Importance of Different Leadership Styles in Business

Subject: Leadership Styles
Pages: 1
Words: 398
Reading time:
2 min
Study level: Bachelor

The differentiation of leadership styles allows for their effective use in different settings for the most relevant purposes to organizations. Four main leadership styles have been identified by James McGregor Burns. They include transformational, transactional, charismatic or visionary, and participative leadership styles. Each of these styles has its benefits and might help solve specific leadership tasks and organizational issues through the provision of tools and strategies within the chosen framework.

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Firstly, transformational leadership is the style that envisions a leader as an inspiration and a guiding example for the subordinates. According to Burns (1978), transformational leadership is based on such moral values as justice, equality, and liberty. A transformational leader is driven by a big picture, which implies a general organizational goal, while the means for achieving this goal are left for employees, who are empowered to apply their skills and creativity. It is most effective for organizations that prioritize long-term goals and strive for creativity and teamwork. Secondly, transactional leadership is the style that necessitates leaders to prioritize specific tasks within short-term organizational goals, control the performance, and report at all levels of work completion. In transactional leadership, employees are instructed precisely and are driven by responsibilities without much freedom of decision-making. The principal values in this style are responsibility, commitment, and honesty (Burns, 1978). Transactional style is most effectively used in the context where short-term and highly efficient results are required.

Thirdly, charismatic or visionary leadership is characterized by a strong impact on the personality of a leader whose charisma helps them influence and lead teams. The most effective application of this style would be in the private sector and entrepreneurial entities, where the leader can execute personal judgment and lead people toward anticipated company goals. According to Burns (1978), charismatic leadership is attributed to dedication, creativity, and the role of personality. Finally, participative leadership is the style that necessitates the leader’s inclusion in the processes and the inclusion of teams into the organizational decision-making. Leaders using such a style are commonly concerned with the opinions of the whole members of the organization, who work together to resolve organizational issues. This style would be best applicable to settings when no fast decisions are made and where creativity and competence are prioritized. In summation, each of the four discussed leadership styles has its particularities that might be used for the benefit of an organization when applied properly.


Burns, J. M. (1978). Leadership. Harper & Row.