The 9 Leadership Styles In Business

The 9 Leadership Styles In Business | Real Check Stubs™
July 9, 2023
Time to read: 19 Minutes
July 9, 2023
6 min read

A leader is an essential core role for everything to work, countries, governments, companies, teams, groups, etc. Leaders provide help of all sorts, clarity, motivation, constructive criticism, new strategies, and much more.

A leader can differ. There are many different leadership styles. You can be a democratic leader, or transformational leader, an autocratic leader, a laissez-faire leader, etc. Others can have other leadership styles.

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The Difference Between Leadership and Management

Two distinct objectives for leadership and management require different skill sets. We're trained to respect those in authority and their elders. However, job title and age do not play any part in the manager's conversation. Leaders inspire people, and the manager gives advice. This is the main difference here. Managers could be leaders and vice versa - both require differing approaches.

The Importance of Developing a Leadership Style

Survey results showed that 65% of employers believe interviewing leaders in leadership positions can help assess candidates' abilities and success. As your leadership skills develop, you will likely be using various processes to accomplish your employer's goals or satisfy employee needs. To be effective managers, you may employ multiple leadership styles. You can learn the skills needed to become an effective leader as long as you know the various styles.

Leadership Styles

A leadership style refers to a leader's behaviors when coordinating, spurring, directing, and overseeing bunches of individuals. Excellent pioneers can motivate political developments and social alter and spur others to perform, make, and enhance. Here are some leadership styles that are more popular in modern-day leadership.

1. Democratic Leadership

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Democratic leadership, also known as participative leadership, is where the leader takes input from their team before making big decisions. This means that everyone has a say in the matter and teaches employees how to make wise business decisions. It also shows how their opinions are valued in the workplace. 

How Does Democratic Leadership Look In Businesses:

Democratic leadership is, of course, similar to how America is run. By voting, all citizens get a say in who to elect into office and what levies to pass. In businesses, team members are given the option to voice their input on any decision brought to them, and they debate about what to do. This makes all employees feel equally valued and appreciated by their leader and peers and gives the leader good insight into what the employees want most. 

How This Leadership Style Benefits the Employees:

Democratic-styled leadership is one of the most sought-after leadership styles by employees. This can be because it permits lower-level employees to work out the authority they'll need to use wisely in future positions.

Challenges Democratic Style Leaders May Face:

Reaching a compromise with your employees may take time and back and forth. This means that big decisions may take longer for your company to decide. Some team members may not be cut out to make these decisions.

2. Autocratic Leadership Style

authoritarian leaders, autocratic leadership, autocratic leaders

Autocratic leadership, also known as authoritarian leadership, is the direct opposite of democratic leadership. Leaders who practice this style do not take any advice or input from their employees before making decisions. This type of leadership is one of the most common, especially in bigger businesses and companies. 

How Does Autocratic Leadership Look In Businesses:

In a business, autocratic leaders have lots of drive and focus, which often benefits the business by giving it a specific direction at all times. This may lead to better performance and a thriving work environment for employees who need guidance. 

How This Leadership Style Benefits the Employees:

Autocratic leadership is good when employees cannot reach a compromise or when the company is making a very important description in a short time frame. Workers are also given what direction they should go in at all times, meaning they will always know what they should work on or towards. If an employee is new or less experienced, this type of leadership will work well for them. 

Challenges Autocratic Style Leaders May Face:

Employees who like to work independently or dislike being closely managed will not thrive under this type of leadership. That means that there may be a good amount of turnover in your business. Make sure to let potential employees know what kind of leadership style happens in your company to find people suitable for that environment. You may also face managers or other leaders that tend to micromanage your employees.

3. Laissez-Faire Leadership

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You may remember learning about the term "laissez-faire" in history class. It is a French word that translates to "leave alone" (or, more directly, "let them do." This form of leadership is one of the least interactive between the leaders and employees. 

How Does Laissez-Faire Leadership Look In Businesses:

Leaders who practice Laissez-Faire leadership tend to leave their employees more on their own and give them space to do their own thing. This means they must have workers they trust with skill sets suited for the job. Businesses that use this type of leadership often have a more relaxed workplace, which is a great leader for employees working remotely or in-house.

How This Leadership Style Benefits the Employees:

Employees who work under a leader who practices laissez-faire leadership are less stressed about working towards a deadline and can work in a more relaxed, peaceful environment with no boss breathing down their back. This can encourage the employees to work at their own pace knowing they have the complete trust of their higher-ups. Workers feel more valued and appreciated in this type of workplace and, in return, do good work. 

