How Leadership Styles Affect an Organization

What makes a successful leader?

Businesses, CEOs and middle management have asked this question for many years. The answer changes by organization and situation.

Most leaders have a certain management style they bring to the table, but different teams and situations may merit a change in style, or even a merging of styles. Here are five common leadership styles that supervisors tend to exhibit.


Common traits of an authoritarian leader include little to no flexibility and a decision-making process that doesn’t center on employee feedback. In fact, these types of leaders make choices without discussing them with employees and they generally have all the authority in the organization. This style is best utilized when fast decisions need to be made, or in a situation involving major organizational issues.


Laissez-faire leaders tend to sit back and let their employees do the jobs they were hired to do. They keep up with what’s going on, but limit their involvement in the process. They place a lot of importance on trust. This style works well when the employees are able to self-direct and can utilize their skills effectively without a lot of direct supervision. It’s also helpful when employees work remotely. It might not work as well if there are team members lacking a sense of personal accountability, and other leadership styles might need to come into play at that point.


A democratic leader will consult the entire team before making a decision, and will often delegate responsibility to other team members. This results in active communication among all team members, both upward and downward. Democratic leaders encourage collaboration, creativity and honesty among the team.


A big part of a transformational leadership style involves motivation and encouragement. A transformational leader sets lofty goals and challenges employees to perform better. They try to start change in not only employees, but also the organization as a whole. This leadership style works best with employees who are easily motivated, have a drive to succeed and are detail-oriented. By encouraging these traits, these leaders usually end up with employees who exhibit a high level of productivity.


Using rewards and punishments to motivate employees is the main characteristic of a transactional leader. They may use contingent rewards, for good performance, or they may use what is referred to as “management-by-exception” meaning they only intercede when something happens to change the organization’s status quo. They try to help the organization create more effective goal-setting practices while increasing productivity. This style also encourages innovation among employees who want to earn performance rewards.

Your organizational culture may dictate your leadership style, so work to find out what style meshes best with your company and its goals.

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