Leadership Styles That Influences Businesses to Grow

Understanding the various leadership styles that drive business growth is an interesting aspect to many. Different leadership styles have unique impacts on organizational culture, employee morale, and overall performance. 

By recognizing and implementing the right leadership style, businesses can foster innovation, inspire teams, and navigate challenges with agility, ultimately propelling their growth trajectory. 

A leader’s leadership style reflects their unique behavioral approach to managing and motivating employees toward shared goals and vision. These styles also shape a leader’s strategic approach to meeting business objectives and fostering team growth. 

As you progress in your career, you may find yourself in leadership positions, guiding meetings, projects, teams, or even entire departments. Identifying or adopting a specific leadership style becomes essential in such roles. 

Given the dynamic nature of business, leaders often employ various leadership styles to address different situations effectively. In this article, we will take a deep dive into the nuances of leadership styles.

Also, , we will study various leadership styles that promote not only business success but also motivate people.

Types of leadership styles

Below is a list of prevalent leadership styles, ranging from autocratic to visionary, along with insights into the advantages and obstacles associated with each approach.

Democratic/participative/facilitative leadership style

The democratic leadership style is often regarded as the most effective. Democratic leaders provide guidance to group members while actively involving them in the decision-making process. 

In studies conducted by Lewin, it was found that although productivity may be lower compared to authoritarian groups, the contributions made by members in the democratic group were of higher quality. 

Participative leaders encourage group participation while retaining the ultimate decision-making authority. This approach fosters engagement, motivation, and creativity among group members, as they feel valued and integral to the team’s goals.


Under the democratic leadership style, employees experience empowerment, value, and unity. This approach has the potential to enhance retention rates and morale within the workforce. 

Additionally, it reduces the need for extensive managerial supervision, as employees actively participate in decision-making and possess clarity regarding their responsibilities.


The democratic leadership style may pose challenges in terms of efficiency and costliness due to the time required for organizing group discussions, collecting ideas and feedback, deliberating potential outcomes, and communicating decisions. 

Moreover, it can create social pressure for team members who prefer not to share their ideas in group settings.

Autocratic leadership style

Sometimes referred to as the “authoritarian style of leadership,” autocratic leadership is characterized by a focus on results and team efficiency. 

Leaders of this style often make decisions independently or with a select group and expect strict adherence to instructions from employees. 

They typically possess high levels of self-confidence and motivation, communicate clearly and consistently, prioritize dependability, and adhere strictly to rules. Autocratic leaders prefer highly structured work environments and advocate for supervised work settings.


Autocratic leaders can enhance productivity by delegating tasks effectively, offering clear and direct communication, and alleviating employee stress through prompt decision-making conducted independently.


Autocratic leaders frequently experience elevated stress levels due to their sense of responsibility for all outcomes, compounded by their limited flexibility, which may breed resentment within the team.

Bureaucratic leadership style

Bureaucratic leaders, akin to autocratic ones, demand strict adherence to established rules and procedures from their team members. 

This style emphasizes defined duties within a structured hierarchy, minimizing the necessity for collaboration and innovation. It finds optimal efficacy in heavily regulated sectors such as finance, healthcare, or government.

If you possess a detail-oriented, task-focused nature, prioritize rules and order, exhibit strong willpower and self-discipline, and uphold a robust work ethic, this leadership approach may align well with your style.


This approach proves effective in organizations mandated to adhere to stringent regulations. Leaders under this style prioritize maintaining a clear distinction between work requirements and interpersonal relationships to ensure the team remains focused on achieving objectives without unnecessary distractions.


This approach tends to stifle creativity among employees, potentially leading to feelings of restriction. Additionally, this leadership style is typically resistant to change and may struggle to adapt in dynamic environments requiring agility and innovation.

Coaching leadership style

A coaching leader excels in recognizing the strengths, weaknesses, and motivations of team members, actively aiding each individual’s development. 

This leadership style involves setting clear expectations, providing regular feedback, and assigning challenging projects to foster growth in team members. While advantageous for both employers and employees, coaching leadership is often underutilized due to its time-intensive nature. 

These leaders prioritize support and learning, preferring guidance over commands and utilizing guided questions to facilitate growth.


