IGCSEBusinessCambridge (CIE)Revision Notes2. People in Business (HR)2.2 Organisation & People ManagementLeadership Styles

Leadership Styles (Cambridge (CIE) IGCSE Business)

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Danielle Maguire

Written by: Danielle Maguire

Reviewed by: Steve Vorster

Types of Leadership Styles

  • Leadership is about having a vision, sharing that vision with others and providing direction

  • Leadership is necessary in many different contexts

    • A leader in sport could be the captain of a national football or basketball team

    • A political leader could be a president, prime minister of leader of a political group

  • Leaders can inspire and motivate others to work towards a common goal

    • This contributes to the meeting of aims and objectives and supports the development of a motivated workforce

Leadership styles

  • Leadership styles reflect the behaviours and attitudes of a leader towards their team members and influence the organisational culture, productivity and performance of a business

  • A successful leader will be able to use a variety of leadership styles, depending on the situation, to achieve the best results for their business

Diagram: different leadership styles

Most leaders operate using an autocratic, democratic or laissez-faire leadership style
Most leaders operate using an autocratic, democratic or laissez-faire leadership style

Autocratic leadership

  • An autocratic leader holds absolute power and authority within a business

    • Leaders set the direction and goals of the business and makes decisions without seeking input or agreement from others

    • The opinions, ideas or expertise of team members are not generally considered

    • Decisions are generally not open for discussion or debate

    • Strict obedience and compliance is expected from subordinates

    • Communication in business is mainly one-way: downward or 'top-down'

Advantages & Disadvantages of Autocratic Leadership

Advantages

Disadvantages

  • Autocratic leaders can make swift decisions without the need for lengthy discussions

    • Speeds up decision-making

    • Can be crucial in emergency situations

  • Coordination and efficiency may be improved as roles and tasks are clearly stated

  • Reduced employee morale as workers have no input into decision-making

    • Lack of input from team members limits ideas for problem-solving and innovation

  • Limited creativity as employees are required to follow strict instructions and are closely monitored

Democratic leadership

  • Democratic leaders actively involve employees in the decision-making process and encourage discussion, though they have the final say

    • Consultation, collaboration, delegation and teamwork are common features 

    • It is most effective in organisations with skilled and experienced employees

    • It works well in creative industries when managers give workers responsibility to work on projects together and manage their own time

  • James Parker, the ex CEO of Southwestern Airlines, is well-known for his democratic style of leadership. In his book Do the Right Thing he states “I’ve always tried to expect the best of people and to trust them, and I have almost never been disappointed. Part of trusting people is empowering them to make decisions”

Advantages and Disadvantages of Democratic Leadership

Advantages

Disadvantages

  • Encouraging participation from employees in decision-making processes

    • Can lead to higher levels of employee engagement and job satisfaction

  • Individuals feel valued and empowered when their opinions and ideas are considered

  • Encourages creativity and innovation within a business

    • Employees are more likely to share ideas and think outside the box when they have a say in decision-making

  • Decision-making can be time-consuming as consensus or majority agreement is sought

    • Competitive advantage may be lost as decisions take longer than rivals

    • Making compromises may cause further delays 

  • Conflicts and disagreements may arise when different views are sought

    • Resolving conflicts can be challenging and time-consuming

    • Leaders need to possess strong conflict resolution skills to ensure that disagreements do not escalate

Laissez-Faire leadership

  • Laissez-faire leaders play a minimal role in managing subordinates or business teams

    • Leaders provide little guidance, direction or supervision to employees

    • Employees have significant autonomy and freedom in making decisions and completing tasks

    • Laissez-faire leadership is most appropriate where leaders are working with a highly skilled and self-motivated team that requires minimal supervision

    • Communication may suffer in this type of organisation as clear direction is not given

Advantages and Disadvantages of Laissez-faire Leadership

Advantages

Disadvantages

  • Laissez-faire leadership can encourage creativity and innovation within the business

    • Employees have the freedom to explore ideas and make decisions independently

    • This allows for diverse perspectives and fresh approaches to problem-solving

  • Employees are empowered because they have autonomy and ownership over their work

    • Team members feel trusted and valued

    • This enhances job satisfaction, motivation, and a sense of responsibility

  • Some employees may struggle with decision-making 

    • This can lead to inefficiency and a lack of coordination within the team

    • Productivity may fall as individuals struggle to prioritise tasks or make informed decisions 

  • Without clear guidelines or standards, there is a risk of inconsistency in the quality of output

    • Different employees may have varying approaches

    • This may lead to a lack of cohesion and potential conflicts in the team

Recommending an Appropriate Leadership Style

  • The choice of leadership style can be influenced by a range of factors

    • Business circumstances including the nature and size of the business

    • Aims and objectives to be achieved

    • Personality, experience and skills of the leader

  • In particular, the skills and abilities of the workforce and the nature of the competitive business environment will impact upon the style of leadership adopted

Diagram: appropriate leadership styles

appropriate-leadership-styles-cie-igcse-business-rn
The leadership style adopted will depend on the skills of workers and the environment in which a business operates

Choosing the most appropriate style 

  • When a business faces a crisis situation and its workers are unskilled, autocratic leadership is likely to be most appropriate

    • However, if the workers are highly skilled, a democratic approach would be more effective

  • When a business operates in a stable environment and its workers are unskilled, a democratic approach is likely to be most appropriate

    • However, if the workers are highly skilled, a laissez-faire approach would be more effective

  • When a business operates in a high growth/challenging environment and its workers are unskilled, an autocratic approach is likely to be most appropriate

    • However, if the workers are highly skilled, a democratic approach would be more effective

Examiner Tips and Tricks

Exam questions often ask you to recommend an appropriate leadership style for a business, or to epand on the advantages or disadvantages of a particular style. Often the choice of style depends upon the current situation of the business. Leaders may not be autocratic all of the time but at certain times it may be the best best approach.

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    Danielle Maguire

    Author: Danielle Maguire

    Expertise: Business Content Creator

    Danielle is an experienced Business and Economics teacher who has taught GCSE, A-Level, BTEC and IB for 15 years. Danielle's career has taken her from across various parts of the UK including Liverpool and Yorkshire, along with teaching at a renowned international school in Dubai for 3 years. Danielle loves to engage students with real life examples and creative resources which allow students to put topics in a context they understand.

    Steve Vorster

    Author: Steve Vorster

    Expertise: Economics & Business Subject Lead

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.