Chapter 2

Leadership theories and styles

Most researchers evaluate leadership effectiveness in terms of the
consequence of the leader’s actions for subordinates and other
organizational stakeholders. However, many different types of outcomes
have been used, including the performance and growth of the leader’s group
or organization, its preparedness to deal with challenges or crises,
subordinates’ satisfaction with the leader, subordinate commitment to the
group objectives, the psychological well-being and development of
subordinates, the leader’s retention of high status in the group and the
leader’s advancement to higher positions of authority in the organization. A
leadership style is a leader’s style of providing direction, implementing plans,
and motivating subordinates. There are many different leadership styles
proposed by various researchers that can be exhibited by leaders in the
political, business or other fields. Literature reviews on leadership style,
expressing an approach that stresses a holistic view of leadership, including
how a leader’s physical presence determines how others perceive that
leader. The factors of physical presence are physical fitness, confidence, and
resilience. The leader’s intellectual capacity helps to conceptualize solutions
and acquire knowledge to do the job. Leadership style includes a leader’s
conceptual abilities agility, judgment, innovation, interpersonal sensitivity,
and domain knowledge which encompassing tactical and technical
knowledge as well as cultural and geographical awareness.
1. Trait Leadership Theory
One of the earliest approaches to studying leadership was the trait
leadership theory. The trait leadership theory emphasizes the personal
attributes of leaders.
Underlying this approach was the assumption that some leaders are natural
leaders who are endowed with certain traits not possessed by other people.
Early leadership theories attributed managerial success to possession of

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extraordinary abilities such as tireless energy, penetrating intuition, uncanny
foresight and irresistible persuasive powers.
Traits of a good leader are:
i. Honest
• Display sincerity, integrity, and openness in all the leader’s actions.
• Dishonest behavior will not inspire trust.
ii. Competent
• Based on leader’s actions on reason and moral principles.
• Do not make decisions based on childlike emotional desires or
feelings.
iii. Forward-looking
• Set goals and have a vision of the future.
• The vision must be owned throughout the organization.
• Effective leader envisions what he or she wants and how to get it.
• Leader habitually picks priorities stemming from his basic values.
iv. Inspiring
• Display confidence in all tasks that the leader does.
• By showing endurance in mental, physical, and spiritual stamina,
leader will inspire others to reach for new heights.
• Take charge when necessary.
v. Intelligence
• Read, study, and seek challenging assignments.
vi. Fair-minded
• Show fair treatment to all subordinates.
• Prejudice is the enemy of justice.
• Display empathy and being sensitive to the feelings, values,
interests, and well-being of others
vii. Broad-minded
• Seek out diversity
viii. Courageous

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 • Have the perseverance to accomplish a goal regardless of the
seemingly overwhelming obstacles. • Display a confident calmness
when under stress.
ix. Straightforward
• Use sound judgment to make good decisions at the right time.
x. Imaginative
• Make timely and appropriate changes in your thinking, plans, and
methods.
• Show creativity by thinking of new and better goals, ideas, and
solutions to problems.
• Be innovative.
2. Behavioral Theories of leadership
Behavioral theories of leadership identify behaviors that differentiate
effective leaders from ineffective leaders. Researchers hoped that the
behavioral theories approach would provide more definitive answers about
the nature of leadership than did the trait theories. Studies on thousands of
leadership behaviors distilled down to two main aspects: people-oriented and
task-oriented behaviors.
3. Contingency Theories of Leadership
Contingency theories of leadership developed after it became clear that
identifying traits or key behaviors was not enough to understand what made
good leaders. Contingency researchers considered whether different
situations required different styles of leadership.
4. Path-Goal Theory
Currently, one of the most respected approaches to understanding
leadership is path-goal theory, which states that a leader’s job is to assist his
or her followers in attaining their goals and to provide the necessary
direction and support to ensure that their goals are compatible with the
overall objectives of the group or organization.
Overview of Leadership Styles

