12 Types of Leadership in Business Made Simple

types of leadership in business

TYPES OF LEADERSHIP EXPLORED

Searching for insight into different types of leadership? Hoping to learn how CEO’s and company executives motivate others? Do you want to compare your approach to management to specific styles of leadership?

If the answer is yes, you’ve come to the right place.

For as long as I can remember, I’ve been fascinated by the topic of leadership. In fact, it’s part of the reason I earned an undergraduate degree in management and later obtained an MBA.

Today, I teach college courses in management and psychology about topics related to leadership. Examples include personality styles, business ethics, and continuous change.

If you are studying at a university right now and taking courses in business, like organizational management, there is a good chance the material you are exploring touches upon leadership styles.

And so that is what this post is all about: how leaders lead and the specific approaches they use. What follows is a breakdown of 12 leadership styles, presented in a way that is simple and straightforward. Where possible, examples are used to help deepen your understanding.

WHAT ARE LEADERSHIP STYLES?

Before exploring the unique styles of leadership, it might help to have a basic understanding of what this term really means. In a nutshell, a leadership style can be described as the way a person influences other people to achieve a specific goal.

The style of leadership that a person employs largely depends on three factors:

  • The personality of the leader
  • The organization [company, non-profit, military]
  • The followers

Let’s walk through the 12 different leadership styles and focus on key traits. Bear in mind many of the styles listed below are based on leadership theories.

leadership types in business
Which type of leadership matches your approach to management?

1. VISIONARY LEADERSHIP

This style of leading is concerned with the future and is largely influenced by the vision of the organizational leader.

In almost all cases, visionary leaders grant employees a high degree of autonomy, inspiring workers to make real the stated vision.

Visionary leadership types see the “big picture” and are good at spotting industry trends.

Examples of leaders who are considered visionary include:

  • The late Steve Jobs of Apple
  • Warren Buffett with Berkshire Hathaway
  • Henry Ford who founded Ford Motor Company

2. CHARISMATIC LEADERSHIP

Driven by their convictions and commitment to an idea, charismatic leaders use the power of their personality to persuade followers to “buy into” their vision of the future.

Skilled at verbal communication, this type of leader uses passion and emotion to captivate the minds of others and change minds. In many ways, visionary leaders and charismatic leaders share similar attributes.

That said, they are not always the same.

The difference between the two is that charismatic leaders are equipped with a “chip” to motivate people to support an organization’s goals. Visionary leaders may or may not have this chip.

It is for this reason that many charismatic leaders can also be classified as a visionary type, provided the communication skills are in place.

Examples of charismatic leaders include:

  • JFK
  • Mother Teresa
  • Nelson Mandela

3. DEMOCRATIC LEADERSHIP

This style of leading involves letting subordinates (followers) make decisions. Contributions, idea sharing, and participation are emphasized as part of the dynamic.

While the democratic leader holds the ultimate decision-making authority, the delegation of tasks with a high degree of autonomy often takes place. Democratic leaders solicit feedback, insight, and input from others within the organization.

Typically, this style of leadership involves active listening. Communication is free-flowing (upward and downward). Additionally, the encouragement of others, fairness, and honesty are all part of the democratic style mix.

Examples of democratic leaders include:

4. TRANSFORMATIONAL LEADERSHIP

As the name implies, transformational leaders are people who have the power to fundamentally change an organization. They often challenge established thinking and inspire others to buy into their vision of the future.

Many transformational leaders are also visionary types and empower people to make their own decisions. Fairness, infused with a sense of purpose, are key hallmarks of this leadership style.

Transformational leaders often possess the ability to persuade others to a place of change. Many visionary and charismatic leaders can also be classified as transformational types.

Examples of transformational leaders include:

  • John D. Rockefeller
  • Carl Jung
  • Sam Walton

5. TRANSACTIONAL LEADERSHIP

To be a transactional leader is to maintain the status quo. When you hear this term, focus your awareness on the concept of rewards. In other words, followers are acknowledged in real time for carrying out the directives of the leader.

