A Look at Leadership Styles in Business

A leader giving instruction during a team meeting

Do you aspire to ascend to an executive role or to start your own company? If so, you are effectively choosing to work toward becoming a leader. Being a leader involves much more than simply giving orders and evaluating the work that others do.

Here, you can explore the significance and types of leadership styles in business. By refining your own understanding of what it means to be a leader and what your own leadership style is, you’ll stand a better chance of being highly effective and impactful within your organization.

In This Article:

What Exactly Are Leadership Styles in Business?

Every organization has a unique culture. That culture is shaped in large part by the behaviors of its top leaders, usually the C-suite executives (e.g. chief executive officer and chief financial officer). The behaviors of leaders as they manage, direct, motivate and guide managers and lower-level employees collectively comprise the leaders’ leadership styles.

Leadership styles in business aren’t only significant for determining the company’s culture, but also its success. This is because employees are human beings, not pawns on a chess board, and humans can only be productive and effective in the workplace if they enjoy job satisfaction and are surrounded by a positive, nurturing and productive workplace culture.

In short, leadership styles in business refer to the way in which the company’s leaders interact with managers and employees. Leaders are responsible for motivating others to do their best work; for directing the daily operations of the organization; and for establishing the vision, mission and culture of the organization — all of which are directly influenced by their leadership styles.

Types of Leadership in Business

There are quite a few types of leadership in business, but some of the most commonly acknowledged leadership styles are:

  • autocratic (or authoritarian)
  • democratic (or participative)
  • laissez-faire (or delegative)
  • transformational.

As you explore these leadership styles, it’s worth considering these questions: What exactly defines a great leader? Is a great leader someone who drives other people hard in order to achieve exceptional productivity? Is a great leader someone who brings out the best in other people, motivating them to do their best work every day?

Or is a great leader someone who can adapt their language use and leadership style to meet the needs of whichever employee or manager they are interacting with at any given time? The answers to these questions are certainly debatable. Spend some time reflecting on them as you consider the following leadership styles.

Autocratic Leadership Style

An autocratic or authoritarian leadership style consolidates power and decision making at the top. The senior-most leader establishes mandates for what needs to be done and how it should be done. They control and command the organization’s policies, procedures, direction and strategies, making all major decisions with little to no input from others.

Democratic Leadership Style

A democratic or participative leadership style is widely thought to be the most effective one. This leadership style encourages collaboration and feedback, with the acknowledgement that the evaluation of multiple perspectives and suggestions can lead to effective decision making and creative innovation.

During group discussions, the democratic leader will offer guidance, but will also solicit the opinions and suggestions of others. Democratic leaders help others feel that their role in the organization has value and meaning, which can encourage loyalty and commitment to the mission. However, the democratic leader still has the final say in the ultimate decision.

Laissez-Faire Leadership Style

The laissez-faire leadership style is diametrically opposite to micromanagement. It’s a hands-off approach that empowers each employee to take ownership of their role, and to figure out what needs to be done and how to do it most effectively. Laissez-faire leadership in business consolidates authority and decision making in others, rather than the top-most leader.

The laissez-faire style can be beneficial when the group is comprised of highly qualified and intrinsically motivated experts who are already deeply committed to the mission. However, elsewhere, it tends to result in a loss of productivity and motivation.

Transformational Leadership Style

Like the democratic leadership style, the transformational style is considered to be highly effective. Like the laissez-faire style, it encourages employees to exercise their own autonomy. Unlike the laissez-faire style; however, transformational leadership also engenders accountability and individual ownership.

The transformational leader establishes a central mission and vision for the organization, and inspires others to wholeheartedly commit to the cause. In part, the transformational leader motivates others by setting a strong, positive example, developing a highly supportive company culture and encouraging employees to take ownership in their work and to see their roles as meaningful. Companies led by transformational leaders tend to embrace innovation and change, proactively get in front of industry trends and inspire creative thinking.

Which of These Leadership Styles Is Best Suited to You?

Which leadership style is the best one over all else? Actually, there isn’t a universally ideal leadership style. A transformational leadership style might work wonders at one organization, but prove less effective at another, for example.

Instead of thinking in terms of, “Which leadership style is best?” consider which leadership style is best suited to you and to your organization. Authenticity is important. If you are a democratic leader at heart, then trying to become a laissez-faire leader will be disingenuous at best.

Since there is no universal answer, you’ll need to figure out which style best suits you, your personality and your situation. Reflect upon the following:

  • What type of person are you? Take some time for an honest self-assessment. Do you prefer to give orders or to collaborate with others? Or perhaps your personality fits somewhere in-between?
  • What type of people are your employees? Some employees might respond with enthusiasm to an authoritative style, preferring to simply be told what to do and get the job done. Others may not thrive in this environment; they prefer collaboration and opportunities to exercise autonomy in the workplace. Often, a leader must adapt their style to suit different employees.

Earn Your Master of Science in Leadership Degree

Whichever type of leadership style most appeals to you, learning the basic framework of leadership in business can’t be accomplished by simply reading a blog. In order to enhance your career qualifications and pursue your climb up the corporate ladder (or prepare to start your own company), may need to think about going back to school for your master’s degree.

A Master of Science in Leadership (MSL) degree or a Master of Business Administration (MBA) could give you the tools and credentials needed to pursue your dream job. Earning your graduate degree in a business field will give you invaluable opportunities to network with your peers. You just might find your future business partner among your classmates.

At Grand Canyon University (GCU), you can prepare to take the next step in your career, whether you’re a future entrepreneur or you aspire to ascend to the C-suite at a major corporation. In addition to our many Master of Business Administration degree options, the entrepreneurial Colangelo College of Business is pleased to offer the Master of Science in Leadership degree. Graduates will emerge with advanced competencies in leadership and with a well-defined sense of their own authentic leadership style. 

Click on the button above to request information on our MSL degree program.


Approved with changes by full-time faculty for the Colangelo College of Business on Feb. 9, 2023.

The views and opinions expressed in this article are those of the author’s and do not necessarily reflect the official policy or position of Grand Canyon University. Any sources cited were accurate as of the publish date.