Challenges Laissez-Faire Style Leaders May Face:

While this leadership style helps employees feel valued and trusted, that trust can be taken advantage of. Additionally, new or less experienced employees may struggle to adjust to their new environment or get work done without guidance or deadlines. It's essential that while leaving your employees to do their own thing, you should still check up on them every now and then, especially if they're newer.

4. Strategic Leadership

Strategic Leadership

Strategic leaders consider what will make the employees happy and the company wants. They keep in mind the many needs that their team members might have while leading with the decisions and interests that the executives have. Since they are taking on so much in both aspects, strategic leaders may be very busy.

How Does Strategic Leadership Look In Businesses:

Strategic leaders try to help their workers grow and love the environment they work in a while simultaneously considering executive interests and trying to work them into their workplace. They often try to look way ahead to anticipate what's coming and prepare their team for it before anything even happens. 

How This Leadership Style Benefits the Employees:

Strategic leadership is wanted by many companies, big or small, because they take corporate and employees' interests and wishes into account. While this may become a lot for one person, strategic leaders often are willing to take it on for the sake of the company and their team. They encourage their employees to grow, motivate them, and plan for the future. 

Challenges Strategic Style Leaders May Face:

Leaders who practice strategic leadership may fill their schedule too much and, as a result, be unable to keep up with their employees and projects. Since they try to focus on the future, they may miss something important right in front of them. These leaders must look for future growth and pay attention to their team's needs in the now.

5. Transformational Leadership

Transformational Leadership

Transformational leaders are very much what the name sounds like; it's a leader constantly transforming and improving themselves and the company goals. In some workplaces, employees will do the same tasks every day even if they aren't believed to be helpful or needed. On the other hand, in a place with a transformational leader, tasks may be changed or shifted between employees to increase productivity and motivation. The leader may push employees outside their usual tasks and comfort zone to help them grow and improve. 

How Does Transformational Leadership Look In Businesses:

Transformational leaders are a great addition to any business because they will help the company and its employees to grow. Employees will be inspired to think outside the box and think of new ideas to improve their everyday assignments and the company. This helps employees to be more motivated, increases their sense of value, and improves their everyday work environment. 

How This Leadership Style Benefits the Employees:

In this type of leadership, employees are pushed to achieve more than they thought they could. They will often be given goals that start simple and increase in difficulty as they continue to work there. This method helps employees to grow at a faster rate and increase their self-esteem in the workplace. A transformational leadership style is encouraged in more flexible companies and works well for small businesses as well. 

Challenges Strategic Style Leaders May Face:

Many transformational leaders tend to lose sight of each employee's original skills and goals. These types of leaders should always remember that not every one of their employees will learn and face different issues the same way. Pushing your employees too hard can also lead to them burning out and losing motivation.

6. Transactional Leadership

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Transactional leaders are very common in today's companies. They give out rewards to their employees for the work that they do. It's sort of similar to when a class reaches a certain amount of books read and receives a pizza party. This leadership gives employees an incentive to work but increases pressure to succeed. For this style to work, employees must already have an established structure in the workplace. 

How Does Transactional Leadership Look In Businesses:

Transactional leadership focuses on results instead of the employees' process to get there. There is often a set system of rewards or penalties that are used as an incentive to get employees to work harder, increase motivation, and reward commitment to the company.

How This Leadership Style Is Good for Your Employees:

Employees will be able to understand and aim for their expected goals fully. Receiving rewards may also help them to be more motivated to work.

Challenges Transactional Style Leaders May Face:

Leaders who practice transactional leadership may find it harder to form bonds and relationships with employees. It can also decrease motivation and increase stress if too much is expected from your workers in a short timeframe. The fear of punishment may motivate people to work harder, but it will ware down on them and bring them closer to burnout.

7. Coaching Leadership

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Coaching leadership can be compared to a sports coach focusing on each player separately and the team as a whole. They strive to make each person the best they can be and help them work efficiently together. This leadership type helps employees grow and gain experience in their field. Coaching leaders also encourage workers to learn from each other and become proficient at new skills daily. You could say that coaching leadership is a combination of multiple leadership types, including democratic-styled leadership.

How Does Coaching Leadership Look In Businesses:

Leaders who practice a coaching leadership style encourage their workers' skill development and critical thinking skills. They may create goals for their employees to reach but will help them if they struggle to get there. This type of leadership brings long-term employees that enjoy their workplace. 

