Business Leadership and Style

September 07, 2019

Business Leadership and Style

leadership style is a leader's method of providing direction, implementing plans, and motivating people. Various authors have proposed identifying many different leadership styles as exhibited by leaders in the political, business or other fields.

4 Different Types of Leadership Styles
·         Positive and Negative Leaders or Bosses.
·         There are different ways in which leaders approach people to motivate them. If the approach emphasizes rewards, the leader uses positive leadership. If the approach emphasizes penalties, the leader is applying negative leadership. Negative leaders should be called bosses rather than leaders.
·         There are three classes of supervisory techniques – autocratic, participate or consultative and free-rein and corresponding to these three techniques, there are three management styles – autocratic, democratic and laissez- faire. To these one more may be added-paternalistic style

·         Autocratic or Authoritarian leadership.
·         An autocratic leader centralizes power and decision-making in himself. He gives orders, assigns tasks and duties without consulting the employees. The leader takes full authority and assumes full responsibility.
·         Autocratic leadership is negative, based on threats and punishment. Subordinates act as he directs. He neither cares for their opinions nor permits them to influence the decision. He believes that because of his authority he alone can decide what is best in a given situation.
·         Autocratic leadership is based upon close supervision, clear-cut direction and commanding order of the superior. It facilitates quick decisions, prompt action and unity of direction. It depends on a lesser degree of delegation. But too much use of authority might result in strikes and industrial disputes. It is likely to produce frustration and retard the growth of the capacity of employees
·         Democratic or Participate leadership.
Participate or democratic leaders decentralize authority. It is characterized by consultation with the subordinates and their participation in the formulation of plans and policies. He encourages participation in decision-making.

·         The Laissez-faire or Free-rein leadership.
·         Free-rein leaders avoid power and responsibility. The laissez-faire or non-interfering type of leader passes on the responsibility for decision-making to his subordinates and takes a minimum of initiative in administration. He gives no direction and allows the group to establish its own goals and work out its own problems.
·         The leader plays only a minor role. His idea is that each member of the group when left to himself will put forth his best effort and the maximum results can be achieved in this way. The leader acts as an umpire. But as no direction or control is exercised over the people, the organization is likely to flounder

·         Paternalistic leadership.
·         Under this management style the leader assumes that his function is fatherly or paternal. Paternalism means papa knows best. The relationship between the leader and his group is the same as the relationship between the head of the family and the members of the family. The leader guides and protects his subordinates as members of his family.
·         As the head of the family he provides his subordinates with good working conditions and fringe benefits. It is assumed that workers will work harder out of gratitude. This leadership style was admirably successful in Japan with her peculiar social background.
·         This leadership style has still been widely prevalent in small firms in India. However, this paternalistic approach is unlikely to work with mature adult employees, many of whom do not like their interests to be looked after by a “godfather.” Instead of gratitude, it might generate antagonism and resentment in the subordinates

Advantage: Leads to Increase in Productivity

One of the advantages of leadership is that if leaders are able to delegate tasks efficiently, they can help increase worker productivity. Good managers are able to determine the strengths and weaknesses of different employees and delegate work accordingly. Efficient division of labor can result in higher work output, which ultimately results in higher sales and higher profit. On the other hand, ineffective leadership can reduce productivity. For example, if a manager decides to perform tasks that are easy, and delegates difficult tasks to employees, it could result in sub optimal productivity. However, a leader who understands how to assign work tasks that are tailored to each employee’s skills and talents will often find that employees accomplish those tasks more efficiently.

Advantage: Boosts Employee Morale

The advantages of leadership aren’t just about productivity, however, because sound leadership can also improve employee morale and make workers more loyal to the company. Loyal employees trust their managers and may be willing to work harder and stay with the company when times are tough. Recruiting and training new workers can be expensive, so fostering high morale through good leadership can have an impact on the bottom line. Good morale is one of the biggest advantages of leadership because it fosters a feeling of ownership and loyalty among employees.

Disadvantage: Takes Time Away From Performing Tasks

One limitation of leadership is that ensuring that you’re providing your employees with the resources and training they need is not a productive activity. While spending time leading and instructing workers is essential to make sure that they perform their duties well, managers do not actually produce goods or services while acting as leaders. An entrepreneur who hires a few employees might find that the time he spends performing leadership tasks cuts into the time he has to spend communicating with clients and making sales. In some instances, business owners handle this limitation of leadership by hiring administrators to handle some of these tasks. The drawback, however, is that high-quality administrators are expensive, which can dent a company’s budget.

