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C M A ALPHA
Business Studies Department
PRINCIPLES OF BUSINESS
4th Form
Lesson Notes: Leadership | Leadership Style

Define the term Leader: These are persons who have to employ the most appropriate
strategies for getting the work done in order to meet done in order
to meet the goals of their organization.

Definition of leadership

(1) Leadership: This is the ability to get things done through the efforts of other people.
(2) Leadership: refers to the ability of a person to motivate or influence others to work
constructively towards the effectiveness and success of the organization in which they are
involved. Management refers to directing and controlling them to achieve principles or
values that have been identified.
(3) Leadership: refers to the ability to influence or motivate others to accomplish a
given task or goal.

Leadership is an important function of management, as it helps to maximize efficiency and to

achieve organizational goals but leadership involves more than just management; it also
involves mobilizing resources and motivating staff to achieve business objective.

A good leader tends to be people-oriented, with their main aim being to motivate others
(guiding people) to achieve their goals. Managers are task oriented (administering work).
They create strategies, policies, and procedures that enable individuals to cooperate and work
effectively. Good Leaders set challenging but attainable goals or objectives and motivate
others to achieve them. They will act with honesty, make intelligent, informed decisions, and
usually gain the respect of others.

Leaders tend to be risk-takers who encourage others to participate through consultation and
encouragement. They achieve power through their charisma and influence. Managers tend to
avoid risks as much as possible and their outcome lies in formal authority and position they
hold. Not all managers make good leaders, neither are all managers in leadership positions
are good leaders. If you are a senior manager, it does not necessarily mean that you will be
good at leading those below or around you in your organizational hierarchy. Good leaders are
flexible, they may adapt different styles of leadership, as the situation requires. For example,
you can be democratic when it important to consult with the employees about important
decisions that may affect their jobs and working conditions. Or, you can be autocratic when
important decisions need to be made quickly where there is no time to consult with others.

Leaders who are not flexible are unable to adapt different styles of leadership are not good
leaders. You may achieve results but may not command the respect of others to motivate
employees.
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Outline the essential characteristics of a good leader

There are various definitions of leadership. Many of them include the following features:
● Exerting influence
● Motivating and inspiring others
● Helping team members or employees to realize their potential
● Setting a good example
● Encouraging team members employees to achieve the organization’s goals
● Showing good judgement
● Performing management functions (plan, organize, delegate, direct, etc.) as required by
management
● Communicating effectively with employees and employers.

Various character traits have been associated with leadership. Good leaders are often able to take
a “helicopter” perspective, meaning they can look down at a situation from above rather than
getting lost in the details. The most important characteristics of effective leadership are:

▪ Honesty and trustworthiness

▪ Focus
▪ Flexibility
▪ Making difficult but intelligent decisions

The diagram below shows other characteristic that complements those mentioned above.
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Integrity Efficiency

Show good judgment

Characteristic of good Take the leader

Get the job done leader

Self-confidence Command the respect, trust, and

confidence of the workers
Intelligence

Discuss the different types of leadership styles

1. Types of leaders

- Autocratic or authoritarian leaders

- Democratic or participative leaders
- Laissez-faire leaders
- Charismatic leaders

Leadership Styles

Managers all have different personalities and values, which play a large role in influencing
their approach to governing or managing an enterprise. Other factors which influence the
leadership style used by managers include: the nature of the task at hand, the attitude of
employees and the level of skill or qualification of employees. It can be said, therefore,
that good leaders do not use one specific leadership style. Rather, they may use of a
mixture of these leadership styles depending upon the situations that they face on the job.

2. Types of leadership styles

- Autocratic/authoritarian leadership
- Democratic/Participative leadership
- Laissez-faire leadership/Free rein leadership
- Charismatic leadership
- Transformational leadership
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Leadership style refers to a leader’s pattern of behaviour, and the ways in which leaders take
decisions, manage change and deal with their staff. There are three main styles: autocratic,
democratic and laissez-faire.

1. Autocratic/authoritarian leadership: autocratic means making decisions by oneself.

Autocratic leaders make decisions on their own, and then tell staff what to do and how to do
it. This tightly controlled approach is sometimes called ‘tell and do’. The autocratic
manager will often provide clear instructions, but staff may be demotivated because there is
little opportunity to share their own ideas. Autocratic leaders are usually inflexible and often
operated by using threats, instilling fear and intimidating employees.

This type of leader tells employees what to do and expects orders to be followed without
question. This is a good style in emergencies and other situations when decisions need to be
made and actions are taken quickly. However, if a manager is always autocratic employees
may become dissatisfied, because they are unable to contribute ideas or challenge they think
are wrong.

Autocratic leadership: is adopted by person who believes in leadership having full control of
the entire decision-making.