How This Leadership Style Is Good for Your Employees:

This style helps bring out each employee's skills and improves upon them. They make teams of workers that can get a lot done in a small time frame because of the attention and focus on every one of the employees. Groups that work under these leaders often have high performance and good communication. 

Challenges Coaching Style Leaders May Face:

This type of leadership may not be for everyone, and some employees may struggle in this environment. Employees must be able to put in the time and patience to develop their skill sets. In big companies, this leadership style may not work as well compared to smaller businesses with more flexibility.

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8. Bureaucratic Leadership

Bureaucratic leaders always follow company policy and practices. While they may be a little more likely to hear employees' input and opinions, they will not hesitate to shoot any ideas that go against the company. 

How Does Bureaucratic Leadership Look In Businesses:

Bureaucratic leaders are often found in bigger, older companies. They are seen as more traditional and are ready to reject any ideas that do not go along with existing or old business practices. They think since the company is already successful, why change anything? Since new ideas will end up using resources and aren't guaranteed to work, many bureaucratic leaders don't see the use in even trying. 

How This Leadership Style Is Good for Your Employees:

Employees who work under a bureaucratic leader may feel like it is very challenging since they are full of ideas to improve the company. This is common with newer, younger employees, and this type of leadership brings comfort to employees who don't enjoy change and like things the way they already are. Leaders practicing bureaucracy may have a clear intention, but since they are so closed off to new ideas, it may squash creativity in the workplace. 

Challenges Bureaucratic Style Leaders May Face:

This type of leadership may quickly shut down new ideas and innovation, which would not be a good idea for smaller businesses or companies looking for rapid growth. Team members under bureaucratic style leaders may feel less controlled but helpless to change anything. 



Challenges Bureaucratic Style Leaders May Face:

This type of leadership may quickly shut down new ideas and innovation, which would not be a good idea for smaller businesses or companies looking for rapid growth. Team members under bureaucratic style leaders may feel less controlled but helpless to change anything. 

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9. Visionary Leadership

Visionary leaders focus on what's coming in the future for the company and its employees. Leaders who practice this type of leadership are often very good with words and can motivate employees easily. 

How Does Visionary Leadership Look In Businesses:

Since they are always looking ahead, visionary-style leaders can often make clear, concise plans for their team members to follow. This means employees can do their work and know exactly what they're working towards. It also helps to grow businesses that are unsure of their long-term plans. 

How This Leadership Style Is Good for Your Employees:

People working under visionary leaders can work more efficiently and enjoy their work. This type of leader is suited for younger employees, full of drive, vision, and motivation. Visionary leaders help to encourage growth and vision to inspire employees to want to work and be engaged in it. 

Challenges Visionary Style Leaders May Face:

Like strategic leaders, visionary leaders may become too focused on the future that they don't pay attention to everyday problems their employees face. They also tend to have laser vision of one goal and don't think of anything else they could do to improve other workplace areas.

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Finding Your Own Leadership Style

In the end, there is no "best leadership style." It depends on what works best for you and your employees. You can read through the descriptions of each leadership style to see which one is most like what you currently practice. Then, you can read the challenges and see where you might be falling behind in your current leadership style.

Keep Your Leadership Style True to Yourself

Each leadership style is unique. You may fit under more than one leadership style. It's easy for your style to shift as the situation and challenges shift. You may have used three different leadership styles in the past year.

Whatever you do as a leader, stay true to yourself. Just because doing a specific action doesn't fit into a leadership style doesn't mean it isn't true to you and your style. People like you because of who you are, so acting like a different kind of leader would grant you more problems than benefits.

Being yourself is effective because you understand all the ins and outs of being you. You have accumulated this knowledge and experience from years of being you, and you lack this understanding of the ins and outs by trying to be someone else.

The understanding of those ins and outs is what makes a personality work. Without that understanding, you are likely to respond incorrectly to situations. With that understanding, you can continually become a better version of yourself and a more magnetic leader.

Frequently Asked Questions (FAQ)

Whether it is how to implement your newfound knowledge in the real world, figuring out which style you should use, or finding out the styles of the rich and famous, we've got you covered. Our frequently asked question section will help you find answers to questions you might have.

Why Is It Important to Understand Your Leadership Style?