Disadvantage: Fosters a Clash of Personalities

When you think about the pros and cons of being a leader, high on the list is the fact that leaders and subordinates may not always see eye to eye. This is one of the pros and cons of being a leader that you can’t avoid because your workplace features different personalities that will not always be in agreement. In fact, some businesses thrive on conflict because of the good ideas that may come out of clashing viewpoints, but the problem in most companies is that workers may feel that they cannot relate to their leaders, and an "us versus them" mentality can develop. Disagreements between managers and employees may result in disputes that waste time and reduce productivity. Managers need to have excellent people skills and be able to adapt their leadership styles to mesh with the personalities of different employees.


Different methods the organizations used to measure success of their activities and positing in the marketplace. Such as advanced methods either qualitative or quantitative have been designed and employed practically like Balanced Scorecard developed by Kaplan and Norton or other financial indices (ROE, ROA). Moreover, since the 90’s there was no common and precise method to measure business success. The activities are essential for companies and managed as providing a value in their daily operations. Without these activities and strategic policies cannot be executed, hence the strategy cannot be recognized. Moreover, in the beginning time of project management which is one of the most important functions in the modern management it amalgamates incompetent manpower within the company. This philosophy demonstrated in the project management as well, developed by the necessity for designing the policy and plans. So the proper planning and carrying out the responsibilities referred a project. The complexity and highly complicated in the business environment have imposed the organizations to be more informed and liable to accept the changes which are continuous and non-stop. The uncertainty of the business also needs to be sufficient in participation in all levels of the organization. In addition there are many strategic organizational assets like physical infrastructure, capital as well human resource which is vital component for organization. It has a key role in running smoothly the organization and accomplishing its objectives. In the continuous changing and competitive world market, the human resources become the most competitive advantage in the business, if they have managed effectively and sufficiently, it may considers as an evident that leaders have worthy effect on followers. The importance of leadership style has increased in the every industry, and has a direct effect on the development process with all its dimensions. So, the progress and sustainability in the business regardless the nature of the sector assures the overall development of local economy, especially in the emerging markets

Study framework.`
H1: Transformational leadership style is positively impacted on business success.
H2: Transactional leadership style is positively impacted on business success.
H3: Charismatic leadership style is positively impacted on business success.
Factor analysis and reliability by applying principle component analysis and Varian rotation, all observed variables in the measurement scale were tested through exploratory factor analyses (EFA) to discover their structures and convergences in the model. The first exploratory factor analysis was applied for the dependent variable, including six items, and the other EFA was for the group of independent variables (transformational, transactional and charismatic leadership) including 4, 3 and 4, items respectively.
Table 3: Summary of the independent variables.
Industry type
Educational services
IT services
Business services 
Less than 3 years 
Operation years
4-6 years 
Above 7 years
Secondary and less 
Education level
College degree
Undergraduate degree

Table 3 explained the demographics variables of the participants in this study. The number of male are more than female respondents (61.2%) which means dominance male in creating and managing the projects which also reflect weakness of supporting women in establishing their own businesses due to the nature of oriental culture prevalent in Jordan, and the majority of the respondents had an IT services nature business (40.0%), followed by business services like recruiting agencies and manufacturing with 28.2% and 16.5% accordingly. However, most of the respondents participating in filling the questionnaire were had with 4-6 operation years (accounting for 42.4% of the total) in the surveyed SMEs; most of owner or founders also co-founder had undergraduate educational level with (36.5%).
Table 4: Profile of respondents.
Std. deviation
Business success

Table 4: Descriptive statistics.
According to the Table 4 above, transformational leadership style has the highest mean value corresponding to 3.7588 and standard deviation value of 0.62122 interpreting that transformational leadership style has good correlation with business success. Followed by charismatic leadership styles which have 3.6541 mean value and 0.71206 standard deviation and 3.3275, 0.71206 mean and standard deviation respectively for transactional variable referring that this leadership style is poorly correlated with dependent variable (business success).

