Leadership style impacts the organization by affecting employee morale, productivity, decision-making speed, and metrics. Successful leaders carefully analyze problems, assess the skill level of subordinates, consider alternatives, and make an informed choice. By choosing the most appropriate leadership style for the situation, an effective leader provides a lasting impact.

Employee Morale

Using the commanding leadership style, leaders establish a clear distinction between subordinates and superiors. Autocratic leaders commonly make decisions without input from workers. This typically leads to low employee morale. It also tends to result in increased employee absenteeism and decreased employee retention. While leaders succeed when using this style in a crisis, such as a natural disaster, use of this leadership generally results in poor long-term results. When leaders use a coaching style instead, subordinates feel safer and encouraged to focus on their own development, which ultimately helps the company for the long term by increasing employee morale, retention and satisfaction.


Using the participative leadership style, a leader engages with employees to figure out the best way to accomplish the company’s strategic goals. This type of leader recognizes that those working closest to problems usually have the best insight for recommending process improvements that lead to productivity gains. This includes decreased errors, minimized waste, and increased customer satisfaction. Participative leaders run team-building exercises to promote cultural awareness and diversity, which can improve productivity by allowing the team to recognize each other’s strengths and value.

Decision Making

When leaders use the democratic leadership style, they accept input from their subordinates to make key decisions. They encourage feedback and suggestions from everyone, at every level of the company. This process takes a while, so even though employees feel more empowered, decisions can take a considerable length of time. When leaders use the laissez-faire leadership style, they delegate all responsibility to their subordinates. If the team has considerable experience, its members can make their own decisions quickly and this works out well. If the team lacks the skills and knowledge to make appropriate decisions, chaos usually ensues.


An effective leader sets a clear direction, communicates the goal, and ensures that subordinates align their own objectives to the strategic plan. This leads to long-term profitability and growth. For example, to ensure high rates of customer satisfaction, a successful leader encourages subordinates to eliminate any processes that don’t ultimately benefit the consumer. This helps focus the entire company on gathering comprehensive requirements from sponsors and stakeholders, prioritizing work with the greatest impact, and optimizing processes so the company makes money. When leaders don’t establish clear priorities, subordinates focus on different metrics. This often causes conflicts between departments and results in a dysfunctional company.