Typically, transactional leaders communicate to subordinates with clear expectations. They also explain how followers can achieve stated goals. Continuous feedback is part of the dynamic.

Positive and negative reinforcement are sometimes used as part of the goal attainment.

Examples of transactional leaders include:

  • A mid-level manager
  • A frontline supervisor
  • A division director

6. STRATEGIC LEADERSHIP

Strategic leaders usually are concerned with plotting out an organization’s future. In many cases, they hold vast knowledge of a given industry. While a strategic leader can be the CEO of a company, its more often the case that the person is part of the executive management team.

When you hear strategic leader, think of words or concepts like short and/or long-term planner. These individuals can see where an industry is heading and create a roadmap for the future.

Business fields where strategic types are employed include technology, agriculture, and manufacturing.

7. TEAM LEADERSHIP

In the general sense, these types of leaders “lead” with the sound of a certain trumpet. They have a strong vision of the future and know what they stand for.

Tapping into the hearts and minds of others, team leaders employ many skills to reach organizational goals. These skills include motivating others, persuasion, and the encouragement of participation.

Similar to the democratic approach, team leaders sometimes share responsibility and power. As a result, they do not always succeed with their desired mission.

8. AUTOCRATIC LEADERSHIP

To be an autocratic leader is to be the person who wields the orbs of authority. In other words, they are “the boss” and everyone knows it.

They make most all organizational decisions and “rule” with absolute power – sometimes using fear and intimidation as part of the process.

The autocratic style is thought of as the least desired approach to management because it fails to motivate employees or grant autonomy.

Examples of autocratic leaders include:

  • Genghis Khan
  • Leona Helmsley
  • Napoleon Bonaparte

9. COACHING LEADERSHIP

When you hear the term coaching leadership style, think of a person who teaches, motivates, and develops followers. Coaches help people within an organization to enhance their skills and reach goals.

We often see coaching leaders in team settings where a group or division is charged with achieving specific objectives. Encouragement and praise, coupled with the ability to provide meaningful feedback, are strong traits of this leadership style.

10. LAISSEZ-FAIRE LEADERSHIP

This approach to leadership is “hands-off” – meaning the leader allows followers to make their own decisions while granting a high degree of authority.

Often conflict avoidant, laissez-faire leaders do not like to get involved in the day to day operations of a department or organization. This is the least desired approach to management according to most research.

Organizations with laissez-faire leaders often flounder and in many cases, fail.

11. CROSS-CULTURAL LEADERSHIP

A person is said to be a cross-cultural leader when they can manage, coach, develop, and coordinate people from different cultures within an organization.

We often see cross-cultural leaders in companies with a global presence. Diversity is emphasized with a recognition that differences among various groups enrich the organization as a whole.

Companies that employ cross-cultural leaders include:

  • American Airlines
  • Facebook
  • Google

12. FUNCTIONAL LEADERSHIP

When you hear the term functional leadership, think of a person who is focused on stability; an individual who has a steady hand on the till.

They often set the example for others and are involved with motivating, organizing, and planning. In the organizational sense, these types of leaders are results oriented and use metrics as tools of measurement.

An emphasis on how goals are achieved as opposed to who is achieving them is emphasized.

SUMMARY

It is best to think of leadership as multi-factorial and characteristic in nature. In truth, most leaders possess traits from a variety of styles.

Exceptions include authoritarian and laissez-faire types.

If you are interested in learning more about leadership and developing your own approach to managing others, you may want to pick up a copy of Leadership: Enhancing the Lessons of Experience by Hughes, Ginnett, and Curphy (See Amazon).

Thank you for stopping by.

About John D. Moore 328 Articles
Dr. John Moore is a licensed counselor and Editor-in-Chief of Guy Counseling. A journalist and blogger, he writes about a variety of topics related to wellness. His interests include technology, outdoor activities, science, and men's health. Follow him on LinkedIn