The Durbin Watson’s test is a statistical test using in detecting the existing autocorrelation in the residual (prediction error) in the regression analysis. It is named after James Durbin and Geoffrey Watson conducted this test at the residuals in least squares regression, and evolved limits tests for the null hypothesis which the errors are uncorrelated compared to the alternative ones which also follow first order autoregressive process. When value of Durbin-Watson test at 2, means there is no autocorrelation, if the value close to 0, it means there is a positive correlation and if the value approaching to 4 also means there is a negative correlation. The rule of thumb is said that the good fit of the model should be predicted by minimum of 60% variance in dependent variable which makes it a good fit for the study and getting a value of adjusted R square higher than 60%. Durbin-Watson’s test estimates the autocorrelation of the residuals from the regression analysis which identify that the cut-off ranges for Durbin-Watson’s test between 1.5 and 2.5.

 Results from the research found that there was a positive correlation between transactional leadership and project success. The findings were also further found no relationship between Laissez faire leadership style and project success. Moreover, the research explored a relationship between leadership styles and project success. Charismatic leadership style beta coefficient value is 0.142 with a significant value of 0.243 which is higher than 0.05, thus charismatic leadership is revealed to get a negative significant impact on business success. This finding is not consistent with Shea’s [66] study, which one of main contributions of this study was the impact of charismatic leadership on the performance of manufacturing task over a several of attempts was investigated. The findings of this study also indicated that employees working under leaders perform better than individuals who working under charismatic leaders in the first attempt. As well the study of Sidra which the data was collected from telecom sector in Pakistan and it was secondary and qualitative study, the sample size was 100 respondents, it concluded there was a relationship founded between charismatic leadership and organizational performance moreover it realized that the ability and skills have great role in creating follower’s committed work behavior and help protrusion in crises conditions, demonstrating strategic objectives which lead business to more successful and effective. Transformational leadership style beta coefficient value is -0.021 with a significant value of 0.851 which is higher than 0.05, thus transformational leadership is showed to get a negative significant impact on business success. This finding is different to a study conducted by Nubuor et al. [67] showing that there was a positive correlation between transformational leadership and banking project success in Ghana. This was due to the regression model selected can predict about 59% of the variance dependent variable (project success). The highest predictor of banking project success was inspirational motivation followed by individual consideration.
Unstandardized coefficients
Standardized coefficients
Std. Error
Dependent variable: Business success.
Table 6: Coefficients.
The results referred that transformational leadership had a negative significant impact on business success. Therefore, transformational leadership style doesn’t produce a role in creating success in the SMEs. H1: Rejected (Table 7). The findings showed that transactional leadership had a negative significant impact on business success. H2: Rejected. The results show that charismatic leadership has a negative significant impact on business success. H3: Rejected.

The conclusions were abstracted from analysis of the data collected from the surveys conducted by the researcher. From these, it can be indicated that employees are not as well paid as they would want, although the existence of great leadership styles develop their success. Leadership with its types have an essential role in shaping the behavior and attitudes of the subordinates as well staff. The field of leadership not only aimed to analyze the interpersonal connections but also focused on the role of a leader as a motivator. The objective of this study was to forming and developing the understanding of modern and popular leadership styles in selected companies in Amman city. The study found that most companies have same styles of leadership. Based on the results, all leadership styles have significant negative impact on business success. This indicates that when these types of leadership when applied, the business success would not increase. Therefore, Jordanian context leaders is invited to adopt and apply new styles leadership and share all members in decision making process since it is approved that business success was the best under several styles of leadership. Jordanian leaders should root innovation and creativity which may lead success in the business also increased productivity. The significant negative impact of leadership styles on business success means that success of business would not develop or increase when these styles of leadership are found.

Organizations need to get great skilled and more professional leaders to lead their subordinates in everyday activities in order to achieve the organizational strategic goals. Based on the findings of this research, every leadership styles studied in this research had negative on business success. The organizations who are interested to stay in the competitive business environment, it is highly recommended to get the right leader with great competences and experience as well influential effects should be found in all levels of the organization, either in public or private sectors in Jordan. Organizations in Jordan should also try to apply the recommendations of the most important studies which examine and identify the role of leadership in supporting and developing the companies. Organizations with good leadership strength and ability will further achieve success not only in the business but also in the personal scope; therefore, serious attention and concern should be highlighted to make leadership an ultimate target and priority.

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