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Leadership has been studied in different ways, depending on the
researcher’s methodological preferences and conception of leadership. Most
researchers deal with only one narrow aspect of leadership, and most of the
studies fall into distinct lines of research. A leader brings a personal style to
any administrative position that infuses all that he does within the
organization and serves as the screen through which he views organizational
activity. Style influences and is influenced by the way leaders view people,
tasks, and organizations. These three factors have been extensively studied,
discussed, written about and taught to help leaders improve their style
through behaviorism. The qualities of leadership are similar whether your
discipline is business, education, or any other field. Behaviorism is concerned
with psychological satisfaction, social interaction, motivation, job
satisfaction, climate, ethos, group dynamics, interpersonal relations,
empowerment, and organizational culture. There are many styles of
leadership that fit many types of businesses and organizations. Subordinates
learn and become motivated in different ways, so effective leaders need to
know which styles work best in what situations or organizations. Many
leadership styles share common traits, and multiple studies have narrowed
down the key styles of leadership. The Centre for Association Leadership
identifies nine leadership styles as below.
1. Authoritarian Leadership Style
A leader who tends to centralize authority, dictate work methods, make
unilateral decisions, and limit employee participation
The authoritarian leadership style keeps main emphasis on the distinction of
the authoritarian leader and his subordinates. This type of leader creates a
distinct professional relationship. Direct supervision is what autocratic leader
believes to be the key in maintaining a successful environment and
followership. Authoritarian leadership style often follows the vision of those
that are in control, and may not necessarily be compatible with those that
are being led. Autocratic leader has a focus on efficiency, as other styles,
such as democratic style, may be seen as a hindrance on progress. Examples

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of authoritarian leadership are a police officer directs traffic, a teacher orders
a student to do his assignment, and a supervisor instructs a subordinate to
clean a workstation. All of these positions require a distinct set of
characteristics that give the leader the position to get things in order or to
get a point across. Authoritarian traits including leader set goals individually,
engages primarily in one-way and downward communication, controls
discussion with subordinates, and dominates interaction. Several studies
have confirmed a relationship between bullying, on the one hand, and an
autocratic leader and an authoritarian way of setting conflicts or dealing with
disagreements, on the other. An authoritarian style of leadership may create
a climate of fear, where there is little or no room for dialogue and where
complaining may be considered useless.
2. Managerial Leadership Style
Managerial leadership is essentially “top-down”, with authority closely
aligned to the formal roles of leaders. Managerial leadership assumes that
the focus of leaders ought to be on functions, tasks and behaviors and that if
these functions are carried out competently the work of others in the
organization will be facilitated. Authority and influence are allocated to
formal positions in proportion to the status of those positions in the
organizational hierarchy. Managerial leadership is focused on managing
existing activities successfully rather than visioning a better future for the
organization. This approach is very suitable for business leader working in
centralized systems as it prioritizes the efficient implementation of external
imperatives, particularly those prescribed by higher levels in the hierarchy.
Managerial leadership has certain advantages, particularly for bureaucratic
systems, but there are difficulties in applying it too enthusiastically to
business organizations because of the professional role of subordinates. If
subordinates do not “own” innovations but are simply required to implement
externally imposed changes, they are likely to do so without enthusiasm,
leading to possible failure.
3. Paternalistic Leadership Style

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The way a paternalistic leader works is by acting as a father figure by taking
care of their subordinates as a parent world. In this style of leadership, the
leader supplies complete concern for his subordinates. In return, leader
receives the complete trust and loyalty of his subordinates. Subordinates
under this paternalistic leadership style are expected to become totally
committed to what the leader believes and will not strive off and work
independently. The relationship between these subordinates and leader is
extremely solid. The subordinates are expected to stay with a company for a
longer time because of the loyalty and trust. Leader and subordinates not
only treat each other like family inside the workforce, but outside too. These
subordinates are able to go to each other with any problems they have
regarding something because they believe in whatever they say is going to
truly help them. However, one of the downsides to a paternalistic leader is
that the leader could start to play favorites in decisions. For example, the
paternalistic leader will include the subordinates more apt to follow and start
to exclude the ones who are less loyal. In today’s business market,
paternalism is more difficult to come by because there have become more
lay-offs and stronger unionization. This affects paternalistic leader because
the subordinates may not believe that their jobs are 100 percent ensured.
When this happens, subordinates begin to look for bigger and better job
opportunities instead of staying at one company for a longer period of time.
Because of this, the leader may be thinking that the subordinates could be
leaving and not fully believe the subordinates when leader tells them
something about a job opportunity. This could put the subordinates and
leader at risk for a bad situation. Subordinates who follow paternalistic
leadership also have better organizational skills. This is because a
paternalistic leader encourages and allows subordinates to complete tasks
so that leader can stay on top of their work. On this line of reasoning, those
subordinates who have completed their tasks would boost their self-
confidence and this makes them work harder to reach a goal and exceed the
goal to prove to their leader that they are working hard. Having this

