What Leadership Management Style is Best for Business?
Whether it’s for better or for worse, a leader shapes an organisation. The stakes are highest at the top, and it’s important to get it right. Business leaders can influence culture, drive innovation, inspire employees, and guide a company toward success… or failure.
Finding a good leader or becoming a good leader yourself is an important trait to identify. There are many leadership styles that are available
As a business leader, it’s important to be able to understand the various leadership styles that are out there and situations where certain leadership approaches may or may not be appropriate.
Let’s dive into the main leadership styles, and situations where they may or may not be advantageous:
Autocratic Leadership
Someone who takes an Autocratic Leadership style makes decisions unilaterally with little or no input from team members.
Autocratic leaders want strong control over all aspects of the work. They will clearly define tasks and responsibilities.
Leaders who take an Autocratic leadership style primarily focus on one-way communication, where they are the ones communicating to their subordinates.
For many, this leadership style will come with negative connotations. Many employees want to have an element of autonomy as well as the freedom to express their own thoughts and opinions. Over time, leadership style is likely to discourage creativity and lead to a lack of morale in the long-term.
However, this leadership style might be valued when quick decision-making is crucial, or in situations where tasks require strict control and oversight, such as in manufacturing or the military.
Democratic (Participative) Leadership
Democratic Leadership styles focus on involving their team members in decision-making, valuing and encouraging input and feedback.
Open communication is encouraged building a sense of collaboration and teamwork through encouraging team discussions and idea sharing.
Typically a Democratic Leadership style is valued by employees as they tend to feel that their opinions and ideas are valued, and are often motivated by the level of responsibility and autonomy they have.
This leadership style is appropriate when the expertise within the team is diverse, and collaboration is essential – such as in creative industries or organisations valuing innovation.
The main downside to this leadership style is that it’s not always ideal in time-sensitive situations. Knowing when it’s appropriate or not to gain other people’s opinions is key.

Transformational Leadership
Transformational leadership styles are focused on inspiring and motivating your team to strive for higher goals and improve their personal development. This leadership style focuses on inspiring by creating a visionary outlook for their fellow team members.
People who adopt a Transformational leadership style encourage creativity amongst their team and act as mentors to provide a strong sense of purpose to fellow colleagues.
This leadership style is most appropriate when the organisation is going through significant change or a shift in culture – typically this might be when businesses are having a re-structure, or implementing technology and processes that are going to change the way the business operates. Transformational leaders should act as a guide and a source of optimism to encourage other team members through changes and help them develop a growth mentality.
Typically this leadership style is widely liked by team members, often leading to high employee motivation and job satisfaction. However, transformational leadership styles generally require having team members who are naturally motivated and have mutual respect for the leader. There may be times when some employees could risk taking advantage of this type of leader.
Transactional Leadership
Transactional leadership styles emphasise clear structures, rules and rewards for performance. They manage their teams using a performance-based structure. Employees are motivated by rewards or punishments based on their performance.
Transactional leaders will be very goal-orientated, creating clear plans on how to achieve goals while setting their team with specific tasks and targets in order to contribute to those goals.
This type of leadership style is most appropriate in task-orientated situations such as sales environments.
A key benefit to this leadership style is that they provide clarity to their employees, so they understand exactly what their role encompasses and what the business’s expectations from them are.
However, this leadership style works best with people who are motivated by performance and want to progress – naturally, this will not be the case for some workers who might find this leadership style demotivating. Furthermore, a transactional leadership style can also limit creativity in some cases.
Laissez-Faire Leadership
Laissez-Faire leadership is a hands-off approach where leaders provide minimal direct supervision, allowing team members to make decisions independently.
Business leaders that adopt the Laissez-Faire Leadership style tend to delegate decision-making to their team members, so employees tend to have high levels of freedom and responsibility in how they prioritise and manage their work.
This leadership style relies heavily on trust; therefore it works best with employees who are already self-motivated and highly skilled.
Laisses-Faire leadership works best on experienced teams that require little oversight – for example within research, technology, or creative fields.
While this leadership style fosters independence and creativity and has benefits such as creating high levels of employee satisfaction in skilled teams, the lack of guidance can in some cases lead to decreased productivity, as well as creating confusion or a feeling of lack of direction in inexperienced teams.

Coaching Leadership style
Coaching is the process of a partnership between a coach and an individual or group, where the aim is to help the participant improve their performance and potential so they can continue to progress – this can commonly be seen in either sport, professional or personal settings. A Coaching Leadership style focuses more on personal development and growth. The leader or ‘coach’ tends to work one-on-one with individuals to improve their performance, unlock their potential, and help them achieve specific professional goals in order to advance their careers.
The coach focuses on the individual’s skills, behaviour, and growth areas, helping them reflect and improve – thus helping the wider team and organisation to achieve their goals. Coaching involves providing tailored feedback and support based on the individual’s needs and performance.
Leaders who are using the Coaching Leadership style when managing their teams will work with individuals to identify and set specific, measurable, and achievable goals for personal or professional improvement – while these goals might differ from individual to individual, they will ultimately help to achieve wider business goals while simultaneously helping the individual to professionally develop.
The Coaching Leadership style has many benefits, such as high employee motivation and satisfaction as this leadership style tends to work best in a setting where there is a growth and progression plan in place for employees. Typically a Coaching Leadership style works best in small teams, as it involves very tailored approaches to each individual on the team. Therefore while this leadership style is often really effective, it might not be best suited for leaders who are running bigger teams as they might struggle to dedicate the time to personalise and tailor plans for each individual in as much detail as typical Coaching Leaders do.
Things to consider
Leadership styles may differ across different cultures. For example, some workers will require more structure and direction from a leader; meanwhile, other workers will value the freedom to be trusted to manage and prioritise their work. Furthermore, a leader might have to adapt their leadership styles, particularly for leaders managing global or diverse teams.
Emotional intelligence (EQ) is crucial when it comes to effective leadership, regardless of what leadership style you adopt. Leaders with a high EQ tend to foster stronger, more motivated teams.
Adapting Leadership Styles
In order to be a successful business leader in the modern world, you must be adaptable, shifting between styles depending on the situation and understanding when styles are appropriate or not appropriate in certain scenarios and people.
For example, an autocratic leadership style might be more appropriate in a crisis when decisions need to be made quickly. However, during growth periods, a transformational approach is going to be beneficial to your team and the business.

What are the most common leadership styles?
Traditionally, the most common leadership styles have been Autocratic Leadership, Democratic Leadership, Transformational Leadership, Transactional Leadership and Laissez-Faire Leadership. However, the Coaching Leadership style has gained in popularity over recent years, particularly within smaller organisations with smaller teams.
What is the best leadership style?
Typically, Transformational leadership is commonly considered as the best leadership style to adopt, Transformational leaders tend to have team members with high employee motivation and job satisfaction.
How do you identify your leadership style?
If you’re unsure about which leadership style you tend to adopt, there are several ways in which you can do this, such as by conducting self-analysis, undertaking some online leadership style tests, or asking for anonymous feedback from those who know and have experienced your leadership style so that you can gain truthful feedback.
What qualities should a good business leader have?
Generally, traits of a good business leader include supportiveness, self-awareness, the ability to be adaptable and open to change, and the ability to respectfully listen to others’ opinions. A good leader will lead by example, they should set the standard for their team.