor in 1911 as a means of encouraging industrial companies to switch to mass production. With a background in mechanical engineering, he applied engineering principles to workplace productivity on the factory floor. Scientific Management Theory seeks to find the most efficient way of performing a job in the workplace.

Change Management


TQM Framework

The Total Quality Management (TQM) framework is a technique based on the premise that employees continuously work on their ability to provide value to customers. Importantly, the word “total” means that all employees are involved in the process – regardless of whether they work in development, production, or fulfillment.

Agile Project Management

Agile Management
Agile Project Management (AgilePM) seeks to bring order to chaotic corporate environments using several tools, techniques, and elements of the project lifecycle. Fundamentally, agile project management aims to deliver maximum value according to specific business priorities in the time and budget allocated. AgilePM is particularly useful in situations where the drive to deliver is greater than the perceived risk.

Read Next: Organizational Structure.

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