Business Leadership – What Is It, And What Types Are There?


Decision-making is essential to achieving the objectives of a company. That is why business leadership is so necessary within any organization, and the selection of the type of philosophy that your company has will be decisive to achieve its goals.

There are different types of leaders within companies, which we will discuss in detail in this article.

What Is It To Be a Leader?

A leader is an individual who has decision-making skills. Throughout our history, this figure has been essential for the development of society and civilization. Some examples are great men and women like Alexander the Great, Julius Caesar, Cleopatra, Gandhi, and Mandela.

As social beings, we often need someone capable of leading the group. Businesses are no exception to this rule. Every human process depends on the coordination of shared efforts to achieve an end.

What Characteristics Should Successful Business Leaders Have?

For an individual to be considered an excellent leader of a company, they must have specific skills and characteristics that will allow them to stand out from the rest. These are:

  • Excellent communication. A leader has communication skills worthy of his position. This means having excellent oratory, eloquence, and ease in conveying ideas.
  • Empathy. She can establish a bond with her peers, putting herself in their place.
  • Responsibility. He is the first to assume the commitment by not abandoning his tasks and not blaming third parties.
  • Effort. A leader is characterized by making every effort to achieve goals.
  • Flexibility. A born leader understands situations and contexts to know how to adapt to the circumstances that arise and will grant the same flexibility to his subordinates.
  • It’s an example to follow. Leaders lead by example. Being an authority figure within the groups, there is coherence between what they say and do.
  • Teacher. An excellent leader helps to get things done, understanding that the key to success is teaching the team about the tasks to carry out correctly.

What Types of Business Leadership Are There?

In the business world, there are various types or styles of leadership. Depending on the nature of the organization, it is not surprising that the leader of a company adopts one or another style, which we detail below:

Laissez Faire Leadership

This type of leadership in SMEs is based on the premise that the employees of a company have the necessary skills, experiences, and tools to carry out their work correctly so that the direct intervention of the leader is harmful. Hence, it exerts a passive role in the processes.

This philosophy was born in France and is quite valuable for small companies.

Democratic Leader

A democratic leader exercises leadership in companies by promoting the entire team’s participation. It is common for him to consult the workers for their opinion before making decisions, fostering dialogue and, thus, commitment to it.

Transactional Leadership

When we talk about the leader of a company that exercises the transactional style, we refer to the one who uses the reward system to carry out his work. This rewards employees for performance, thus increasing motivation to meet company goals.

This leader seeks to create structures where workers can work to achieve the goal. He highly values ​​meritocracy above all else.

Transformational Leader

This type of company leader encourages innovation, taking into account the team’s ideas in the company’s internal processes. An example of this type of leader could be Steve Jobs or Bill Gates, known for applying innovative technological solutions to their companies and achieving success.

Situational Leader, Another Type of Ideal Business Leadership

It is a leadership style based on the ability to adapt to the circumstances that may arise in the organization. It operates based on your company’s skills, tools, and characteristics.

It is flexible; that is, it adapts to the circumstances. The leader knows the maturity and preparation of his workers. Likewise, he knows the needs of his company and, based on this, applies the leadership style that adapts to the current context of his company.

Many experts consider this the most suitable type of leadership in companies to achieve the objectives since it sensibly incorporates the positive aspects of all the previous styles.

Also Read: Business Coaching – What It Is, What It Is For?

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