What Is Leadership Style? Analyzing the Five Popular Styles

Leadership is the key foundation of any successful organization. The right leadership can make or break a company’s progress and strength in the market.

In simple terms, leadership is the unique ability to understand people’s motives and leverage them to achieve a common shared vision or goal. However, leadership is not a one-size-fits-all approach.

The type of leadership initiatives necessary for an organization depends on many factors, including the nature of the business, the size of the company, the industry it operates, the stage of growth, the skill level of employees, and even the geographic location of business operations.

For example, a new startup company may need a leader who has more visionary perspectives to establish the brand in the market, whereas a stable brand will need a leader who can help maintain momentum in the industry ensuring sustainability to keep up with fierce competition.

The wrong leadership approach directly impacts employee performance, which in turn has a negative effect on customer satisfaction and the achievement of organizational growth.

This article will uncover the meaning of what is leadership style and analyze 5 commonly used styles across different organizational formats.

What is Leadership Style?

Leadership style refers to the methods, characteristics, behaviors, personalities, and strategies a person uses when directing, motivating, and managing a team. It also covers the approach a leader uses when strategizing and implementing plans while ensuring they meet the expectations of the stakeholders and the overall well-being of the workforce.

Leadership style reflects how a leader manages a team, makes decisions, and interacts with employees within the company. Anyone trying to understand what leadership style should be aware that it is something that is shaped by many factors. This includes personality, values, perspectives, skills, and most importantly experience.

In the modern world, where business markets are subject to dynamic changes and inevitable competition, leaders express a wide range of styles, adapting to different situations. However, every leader will have a pre-eminent style that they prefer to use and express more often than others.

Thoroughly understanding what is leadership style, and the one that best suits an organizational context requires time, trial, and a clear analysis of an organization.

Here is a simple analysis of the five most commonly used leadership styles and contexts where they are seen as ideal to apply.

1. Autocratic Leadership

Also known as authoritarian leadership, autocratic leaders provide clear expectations for the team's work. They also provide a clear pathway for how things should be done and by when. This leaves less room for errors by subordinates who follow the leader.

This leadership style is heavy and strongly focused on both command by the leader and control of the followers. As autocratic leadership involves independent decision-making with little to no input from the members, there is a clear division between the leader and the followers.

Pros

• Quick decision-making
• Clear direction
• Improved efficiency

Cons

• Lack of employee input
• High turnover
• Employee dissatisfaction / low engagement

The Right Time to Use It

This leadership style is more suitable in a context where leaders have to deal with inexperienced staff in a crisis or urgent situation. It can provide clear direction to staff in situations that require fast actions or performance.

2. Democratic Leadership

Also known as participative leadership, this style features characteristics opposite to autocratic leadership. It is also considered the most effective leadership style in many modern organizational contexts, requiring innovation and creativity.

It is where the leader offers guidance to subordinates but also allows them to participate in decision-making and give their free opinions, promoting the concept of democracy.

Democratic leaders encourage members to participate in decisions but will retain the final say by analyzing the discussions shared. This allows the group members to feel part of the organization or team as a whole. In other words, democratic leadership is about making subordinates feel belonged and valued in the team.

Pros

• Improves employee satisfaction, morale, and engagement
• Encourages team culture
• Promotes skill development, creativity, and innovation

Cons

• Time-consuming decision-making
• Possibilities for disagreements
• More room for ambiguity

The Right Time To Use It

This type of leadership is more suitable in a context that requires complex problem-solving requiring innovative and creative solutions- and in the early stages of a business that requires the input of all stakeholders. It is also a preferred leadership style where employee engagement, morale, team growth, and skills development are seen as important within the organization context or nature of business.

3. Laissez-faire Leadership

This is a style of leadership that takes a hands-off approach and lets team members work independently and make decisions for themselves. A laissez-faire leader is more likely to focus on their work without focusing much on what the subordinates are doing.

Under a laissez-faire leadership style, there are no two communications unless they are asked for by members. This leadership is about letting members go in their own flow, even if the leader may have a vision for themselves.

Pros

• Promotes flexible work environments
• Encourages innovation and creativity
• Enhances autonomy and independence

Cons

• Lack of direction and guidance
• Reduced accountability
• Underperformance by subordinates

The Right Time To Use It

This leadership style is best suited for cultures where employees can give their best with less support or prefer to explore their own leadership and innovative skills. It is also best suited for high-level teams that involve highly experienced people, such as C-suite employees and executives.

When used strategically, it can also temporarily help at select points within a project, which eases oversight and allows for feedback when team member involvement is necessary for decision-making.

4. Transformational Leadership

This type of leadership focuses on inspiring and motivating employees to think outside the box and raise the bar, with the primary goal of achieving business goals and reaching full professional potential, i.e. transforming to positive outcomes.

These types of leaders thrive in constant change and growth and don’t prefer stagnation. Transformational leaders are big thinkers who push the company's vision forward and encourage team members to do the same.

Pros

• Makes teams adaptable to changing industry needs
• Develops agile teams and employees
• Keep an eye on the big picture of the company

Cons

• Constant change can demotivate employees
• Transforming needs can lead to employee attrition
• Can be difficult to adapt for inexperienced employees or freshers

The Right Time To Use It

The ideal context for using this style of leadership is among rapidly growing companies like startups and those within fast-changing industries. It also proves beneficial during organizational change and transformation, times of crisis or uncertainty, while fostering innovation, or when building a new team or department.

5. Transactional Leadership

This is a leadership style that involves rewarding employees for meeting specific goals and milestones. In other words, this leadership is based on a give-and-take, i.e. transactional approach. It is where the leader sets clear expectations alongside the promise of a reward to motivate the subordinates to achieve them.

This leadership involves documenting, tracking, and reporting timely goals and monitoring through a platform where everyone can see them.

Pros

• Motivates competitive employees
• Sets clear expectations for employees
• Clear direction towards goals and objectives

Cons

• Boring for uncompetitive employees
• Room for discrimination if rewards are nominal
• Can reduce democracy for subordinates

The Right Time To Use It

This leadership style is best in situations where team members are motivated by rewards or are highly competitive, even if they are as small as pizza or plaque.

However, it is best implemented only if meaningful rewards, such as commissions, bonuses, and other benefits, can be delivered. These types of rewards will offer motivation while honoring the relationship between the employee and the company.

Understanding what is leadership style, and what best suits an organization's context requires a thorough understanding of many personal factors relating to a company. This is where executive coaches can be helpful in guiding both executives and organizations in improving their leadership style to best suit the vision of the company.