Leadership Styles (Cambridge (CIE) O Level Business Studies)

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

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

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

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

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

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