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paternalistic leadership style can also help to implement a reward system.
This reward system will allow those subordinates to work even better
because there is something for them at the end of the tunnel. While doing
this, subordinates will also be able to accomplish more work in a set time
frame.
4. Democratic Leadership Style
a leader who tends to involve employees in decision making, delegate
authority, encourage participation in deciding work methods and goals, and
use feedback as an opportunity for coaching employees.
The democratic leadership style consists of the leader sharing the decision-
making abilities with subordinates by promoting the interests of the
subordinates and by practicing social equality. The boundaries of democratic
participation tend to be limited by the organization or group needs and the
instrumental value of subordinates’ attributes, for example their skills and
attitudes. The democratic leadership style encompasses the notion that
everyone, by virtue of their human status, should play a part in the group’s
decision. However, the democratic leadership style still requires guidance
and control by a specific leader. The democratic leadership style demands
the leader to make decisions on who should be called upon within the group
and who is given the right to participate in, make and vote on decisions.
Research has found that the democratic leadership style is one of the most
effective and creates higher productivity, better contributions from
subordinates and increased group morale. Democratic leadership style can
lead to better ideas and more creative solutions to problems because
subordinates are encouraged to share their thoughts and ideas. While
democratic leadership is one of the most effective leadership styles, it does
have some potential downsides. In situation where roles are unclear or time
is of the essence, democratic leadership can lead to communication failures
and uncompleted projects. Democratic leadership works best in situation
where subordinates are skilled and eager to share their knowledge. It is also

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important to have plenty of time to allow subordinates to contribute, develop
a plan and then vote on the best course of action.
5. Laissez-Faire Leadership Style
A leader who generally gives the group complete freedom to make decisions
and complete the work in whatever way it sees fit.
The laissez-faire leadership style is where all the rights and power to make
decisions is fully given to the subordinates. Laissez-faire leader allows
subordinates to have complete freedom to make decisions concerning the
completion of their work. It allows subordinates a self-rule, while at the same
time offering guidance and support when requested. Laissez-faire leader is
using guided freedom to provide the subordinates with all the materials
necessary to accomplish their goals, but does not directly participate in
decision-making unless the subordinates request his assistance.
This style should not be used when the leader cannot or will not provide
regular feedback to his subordinates. This is an effective style to use when:
• Subordinates are highly skilled, experienced, and educated.
• Subordinates have pride in their work and the drive to do it successfully on
their own.
• Outside experts, such as staff specialists or consultants are being used.
• Subordinates are trustworthy and experienced.
6. Transactional Leadership Style
Transactional leader focuses his leadership on motivating subordinates
through a system of rewards and punishments. There are two factors which
form the basis for this system, contingent reward and management-by-
exception. Contingent reward provides rewards, materialistic or
psychological, for effort, and recognizes good performance. Management-by-
exception allows the leader to maintain the status quo. The leader interferes
when subordinates do not meet acceptable performance levels and initiates
corrective action to improve performance. Management-by-exception helps
reduce the workload of leaders being that they are only called-in when
subordinates move away from progress. Transactional leader identifies the

