Have you ever wondered why some organisations thrive under a leader while others struggle?
The answer lies in leadership styles and how they influence the organisational culture.
Management is about commanding and organising tasks and knowing how to manage people correctly. This post will uncover the top 5 leadership styles, their nuances, and how they shape workplace dynamics.
Understanding Leadership Styles
Leadership style refers to a leader's approach to guiding their team, executing plans, and inspiring others. Many experts have identified various leadership styles demonstrated by leaders across different sectors, including politics, business, and beyond.
Leadership behaviour patterns describe how managers leaders communicate with subordinates, solve problems, and encourage performance.
Whether you are preparing to lead a team as a manager or choosing an ACCA course to develop business skills, it is important to know about the types of leadership to define your career path.
Here’s a table summarising the five most effective leadership styles:
| Leadership Style | Key Traits | Impact on Culture | Best Suited For |
| Transformational | Visionary, Inspiring, Innovative | Fosters creativity and long-term growth | Fast-growing or innovative organisations |
| Democratic | Collaborative, Inclusive, Team-oriented | Encourages teamwork and employee engagement | Dynamic teams with diverse perspectives |
| Autocratic | Authoritative, Decisive, Controlling | Ensures structure but may hinder creativity | High-stakes or high-pressure environments |
| Laissez-Faire | Delegative, Trusting, Hands-off | Promotes independence but risks chaos | Highly skilled and self-motivated teams |
| Transactional | Performance-driven, Structured | Emphasises results but can feel rigid | Sales-oriented or performance-heavy roles |
Let's look at these leadership styles and explore how they impact leadership and organisational culture in more detail.
1. Transformational Leadership
Transformational leadership embraces the principles of inspiration and motivation, calling for higher performance levels from human employees. Lacking specific targets to hit, this leadership isn’t just about choosing objectives; it is about empowering the organisation to commit to a powerful vision that motivates them to change for the better.
This approach is suitable for industries in a state of change or organisations needing a major change of direction since transformational leaders encourage creativity. Think of leaders like Ratan Tata or A.P.J. Abdul Kalam, who combined vision with empathy.
Communication is essential for transformational leadership to work in an organisation. Praise, positive reinforcement, and feedback keep everyone on the right track with long-term goals, fostering the corresponding purpose and direction.
Impact on Organisational Culture:
Transformational leadership fosters a culture of innovation and adaptability. Employees feel motivated to leave their comfort zones. This style encourages collaboration, which is especially effective in startups or technology-driven industries in India.
2. Democratic Leadership
While transformational leaders pay particular attention to the issue of inspiration, democratic leaders are responsible for collaboration. The management style of democracy is most effective when each team member has a different set of skills and backgrounds.
Impact on Organisational Culture:
Democratic leadership fosters a culture of trust, and all employees are always involved in decision-making processes. Employees enjoy the confidence of getting listened to or even valued and appreciated by their company; hence, they work harder and are loyal. In essence, for the Indian companies that have bought into the diversity agenda, this style works for talent retention.
Example: Infosys, for instance, is famous for its excellent leadership work, where anybody can be a leader, and every worker is a versatile person regardless of nationality or race.
3. Autocratic Leadership
An autocratic leader does not create confusion. Critics of this style exist, but this style can do wonders when there is a need for quick decision-making. It is especially useful in organisations in sectors that demand compliance and accuracy, such as manufacturing industries and health facilities.
Impact on Organisational Culture:
Authoritarian leadership brings order and compliance or creates a proper organisational culture. However, it can hamper creativity if overused. Authoritarianism is prevalent in conventional Indian organisations; however, this is especially common in family-run organisations because of the strong tradition of hierarchy. Although this guarantees precision, new-generation leaders are now combining it with democratic features to encourage creativity.
4. Laissez-Faire Leadership
Laissez-faire leaders allow their subordinates to work independently with little intervention. This approach works well for experienced professionals but is not good for less experienced teams.
Impact on Organisational Culture:
The laissez-faire strategy encourages a culture of trust and free use of discretionary power. Employees' self-responsibility can increase job satisfaction since they are in charge of their duties. However, if not controlled, it contributes to confusion and a lack of responsibility.
5. Transactional Leadership
Transactional leaders focus on clear goals and tangible rewards. They set performance benchmarks and reward employees for achieving them.
Impact on Organisational Culture:
This style creates a results-oriented culture. While it motivates employees, which is key to meeting targets, it may lack emotional engagement.
In sectors like sales or banking, transactional leadership is prevalent. For example, leaders in firms preparing candidates for the ACCA course often set milestones to track learning progress and motivate participants through performance feedback.
Leadership and Organisational Culture
The impact of leadership on culture is profound. Leaders are the torchbearers of an organisation’s values, shaping how employees think, act, and collaborate. Effective leadership styles can create an environment where employees feel inspired and connected to the company’s vision. All the leadership styles are globally effective.
Actionable Steps:
- Analyse the strengths & weaknesses of the team.
- Ask your teammate what they think of your work so that you can refine your work.
- Ensure that your approach to leadership fits your organisation's culture and vision.
- Improve your management skills by attending leadership training courses, for example, courses meant for ACCA students.
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Leadership is not just about roles or functions. It’s about the influence and impact of leadership on culture. By understanding the types of leadership and their effect on organisational culture, you can become a more effective leader who drives results and inspires a positive workplace environment.
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