What does leadership style mean? Understanding your way of leading and pursuing your goals is vital for the growth and impact of your organization. Knowing your leadership style can help you to find employees who work well under that kind of leadership. For example, you can say in job postings, "Our managers use a democratic type of leadership." This will bring in candidates that want or have experience with democratic leaders and will lessen your turnover rates since they know exactly what to expect.

Not only will knowing your style help your employees, but it will help you too. When you go to instruct your workers, you can think about how your style of leadership would handle it and take that into account. For example, if you are a strategic leader and want to implement a new company policy in the workplace, take a step back and think about how to do that in a way that also benefits your employees.

How Do I Choose the Right Leadership Style for Myself?

There are various ways of selecting a leadership style, and not everyone fits into one category. You will most likely relate to multiple leadership styles at once, and that's ok! A diverse leadership style can also be good for you and your employees. You can always take an online leadership assessment and see the results you get from the assessment.

Then, if you don't already, you can practice using that leadership style in the workplace. See how it works and how your employees feel about it. If they react positively and you feel good as a leader, congrats, you've found the right leadership style! But, if they respond negatively and productivity in the workplace decreases, then you may want to try a different form of leadership.

What Leadership Styles do Famous and Successful Business Leaders Use?

Wondering what leadership style the most successful and famous business leaders of our era use? Wait no longer; here, you will discover the leadership styles of some of the most successful people alive today.

Transformational Leaders

Elon Musk - Transforms the world around him with the help of his employees using transformational leadership. He embraces failure and encourages his employees not to be scared of failing.

Jeff Bezos - Widely known as a transformational leader for the way he has transformed the world and the lives of others. Like Elon Musk, he also embraces failure and lets it serve as a stepping stone to the next big leap in progress.

Oprah - She transforms people through her high expectations. She prioritizes fostering teamwork and cares about making an impact in the world through her leadership.

Now, these leaders are at the top because of their style, or they are transformational leaders because they are at the top and thus have the power to transform people's lives in a big way. It seems transformational leadership is common in many of the most successful people today and is something to take note of if you want to reach higher levels of success.

Looking at all these successful people who employ the transformational leadership style can feel inspiring, but it can also make you feel disenchanted as you are very far from them in terms of success. It makes you wonder, would it be best for me to be a transformer right now, or should I stick with another style? As mentioned earlier, you should stick with the style that is true to who you are. However, it is reasonable if you see yourself as making a good transformational leader in moving more in that direction now that you see the levels of success they reach.

Autocratic Leaders

Martha Stewart - She is a perfectionist and has her eyes on every detail of her endeavors. She cares about doing things the "right way." Her dedication to wanting things done a certain way shows in her managerial style, where she has set up her work structures to be highly controlled and determined by her exclusively.

With autocratic leaders, it's important to note just because someone runs their business in an autocratic manner and wants things done a certain way doesn't mean they endorse autocratic government ideas. Many autocratic leaders believe it is better for them to make most of the decisions in their environment than to delegate that duty to a group. 

The autocratic leadership style may stem from seeing others being unable to do things the right way or being subject to poor decisions in the past.

Laissez-Faire Leaders

Warren Buffet - Known widely for his skill at investing and as the CEO of Berkshire Hathaway, Warren Buffet gives his employees a lot of autonomy and lets them do as they think best.

The hands-off approach that laissez-faire leaders employ fits Warren Buffet well. Considering he has spent most of his life investing and playing for the long game, this relaxed leadership style makes sense. In an industry like investing, this leadership style may make a leader very successful, but letting people do as they wish with high autonomy may be dangerous in other industries.

How Can I Be a Better Leader Based on My Style?

Understanding yourself and your style makes you aware of what makes your leadership good and the potential pitfalls of your leadership style, which you should look out for. In real life, being a better leader means honing in on your style and figuring out what's best in your situation.

If you fit under the laissez-faire style best, then make it your goal to lead in a way that creates an environment where employees have high autonomy and feel relaxed. Become better at being you. Your followers follow you because of who you are; you will become an even more magnetic leader by improving who you are.


With your newfound understanding of the different types of leadership, you will find a greater understanding of yourself. This better understanding will help you improve your strong points and leverage them for better success. Focus on improving the leadership qualities inherent to your specific leadership style so that you can put your best foot forward in business and improve the job satisfaction of your team members.


We hope this guide helped you understand the different types of leadership styles and which may work best for your company. When you need paystubs for the company you're leading head over to and use our easy paystub maker.