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needs of their subordinates and gives rewards to satisfy those needs in
exchange of certain level of performance. Transactional leader focuses on
increasing the efficiency of established routines and procedures. Leader is
more concerned with following existing rules than with making changes to
the organization. As a result, a transactional leader establishes and
standardizes practices that will help the organization to reach maturity, goal-
setting, efficiency of operation, and increasing productivity. A transactional
leader is negatively affected when the emotional level is high while positively
affected when the emotional level is low. Transactional leadership presents a
form of strategic leadership that is important for the organizational
development. Transactional leadership is essential for team innovativeness.
7. Transformational Leadership Style
Leadership expert James McGregor Burns introduced the concept of
transformational leadership in his 1978 book titled as “Leadership”.
Transformational leadership is defined as a leadership approach that causes
change in individual and social systems. In its ideal form, transformational
leadership creates valuable and positive change in the subordinates with the
end goal of developing subordinates into leaders. In this leadership style,
leader works with subordinates to identify needed change, creating a vision
to guide the change through inspiration and executing the change in tandem
with committed members of a group. Transformational leadership serves to
enhance the motivation, morale, and job performance of subordinates
through a variety of mechanisms. This includes connecting the subordinate’s
sense of identity and self to a project and to the collective identity of the
organization. Transformational leader is being a role model for subordinates
in order to inspire them and to raise their interest in the project, challenging
subordinates to take greater ownership for their work, and understanding the
strengths and weaknesses of subordinates, allowing the leader to align
subordinates with tasks that enhance their performance. The concept of
transformational leadership was initially introduced by James V. Downton
and Burns defining transformational leadership as a process where leaders

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and their subordinates raise one another to higher levels of morality and
motivation. Transformational leadership can be seen when leader and
subordinates make each other advance to a higher level of morality and
motivation. Transformational leader is able to inspire followers to change
their expectations, perceptions, and motivations to work towards common
goals through the strength of their vision and personality. Unlike in the
transactional leadership style that based on a “give and take” relationships,
but on the leader’s personality, traits, and ability to make a change through
example, articulation of an energizing vision and challenging goals.
Transforming leader is idealized in the sense that he is a moral exemplar of
working towards the benefit of the team, organization and/or community.
There are four dimensions of transformational leadership as below:
i. Idealized influenced
• Leader serves as an ideal role model for subordinates.
• Leader “walks the talk”, and is admired for this.
ii. Inspirational motivation
• Leader has the ability to inspire and motivate subordinates.
iii. Individualized considerations
• Leader demonstrates genuine concern for the needs and feelings of
subordinates.
• This personal attention to each subordinate is a key element in bringing
out their very best efforts.
iv. Intellectual stimulation
• Leader challenges subordinates to be innovative and creative.
• A common misunderstanding is that transformational leader is “soft”, but
the truth is that he or she constantly challenges subordinates to higher levels
of performance.
8. Contingent Leadership Style
The contingent leadership style provides an alternative approach,
recognizing the diverse nature of organizational contexts and the
advantages of adapting leadership styles to a particular situation rather than

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adopting a “one size fits all” stance. Managerial job is too complex and
unpredictable to rely on a set of standardized responses to events. Effective
leaders are continuously reading the situation and evaluating how to adapt
their behavior to it. Leadership requires effective diagnosis of problems,
followed by adopting the most appropriate response to the issue or situation.
This reflexive approach is particularly important in periods of turbulence
when leaders need to be able to assess the situation carefully and react as
appropriate, rather than relying on a standard leadership model.
2. 3. Leadership skills and competencies
Enabling your associates to work at their very best is at the core of
managerial leadership. Note that selection of the word enabling is purposeful
—“making able; making it possible for”—as leadership today is so much
more about creating environments where people can succeed than it is
about making decisions or getting things done individually. You cannot
possibly handle by yourself everything that must be done. Nor are most
managers in situations where they are capable of making all decisions
themselves and simply dictating actions to their subordinates. That is just
too slow and none powering for organizations to function effectively.
The solution lies in leadership development. In its broadest context,
development relates to enabling the individual to grow in skills, knowledge,
and abilities to perform at his or her highest possible level now and for the
future. I cannot imagine an organization that does not need to have its
people performing at their most “effective state.” Yet the area of human
resource development is one of the least understood, and one of the lowest
priorities, in most companies with which I have worked. It doesn’t make
sense.
The leadership challenge is to find ways to make sure your associates are
being developed regardless of whether the company has a vibrant human
resource development function. The critical ingredients to consider are:
Creating an environment where associates are encouraged to learn
and grow