Coaching leadership fosters a positive environment that encourages skill development, empowers team members, and cultivates a confident organizational culture. Leaders who adopt this approach are highly regarded as valuable mentors within their teams.


Although this leadership style offers numerous benefits, such as personalized mentorship and skill development, it can be time-intensive due to the need for individualized attention with employees. This can pose challenges, particularly in fast-paced environments where meeting deadlines is crucial.

Laissez-faire leadership style

The laissez-faire leadership style contrasts with autocratic leadership, emphasizing delegation of tasks to team members with minimal supervision. Laissez-faire leaders prioritize giving employees autonomy, freeing up time for other responsibilities. 

This approach is suitable when team members are experienced and self-sufficient. However, it can lead to decreased productivity if expectations are unclear or if some employees require more guidance and motivation.


The laissez-faire leadership approach fosters accountability, creativity, and a laid-back atmosphere, often resulting in increased employee retention rates.


This approach usually isn’t suitable for new employees who require guidance and hands-on support initially. Additionally, other team members may feel under supported.

Pacesetter leadership style

The pacesetting leadership style is highly effective in driving quick results. Leaders in this style prioritize performance, setting ambitious standards and ensuring accountability among team members. 

While it can be motivating in dynamic environments where energy is essential, it may not suit individuals requiring mentorship and feedback.


Pacesetting leadership drives employees to achieve goals and fulfill business objectives, fostering high-energy and dynamic work environments.


Pacesetting leadership can result in miscommunications and stressed-out employees, as the focus is consistently on pushing towards goals or deadlines.

Servant leadership style

Servant leaders prioritize a people-first approach, believing that when team members feel fulfilled personally and professionally, they become more effective and consistently produce excellent work.

With a focus on employee satisfaction and collaboration, they often earn high levels of respect. Servant leaders excel in motivating their teams and possess strong communication skills. 

If you prioritize collaboration and engagement among team members and are dedicated to fostering their professional growth, this leadership style may resonate with you.


Servant leaders are adept at enhancing employee loyalty and productivity, fostering employee development and informed decision-making, nurturing trust, and nurturing future leaders.


Servant leaders can experience burnout as they frequently prioritize their team’s needs over their own, and they may struggle with asserting authority when necessary.

Situational leadership style

The situational theories of leadership highlight the significant impact of the environment and circumstances on leadership dynamics. Among these theories, Hersey and Blanchard’s model stands out for its comprehensive approach. Initially introduced in 1969, this model delineates four primary leadership styles:

  1. Telling: Directing followers by instructing them on what to do.
  2. Selling: Persuading followers to embrace proposed ideas and messages.
  3. Participating: Allowing group members to actively engage in the decision-making process.
  4. Delegating: Adopting a hands-off approach and empowering group members to make decisions autonomously.

Blanchard later expanded on this model with the SLII framework, which underscores how the developmental stage and skill level of individuals influence the most effective leadership style. Within this updated model, four distinct leadership styles are identified:

  1. Directing: Providing clear instructions with minimal guidance or support.
  2. Coaching: Offering both directives and substantial support to facilitate growth.
  3. Supporting: Providing ample assistance while offering limited direction.
  4. Delegating: Allowing individuals to take charge with minimal guidance or support.


One key advantage is its adaptability, as leaders can tailor their approach to suit the specific needs and capabilities of their team members. 

By matching leadership behaviors to the readiness and developmental level of individuals or groups, situational leaders can optimize performance and foster growth. 

This flexibility enables leaders to navigate diverse situations, whether they involve directing inexperienced team members or empowering skilled professionals. 

Additionally, situational leadership promotes effective communication and collaboration, as leaders engage in ongoing assessment and adjustment based on changing circumstances. 


Determining the appropriate leadership approach for each individual or group requires keen observation, insight, and understanding of various factors, such as skills, knowledge, and motivation. 

Moreover, adapting leadership behaviors to fit different situations demands flexibility and agility, which can be demanding for leaders, particularly in fast-paced or unpredictable environments. 

Additionally, effectively implementing situational leadership may require significant time and effort for ongoing assessment, communication, and adjustment.

