Leadership Styles (Cambridge (CIE) IGCSE Business): Revision Note

Introduction to leadership styles

• Leadership is about having a vision, sharing that vision with others and providing direction

• Leadership is necessary in many different contexts

  • A leader in sport could be the captain of a national football or basketball team

  • A political leader could be a president, prime minister of leader of a political group

• Leaders can inspire and motivate others to work towards a common goal

  • This contributes to the meeting of aims and objectives and supports the development of a motivated workforce

Leadership styles

• Leadership styles reflect the behaviours and attitudes of a leader towards their team members and influence the organisational culture, productivity and performance of a business

• A successful leader will be able to use a variety of leadership styles, depending on the situation, to achieve the best results for their business

Different leadership styles

Autocratic leadership

• An autocratic leader holds absolute power and authority within a business

  • Leaders set the direction and goals of the business and make decisions without seeking input or agreement from others

  • Opinions, ideas or expertise of team members are not generally considered

  • Decisions are generally not open for discussion or debate

  • Strict obedience and compliance is expected from subordinates

  • Communication in business is mainly one-way: downward or 'top-down'

Evaluating autocratic leadership

Democratic leadership

• Democratic leaders actively involve employees in the decision-making process and encourage discussion, though they have the final say

  • Consultation, collaboration, delegation and teamwork are common features 

  • It is most effective in organisations with skilled and experienced employees

  • It works well in creative industries when managers give workers responsibility to work on projects together and manage their own time

• James Parker, the ex CEO of Southwestern Airlines, is well-known for his democratic style of leadership

  • In his book Do the Right Thing he states “I’ve always tried to expect the best of people and to trust them, and I have almost never been disappointed. Part of trusting people is empowering them to make decisions”

Evaluating democratic leadership

Laissez-faire leadership

• Laissez-faire leaders play a minimal role in managing subordinates or business teams

  • Leaders provide little guidance, direction or supervision to employees

  • Employees have significant autonomy and freedom in making decisions and completing tasks

  • Laissez-faire leadership is most appropriate where leaders are working with a highly skilled and self-motivated team that requires minimal supervision

  • Communication may suffer in this type of organisation, as clear direction is not given

Evaluating laissez-faire leadership

Recommending an appropriate leadership style

• The choice of leadership style can be influenced by a range of factors

  • Business circumstances, including the nature and size of the business

  • Aims and objectives to be achieved

  • Personality, experience and skills of the leader

• In particular, the skills and abilities of the workforce and the nature of the competitive business environment will impact upon the style of leadership adopted

Appropriate leadership styles

Choosing the most appropriate style 

• When a business faces a crisis situation and its workers are unskilled, autocratic leadership is likely to be most appropriate

  • However, if the workers are highly skilled, a democratic approach would be more effective

• When a business operates in a stable environment and its workers are unskilled, a democratic approach is likely to be most appropriate

  • However, if the workers are highly skilled, a laissez-faire approach would be more effective

• When a business operates in a high-growth or challenging environment and its workers are unskilled, an autocratic approach is likely to be most appropriate

  • However, if the workers are highly skilled, a democratic approach would be more effective