What is leadership in Business?

Nature of Leadership

Leadership is the process of influencing the activities of an individual or a group for goal achievement in a given situation. According to Keith Davis, “Leadership is the ability to persuade others to seek defined objectives enthusiastically. It is a human factor which binds a group together and motivates it towards goals.” Leadership process consists of three factors—leader, the follower and other variables. The following are the important elements in the process of leading.

  1. Leader tries to influence the individual in a particular way.
  2. Leadership makes interpersonal influence possible. It is rooted in feelings.
  3. It is a dynamic and ever evolving process; a manager must lead continuously.
  4. It is exercised in a particular situation. The situation variables affect the effectiveness of leadership.

Leadership and Management

Leadership is sometimes interpreted as synonymous or similar to managership. Management has been defined as the technique of executive leadership. A good leader is not necessarily a good manager but an effective manager must have many of the qualities of a good leader. He is likely to be more effective if he has leadership qualities. A successful manager does not depend only on formal authority. As a leader, a manger must interpret the common objectives to his subordinates and inspire them towards the achievement of these objectives.

Type of Leadership (Leadership styles)

The problem of leadership style is basically concerned with deciding the extent to which a manager should be dictatorial and the extent to which he is supposed to be participative. Different leadership styles can be categorised as follows.

  1. Authoritarian or autocratic style.
  2. Democratic or participative style, and,
  3. Laissez faire or free rein style.

Autocratic leadership

This type of leadership is one-man orchestra. He shows the following characteristics:

  1. He gives orders which he insists shall be obeyed.
  2. He determines policies for the group without consulting them.
  3. He gives no information about future plans but simply tells the group what immediate steps they must take.
  4. He makes personal praise or criticism to each member on his own initiative.
  5. He remains aloof for the greater part of the time.

Democratic leadership

This type of leader has the following qualities:

  1. A democrat gives orders only after consulting the group.
  2. He sees to it that policies are worked out in group discussion.
  3. He never asks people to do things without giving long term plans on which they are working.
  4. He makes it clear that praise or blame is a matter for the group.
  5. He participates in the group as a member.

Laissez faire leadership

Such a leader shows the following qualities:

  1. This leader does not lead.
  2. He leaves the group entirely to itself.
  3. He does not participate.

He may be a man who has been given leadership on grounds of technical knowledge but may be incapable of assuming any control over his subordinates.

Leadership as a Continuum

There are, in fact, a variety of styles of leadership behavior between two extremes of autocratic and free rein. Tennenbaum and Schmidt have depicted a broad range of styles on a continuum moving from autocratic to free rein.

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