Visionary leadership style

Visionary leaders possess the remarkable capacity to propel advancement and instigate periods of transformation by igniting inspiration among employees and garnering trust for novel concepts. 

They excel at forging robust organizational connections and aim to instill assurance among both direct reports and colleagues. 

The visionary style is particularly advantageous for small, rapidly expanding organizations, or larger entities undergoing transitions or reorganization. 

Visionary leaders typically exhibit traits of persistence, boldness, strategic thinking, and a willingness to embrace risks. They are often characterized as inspirational, optimistic, innovative, and charismatic.


Visionary leadership can facilitate company growth, foster team cohesion, and enhance overall organizational effectiveness by revitalizing outdated technologies or practices.


Visionary leaders, due to their focus on the big picture, may overlook crucial details or fail to seize other opportunities, such as acknowledging the contributions of their teams.

Strategic leadership style

Strategic leaders occupy a crucial position within a company, balancing its current operations with future growth prospects. 

This leadership style demands foresight, a keen understanding of the competitive landscape, and the ability to adapt to change. While strategic leaders prioritize executive interests, they also prioritize stability and welfare for all employees. 

By employing this leadership approach, organizations can navigate towards their long-term objectives, fostering a forward-looking, flexible, and resilient environment suited to today’s ever-evolving business landscape.


By aligning long-term goals with day-to-day operations, strategic leaders foster a clear vision and direction. Their ability to anticipate market trends and competitive forces enables proactive decision-making, ensuring the organization remains agile and adaptable. 

Moreover, strategic leaders prioritize innovation and growth opportunities, driving sustainable success and positioning the company for long-term viability. 


Strategic leaders must navigate uncertainty and complexity, often requiring them to make difficult decisions in ambiguous situations. 

Additionally, implementing strategic initiatives may encounter resistance from stakeholders who are resistant to change or have conflicting interests. 

Balancing short-term pressures with long-term objectives can also be challenging, as strategic decisions may not yield immediate results. Moreover, maintaining alignment and cohesion across diverse teams and departments requires effective communication and collaboration skills.

Transformational leadership style

Transformational leaders are adept at building trust and fostering confidence among their teams, inspiring individuals to work collaboratively towards organizational objectives. 

They not only challenge existing norms but also empower employees to expand their capabilities and embrace continuous growth. 

The primary aim of transformational leadership is to instigate enduring positive change, elevate team performance to its highest potential, and propel the organization towards sustained success.


Transformational leadership offers numerous benefits for organizations. 

By inspiring and motivating employees, transformational leaders can foster a sense of purpose and commitment among team members. 

This style of leadership encourages innovation, creativity, and continuous improvement, driving organizational growth and adaptability in dynamic environments. 

Transformational leaders also tend to build strong relationships with their teams, promoting trust, collaboration, and open communication. 


Additionally, implementing changes and fostering innovation may encounter resistance from individuals comfortable with the status quo. 
Maintaining a balance between promoting change and ensuring stability within the organization can be difficult. Furthermore, the charismatic nature of transformational leaders may lead to dependency on the leader, potentially hindering individual initiative and autonomy among team members.

Transactional leadership style

Transactional leadership relies on a system of rewards and punishments to guide employee behavior. Leaders establish clear rules and standards, closely monitoring performance and offering rewards for goal achievement. 

However, if goals are not met, they may increase supervision or require more frequent check-ins. This leadership style prioritizes maintaining the current state and achieving predetermined objectives, emphasizing the need for structure and oversight to drive performance.


Transactional leadership offers several benefits, including clarity and structure within the organization. By setting clear expectations and standards, employees understand what is required of them to receive rewards and avoid consequences. 

This can lead to increased productivity and goal attainment as team members strive to meet established benchmarks. 

Additionally, transactional leaders can quickly address performance issues through feedback and corrective action, ensuring that the team stays on track towards organizational objectives.


Transactional leadership, while providing structure and clarity, also presents several challenges. This style can lead to a lack of creativity and innovation among team members, as the focus is primarily on meeting predetermined goals and adhering to established procedures. 

Additionally, the reliance on rewards and punishments may create a transactional relationship between leaders and followers, potentially eroding intrinsic motivation and commitment to the organization’s mission. 