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 Identifying the most important competencies that associates must
develop
Providing the mechanisms for associates to develop those
competencies
Generating individual development plans for associates based on their
unique sets of skills and deficiencies
Integrating development into the day-to-day activities as much as
possible
Identifying the Key Competencies
It is not sufficient to simply create a supportive environment for human
resource development. Given the perennial lack of resources and time to let
development happen at its own pace, you need to concentrate the
development activities in those areas that are of highest priority to the
corporation. This is not a new concept —just one that is often overlooked or
given little attention. The word competencies became popular several years
ago as a way of creating some focus for development efforts. I
Developing the Competencies
With competencies in hand, you can generate individualized development
plans for each of your associates. Think broadly about the range of activities
that would be developmental. One important advantage to participating in
these open-enrollment executive education programs is the opportunity to
interact with managers from a range of different companies and industries.
Your associates can learn as much from their peers as from the instructors.

2.4. Good vs. Bad Leaders.

Good leaders are those leaders who fulfill the qualities we discussed in
chapter one under the topic “qualities of effective leaders”.

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Bad Leaders
1 - Know it all attitude

We tend to think of managers and leaders in work as being incredibly

knowledgeable people about the job. And in most cases this is right.
However, that’s not always the case. The Peter Principle is a concept in
management developed by Laurence J. Peter, which people will be promoted
to "a level of respective incompetence": Employees are promoted based on
their success in previous jobs until they reach a level at which they are no
longer competent, as skills in one job do not necessarily translate to another.
For example, the top sales person who was great at closing deals is
promoted to head of sales and is now managing a team of people, a
completely different role and skill-set. Really brave leaders won’t be afraid to
hire people that know more than them or develop employees so they can
become leaders themselves.

2 - Lack of customer focus

If your leaders are not focused on keeping and growing your customers,
what’s the point? Customers are your ultimate source of knowledge. They
tell you why your products are worth buying and more importantly they’ll tell
you when things could be better. Virtually every job that people do can be
seen as improving the lives of customers, even if only in small ways.
Therefore, every job that people do can be made meaningful by focusing on
the ways in which it improves the lives of customers, including maybe even
especially the leadership in the company.

3 - Inability to create a company culture

Culture is the secret sauce that we can point to when things go well or blame
when nobody wants to work for us. Leaders need to help develop the culture
starting with teams and permeating throughout the whole organization. And
if it’s not working, leaders need to be part of the solution. The vast majority
(about 70% according to Margaret Heffernan) of companies that embark on

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trying to change their culture fail. Despite us knowing that culture is our
secret sauce for success, most of us have no idea how to create it or
maintain it.
Our blog on team culture will give you some solid advice on how to create an
effective team culture.

4 - Lack of ambition/vision
If you’ve had the courage to stand up and lead and know the direction you
want to go, make sure people understand the ambitions you have and the
vision you’re chasing after. It’ll make it easier to follow if they know why. It
stands to reason that the clearer we can see what we are setting out to
achieve, the more likely we are to achieve it. The exciting and ambitious to
ask, the greater the dopamine hit. The best visions might be the most
ambitious ones that we may never actually reach, but we are more willing to
go along for the ride. Each point in our journey is an opportunity to feel like
we’re making progress toward something bigger than ourselves.

5 - Poor communication
Humans function much better when uncertainty is removed. The greatest
way of removing uncertainty is through communication. It’s essential that
leaders can communicate more than just the facts that people probably
already know. Communication is great when things are going well. It is
essential when things are going poorly.

6 - No adaptability
If there is one positive takeaway from the pandemic it has taught us that we
can’t take anything for granted. In the last few years in order to survive and
advance some companies had to adapt to adverse market conditions

8 - Avoiding conflict
Every great relationship requires a bit of constructive conflict. There are no
great relationships without conflicts and problems along the way. The victory

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comes when you can achieve a win: win scenario. There is no victory in the
absence of constructive conflict.

9 - No accountability
A by-product of the know-it-all attitude is the lack of accountability when
things go wrong. Accountability is not hard, just put your hand up and own
your decisions and their outcomes.

10 - Missing executive presence

We know that CEO pay has gone off the charts compared to the average
worker in the last number of decades. According to Simon Sinek in “Leaders
Eat Last” the reason we are offended by the exorbitant and disproportionate
compensations of some of the leaders has nothing to do with the numbers. It
has to do with this social contract deeply ingrained in what it means to be
human.

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