There's no perfect leadership style that works for every organization in every situation. A small startup and a multinational corporation have different needs and challenges and often need different leadership styles in management. Knowing the different theories of organizational leadership can help you understand which type of leadership is right for a given situation.

Different Theories of Organizational Leadership

Along with the different types of leadership in an organization, there are different theories about how to define them. Depending which theory or analysis you consider, there may be four types of leadership styles, five types, nine types or 10 types.

Some leadership styles in management appear on a lot of lists, such as autocratic, transformative and laissez-faire leaders. Other types show up less frequently or have different names on different lists. There's no perfect theory of leadership, so look for one that makes sense of the leadership styles you find in your organization or yourself.

The Autocratic Leader

The autocratic leader is the boss – end of statement. They're in charge, and their employees do what they're told. An autocrat wields authority, makes decisions and doesn't worry about soliciting staff feedback.

This style has the potential for problems. Workers may get fed up with having no input and decide to jump ship. Having one person doing most of the thinking can lead to a shortage of ideas. However, autocratic leadership does have benefits:

  • There's no need for consultations, so decisions get made quickly.

  • Whatever the organization's stakeholders want, they can count on the autocrat executing their vision efficiently.

  • Autocracy works well when jobs are routine or require limited skills.

  • It may be necessary for complex jobs that need everyone to follow the rules.

  • In a crisis, having one person make quick decisions while ignoring worker input may be essential. Different theories of organizational leadership sometimes separate crisis leadership into its own management style.

The Laissez-Faire Leader

Among the types of leadership in an organization, the laissez-faire leader is almost the opposite of the autocrat. This hands-off leader sets the goals for employees and then lets workers find their own way across the finish line.

A big plus of this leadership style is that workers report high job satisfaction. It's particularly effective with creative workers or those who have a lot of experience at their job. The downsides?

  • It may not work with inexperienced staff.

  • Some workers need more guidance and constant feedback than others.

  • The laissez-faire manager risks becoming too hands off. It's still important to monitor performance, communicate expectations and provide the team with the tools they need to operate.

Some managers may use laissez-faire with experienced employees whom they trust and exercise tighter control of others.

The Transformative Leader

Transformative or transformational leaders are big-picture thinkers. This type of leader doesn't just want his staff to complete the current project; he wants to develop and improve the team to be even better next time. Transformative leaders have a vision of the future, and they aim the team toward it.

Transformational leaders are inspiring, stimulating and imaginative. They value their people and hold both themselves and their team accountable. Because they keep their eyes on the future, they may need a down-to-earth, nuts-and-bolts, right-hand person to focus them on the present.

The Democratic Leader

A democratic leader makes the final decision but wants feedback from team members first. This type of leader want to know what the team thinks and takes the members' opinions into account.

Workers usually prefer this style to autocratic leadership. Their opinions matter, which keeps them engaged in the project. Soliciting input and weighing it before deciding is slow, however, and may be too inefficient when quick decisions are needed.

The Bureaucratic Leader

Bureaucratic leadership derives its authority from the organization's hierarchy. The department chair or project leader doesn't depend on personal charm to lead. The bureaucracy's rules assign the leader her authority and duties, and that's good enough.

This leadership style is often valuable in industries that have to be tightly regulated. It can actually be efficient because the leader's role is clearly defined, and leaders are accountable to their own bosses.

If decisions have to be vetted by several layers of management, however, bureaucracy can be slow and cumbersome. Lower-ranked employees may find it difficult to get feedback or suggestions far enough up the hierarchy to make a difference.

The Charismatic Leader

The charismatic leader sits at the opposite pole from the bureaucrat. Their authority lies in their personality and presence, not in the power the company assigns them.

Leading by charisma can be effective and inspiring, much like a transformational leader. The difference is that transformational leadership's effects last after the leader moves on. Charismatic leaders' inspiration disappears when they do.

The Transactional Leader

To a transactional leader, running a team is about carrots and sticks. Employees are rewarded if they do well and are disciplined or criticized if they don't. Transactional leaders assume that rewards and penalties coupled with clear instructions should be enough to produce good results.

For a simple, short task, a transactional approach can produce good results. It often comes off as inflexible, which employees find frustrating.

The Servant Leader

For the servant leader, the needs of the team come first. They value the team's input, share power willingly and put a high priority on employee satisfaction. It is sometimes described as "altruistic leadership."

Servant leadership boosts employee satisfaction with their jobs and can increase their commitment. Critics of this style say it's misplaced in valuing the employees' needs over the company's. It isn't a good fit for all organizations.

The Situational Leader

The situational leader shifts styles whenever it's necessary. When talking with top management, they may solicit input and feedback. When addressing workers on the assembly line, they're more bureaucratic or authoritarian. They may be laissez-faire with established employees and more involved with newbies.

The drawback to situational leadership is that not everyone is comfortable with it. If you're naturally drawn to transformative or bureaucratic leadership, for instance, you may not find it easy to shift gears to other styles.

Applying Leadership Styles

Knowing the different theories of organizational leadership isn't as important as applying them. If you use them to help you develop your own leadership styles in management or figure out the right project manager for a particular team, they've served their purpose. However, you still have to decide which style works best for you.

When one style comes naturally to you, that may make the decision for you. If you aren't happy leaving decisions to others, you might be miserable trying a democratic leadership style. If you're not a charismatic person, trying to lead by charisma will feel unnatural and forced. If you're a little more flexible in your approach, there are other factors to consider:

  • What's your team like? Do they prefer clear, detailed instructions or want the freedom to generate their own ideas?

  • How much time do you have to make decisions? If you need snap decisions, democratic leadership probably won't work.

  • How much power do you really have? If the organization doesn't empower you to reward or punish your subordinates, you may not be able to impose an autocratic or transactional leadership style.

  • How much do you care about your team's satisfaction and well-being? A style that engages them in decisions creates more job satisfaction than autocratic decision making.