Moreover, the emphasis on monitoring and control may stifle autonomy and empowerment, hindering employee engagement and satisfaction. 

As a result, transactional leaders may struggle to adapt to rapidly changing environments and foster a culture of continuous improvement.

How to choose a leadership style

When selecting a leadership style, authenticity is key to effective leadership. Reflecting on personal values and preferences can guide the decision-making process. 

Consider whether you prioritize achieving goals or nurturing relationships within the team. Determine if you thrive in structured environments or prefer providing freedom of choice to team members. 

Evaluate whether you prefer making decisions independently or through collaboration with others. Additionally, assess whether you focus on short-term objectives or prioritize long-term vision. Reflect on whether motivation stems from empowering team members or providing clear direction. 

Lastly, envision what a healthy team dynamic means to you and how your leadership style can cultivate it. By considering these questions, you can align your leadership approach with your values and goals, ultimately enhancing your effectiveness as a leader.

The below mentioned diagram is a leadership matrix used widely to assist in selecting the optimal leadership style tailored to your specific situation. 

The Leadership Style Matrix is structured into four quadrants, each pairing two leadership styles suitable for specific situations and individuals.

The Y-axis gauges task “programmability,” ranging from specific steps to creative freedom. The X-axis measures an individual’s autonomy preference based on factors like education, skill, and motivation. 

For instance, highly skilled and motivated individuals tend to prefer autonomy, while those with lower motivation and skill may require more feedback and interaction.

Strategies for choosing

Here are four tips to help you develop it:

  1. Experiment: Try different approaches in various situations and see what works best for you.
  2. Find a mentor: Learning from experienced leaders can give you valuable insights into developing your own style.
  3. Ask for feedback: Get input from people you trust to help you grow as a leader.
  4. Be yourself: Your leadership style should reflect who you are. Stay true to yourself and focus on what feels right for you.

What to keep in mind

Although certain leadership styles may excel in particular roles — for instance, autocratic leadership in military settings — the most effective leadership often involves a combination of styles. 

Determining which style to employ in various workplace scenarios requires both experience and emotional intelligence. 

While you may have thrived in a previous role using one leadership style, a different position may necessitate a different approach to ensure optimal team performance. 

By familiarizing yourself with various leadership types and their intended outcomes, you can adapt your leadership style to suit the needs of your current situation.

Why to develop a leadership style

Many employers consider questioning candidates about their leadership skills during job interviews as the most accurate way to assess their potential for success in a role. 

As you cultivate your leadership abilities, you’ll likely employ various approaches and techniques to fulfill your employer’s objectives and support your team members effectively. 

As a manager, you may find yourself utilizing multiple leadership styles simultaneously. By familiarizing yourself with each of these styles, you can pinpoint areas for improvement or refinement in your own leadership approach. 

Moreover, you can discover alternative leadership methods that align better with your current objectives and learn how to collaborate with managers who adopt different styles from your own.


In conclusion, leadership styles are diverse and adaptable, each with its own strengths and challenges. 

The effectiveness of a leadership style often depends on the context, organizational culture, and the individuals involved. While some styles may excel in certain situations, a flexible approach that integrates aspects of various styles can often yield the best results. 

By understanding the nuances of different leadership styles and continuously honing their own approach, leaders can navigate diverse challenges, inspire their teams, and drive success in any environment. 

Ultimately, the key to effective leadership lies in the ability to recognize the needs of the situation and adapt accordingly, fostering a dynamic and empowering environment for growth and achievement.


What are the traits of a good leader?

A good leader is attuned to the needs of their team and project so they can adapt to various situations. A leader should be able to guide and motivate team members while managing project objectives and caring for employees’ individual needs.

What is the least effective leadership style?

No management style is inherently good or bad, but some styles are less effective in some situations than others. Autocratic, laissez-faire, servant and transactional leadership can pose challenges in many situations, but they can be an asset to a manager temporarily under certain circumstances.

Why is it important to know your leadership style?

Knowing your leadership style helps in making effective business decisions. Additionally, it provides a blueprint on how to devise effective strategies, tackle complex situations, and manage a team effectively.

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