Leadership Styles – 5 main leadership styles in the modern world

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Growth of the economies and the business environment has created many important concepts for the survival and development of the organizations. Leadership styles are a major concept that evolved with the business environment changes. It was in the society since the old days and emphasized by great leaders such as Buddha, Mahatma Gandhi, Winston Churchill, and Nelson Mandela. Leadership can be considered as an art of motivating people to achieve a commonly specified goal.  The leader encourages and motivates people around him to achieve a specified goal. In the business world, the leader helps and motivates colleagues and subordinates to achieve organizational strategic goals.

The theory of leadership has created many leadership traits. Based on the traits of each leader, several leadership types have identified. Even though guiding and motivating the followers is the main characteristic of a leader, the approach of each leader for the guidance can be distinguished from each other. Let’s discuss a few common leadership types that can be seen in the modern business world.

01. Transformational Leadership

A transformational leader is a leader who concentrates more on encouraging, inspiring and motivating employees to take the responsibilities of the organizational activities. Transformational leaders support innovative ideas and they create a positive environment for innovative thinkers. They help the employees to grow and motivate them to achieve organizational growth. Transformational leaders are highly vision-oriented and they will flexibly adjust to the internal and external business environment changes.

Transformational leadership can be considered as one of the most positive leadership styles and a demanding leadership style in day-to-day operational activities.

02. Transactional Leadership

Transactional leaders are leaders who strictly encourage compliance by making the followers behave through rewards and punishments. They usually make their decisions based on performance statistics. Transactional leaders are short term goal-oriented. They reward the followers when they perform well and punish when their performance is poor. They do not pay much attention to creativity or innovation and expect the work to be done in a pre-specified and organized way.

Transactional Leadership can be considered as the most methodical leadership method. This is most suitable for the task and outcome-oriented operations.

03. Autocratic Leadership

This is a traditional leadership style that can still be seen in modern organizations. The leader has the most authority in the organization’s decisions and the subordinates’ participation is minimum in the decision-making process. Due to this quality, this leadership is known as authoritarian leadership as well. Autocratic leaders use their ideas, knowledge, and judgments when making decisions.  Work is usually highly structured in this leadership method based on the leader’s approach and the innovation and creativity are discouraged.

These type of leadership styles is beneficial when leading a group that is new to the policies and procedures.

04. Democratic Leadership

Democratic leadership is also known as participative leadership. In this leadership method, the leader encourages every employee in the organization to participate in the organizational decision-making process. By giving the decision making power to the employees, the leader expects to gather innovative ideas and to motivate employees as they can execute their own decisions into actions. Democratic leadership provides opportunities for employees to speak openly and build conversations with each other. This creates a ‘com-con’ communication structure between the leader and the employees where everyone’s idea is treated respectfully.

05. Servant Leadership

This is a modern leadership concept that got evolved through employee satisfaction. Challenging the usual employee serving the leader method, the leader is serving the employee under the servant leadership method. The employees are the most important asset for the leader and the leader’s priority is given to satisfy the employees. Through this leadership method, the leader is expecting to motivate employees by treating them exceptionally. The servant-leader is expecting the employees to commit to the organization and provide their maximum effort as a return to the benefits they get from the leader.

Discussed above are few common leadership styles that can be seen in the modern business environment. Each leadership style has its pros and cons and helpful in each stage of the business process.

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