● This types of leader is dominant and decision are made without consultation.
● Does not encourage feedback.
● Clear chain of command and decision are quickly taken and put into operation.
● Does not contribute to team-building
● Instill fear in workers.
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2. Democratic/Participative leadership: democratic means making decisions after

considering everyone’s ideas. In persuasive democratic management, a leader will make
decisions and persuade the followers that these are right decisions. In consultative democratic
management, the followers will have a lot of input into the discussion (i.e. they are
‘consulted’), even if the leader makes the final decisions. Democratic leaders are often
referred to as participatory leaders. They often impact employees by giving job satisfaction,
empowerment and a sense of teamwork.

This type of leader consults with other managers and employees and involves them in
problem solving and decision-making. Information and ideas about work and the future of
the business are shared and discussed openly before the managers make an informed decision
on what actions should be taken.

This style of leadership is important when decisions can affect the jobs and working
conditions of others, for example when an organization has to cut its workforce, change-
working hours, introduce new machinery or relocate. Employees may not like the outcomes
but may accept it better if they feel they were consulted and if their views are listened to
before such decisions are made.

The aim of this leader is to persuade the workers to get the job done.

● Leader requires to involve the workers in decision-making.

● Ideas, suggestions and recommendations from worker are accepted, thereby fostering the
idea of participative leadership.
● Attention is given to the workers through involving them in decision-making process.
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Difference between the Democratic and the Authoritarian Leadership Style

It is important to note that the democratic leadership style is quite different from the
authoritarian leadership style. The democratic or participative style of leadership is quite
flexible and encourages an atmosphere of active participation of employees in the business.
The leader is quite firm, but approachable and respected by the employees. The
authoritarian or autocratic leadership style
is quite inflexible. The leader is extremely firm, quite unapproachable, very forceful,
aggressive,
demanding and intimidating to employees. Employees do as they are told. They are not
involved in the decision-making processes of the business. The work environment may be
quite uncomfortable for employees.

3. Laissez-faire leadership (free-rein): Laisses-faire is a French phrase, which means, “let

(them) do (it)”, and it is used to describe loose management style. Managers create guidelines
and objective, but then leave staff to carry out the tasks themselves. This can be successful if
the employees are motivated and are good decision-makers. However, it can lead to chaos if
staff need strong direction from the managers and are unable, for various reasons to make
decisions themselves.

This type of leader is a hands-off manager. They communicate aims and objectives to
employees and then leave them to organize their work and make their own decisions about
how best to achieve this. They believe that people are motivated and productive when they
are able to fulfill responsibilities and obligations in their own way, with only minimal
direction.

This leadership style can encourage employees to be independent, creative and more actively
involved in the operations of the business. This is important when you are looking for new
ideas and innovation, for example, when researching and developing new products,
production processes or marketing campaigns.

This types of leadership environment, the leader gives the workers enormous freedom to
operate, and interferes, minimally, if at all.

● This leadership believe that the workers will be more receptive to them.
● Supervisors do not want to offend anyone.
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Two further style of leadership are charismatic and transformational.

4. Charismatic leadership: a charismatic leadership style is where the leader has a strong
personality or charisma, and can influence others to follow.
Charismatic leaders are exceptionally self-confident people who have a strong desire to
influence others and who believe that their ideas are morally correct.

● This leader is one who has a special ability to lead.

● They tend to convince people to accept ideas put forward.

Features of charismatic leadership:

− determination
− advocates change and challenges the existing policy and procedures
− puts the organization’s interest over self interest

5. Transformational leadership: is where employees inspired to embrace changes in the

organization regardless of the consequences.

This leader identify the need for change, and, as a visionary, uses strategies that will inspire
workers to change.

● Knowing how to turn knowledge into skills.

● Exercising influence, not authority.
● Transforming the self and accessing mental resources.
● Fine-tuning the transformational mind-set and developing a leadership philosophy.
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Types of management skills

◻ Technical skills: these are important to middle and lower level managers because they are
primarily involved with the technical areas of an organizational.

◻ Human skills: are important to managers at all levels of an organization. This involves
having the knowledge and capacity to work with, understand, and motivate individuals and
groups.

◻ Conceptual skills: these are needed mainly by managers at the top. Higher-level managers
have to develop and plan strategies and therefore need to have the mental capacity to analyze
and assess complex and abstract situation.
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The diagram below shows a pictorial representation of the make-up of each leadership
style
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SUMMARY: Leadership Style Advantages and Disadvantages

Good leaders match their style to the need of different situations. They may be autocratic when
urgent action is required, democratic when it is advantageous to involve other in the decision-
making process.

Some organizations are more suited to particular styles. For example, in advertising agency, it is
helpful to shade ideas between lots of people, so democratic or laissez-faire styles can be best.
Where decisions have to be made quickly and to set pattern, a more autocratic style is more
useful.
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