Key Theories of the Nature and Exercise of Leadership in Organizations

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What’s Leadership?

Leadership means different things to different people, and a definition of it often depends on the defining person’s perspectives, philosophies, traits, profession, and values. However, the term is generally understood as managing, directing, guiding, or inspiring others to focus on attaining shared aspirations. The functions of a leader in this regard may vary depending on the organization involved and the prevailing circumstances. Additionally, there is a leader in every aspect of the human life, including social, political, and economic settings. As such, reliable, effective, and efficient leadership is a highly-valued and a highly sought-after commodity.

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Most people believe that the success of an institution – be it social, political, or economic – depends on the existing leadership. However, some think that leadership is not necessary in today’s corporate organizations. For example, in the 2004 book “The myth of leadership: Creating leaderless organizations,” the organizational consultant Jeffrey S Nielsen debunks leader-based hierarchies in contemporary corporations, offering a peer-based paradigm as the more desirable alternative. According to Nielsen (2004), it is time to stop structuring institutions as rank-based as this creates a small set of privileged elites so isolated from front-line workers that they are downright counterproductive.

Nielsen (2004) advocates for the elimination of hierarchies in contemporary institutions by demystifying “the myth of leadership.” He believes that by eradicating ranks, organizations will be more productive and successful. Hierarchies encourage miscommunication, foster secrecy, and steal joy and dignity from work (Nielsen, 2004). Unfortunately, in the absence of equality, open and honest communication is rare. Indeed, most employees tend to tell their seniors what they think the seniors want to hear and tell their juniors what they think those juniors need to know. This state of affairs implies that genuine communication can only occur among equals, and that secrecy breeds abuse of power and corruption. Scholars advocating for leadership or simply examining its nature have also developed additional theories, some of which are discussed below.

Trait vs Skills Theories

Postulations based on individual traits and skills are among the commonest leadership theories. They emphasize the importance and role of a leader’s personality characteristics, skills, and capabilities. According to Northouse (2019), trait theories include the trait approach, great man theory, innate versus acquired leadership qualities approach, and extroversion versus introversion. Skills theories focus on technical, human, and conceptual skills.

Trait Theories

Trait theories focus on personal qualities and characteristics, and how they influence or affect a person’s performance as a leader. They cover such issues as assigned and emergent power, innate and acquired leadership, and introversion versus extroversion. The perspective of the trait theories is that leadership is intertwined with various characteristics.

Trait Approach

The trait approach is a leadership model that explains the influence of traits on leadership. According to Northouse (2019), the major leadership traits include intelligence, integrity, self-confidence, sociability, and determination. Each of these traits helps leaders to deal with the dynamic and challenging nature of the issues that come with managing, directing, and inspiring people. Higher intelligence – evidenced by strong verbal, perceptual, and reasoning abilities – tends to be present more abundantly in leaders than non-leaders (Northouse, 2019). Notably, intelligence is only more useful when it does not exceed the follower’s level by a significant margin, otherwise the leader will have ideas that are too advanced for the led. Self-confidence is necessary in leadership because it assures the leader that his or her competencies and skills are appropriate and right. Determination – the desire to get the job done – includes such effective leadership characteristics as persistence, initiation, drive, and dominance (Northouse, 2019). Determined people are assertive, proactive, and can persevere in the face of obstacles. Integrity – the quality of trustworthiness and honesty – characterizes individuals responsible for their actions and adhering to strong principles (Northouse, 2019). People with integrity are also dependable, loyal, non-deceptive, and inspire confidence in others. Lastly, sociability is the leader’s inclination or tendency to want and actively pursue pleasant and fulfilling social relationships (Northouse, 2019). Sociable leaders are outgoing, friendly, tactful, courteous, and diplomatic.

The Great Man Theory

The great man theory is similar to the trait approach in that it focuses on individual characteristics. However, rather than just listing these ideal traits, the great man theory postulates that some people are born with the attributes that distinguish them from others, making them successful leaders. According to Northouse (2019), statements such as “he is a born to be a leader,” and “she is a natural leader” show that some people have special, innate characteristics or qualities that make them successful leaders. It is also these special characteristic and qualities that differentiate leaders and non-leaders. These innate qualities and characteristics could include such physical attributes as height, personality features (such as introversion and extroversion), and other characteristics (such as intelligence) (Northouse, 2019). Notably, individuals may also become leaders by virtue of their organizational or societal position whereas others acquire leadership as a response to how others react to them (Northouse., 2019) These two common leadership types are referred to as assigned and emergent leadership, respectively.

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Innate vs. Acquired Qualities

As noted earlier, members of society sometimes associate some innate characteristics and qualities may with good and effective leadership. Such communities will automatically assign the “leadership” tag to any individual exhibiting these desirable characteristics. Assigned leadership may also occur due to a person’s occupation of an influential position either in an organization or the society (Northouse, 2019). Examples of such individuals include managers and supervisors planted in different departments or sections by the company chief executive officer or other appointing authority. Often, the appointing authority will examine the potential candidate’s innate characteristics and qualifications before elevating them to leadership positions (Northouse, 2019). However, this assigned leader does not always become the true leader influencing others in the company or society. Such positions may go to leaders emerging from the group based on how other members perceive them (Northouse, 2019). The emerging leader may also possess specific innate characteristics that set them apart from the rest. These characteristics and qualities can include dominance, confidence, and intelligence (Northouse, 2019). Gender-biased perceptions can also affect leadership emergence within groups.

Extroversion vs. Introversion

Extraversion and introversion are the same part of the “extraversion” component of the five-factor personality model. The other four include neuroticism, openness, agreeableness, and conscientiousness. Neuroticism describes a person’s tendency to be anxious, depressed, vulnerable, insecure, and hostile. Extraversion, whose opposite is introversion, describes a person’s tendency to be assertive, sociable, and positively energetic. It is related to openness, which is the tendency to be creative, informed, curious, and insightful. Some people are also more agreeable than others, which means they are more conforming, accepting, nurturing, and trusting. Lastly, conscientiousness describes a person’s tendency to be organized, dependable, controlled, and decisive. All these qualities are used to assess how personal traits affect leadership. The trait approach suggests that effective leaders tend to be less neurotic and more extroverted, agreeable, open, and conscientious. However, this is not always true as the personal traits and characteristics of a leader may vary depending on the prevailing leadership circumstances.

The concept of power is also related to the idea of leadership because it is part of the influence process. Therefore, discussions about leadership types and the associated traits cannot be complete without looking at power, which is defined as a person’s capacity to influence. A person is powerful when he or she can affect others’ beliefs, courses of action, and attitudes. Generally, the six bases of power include referent power, expert power, legitimate power, reward power, coercive power, and information power (Northouse, 2019). Referent power is based on the follower’s liking of the leader for whatever reason. Expert power occurs when the followers perceive the leader as competent in a given area while legitimate power is connected with having some authority. Having the capacity to reward others leads to reward power, and the capacity to punish or penalize others causes coercive power. Lastly, if a person possesses the knowledge and skills that others need or want, they have information power.

Skills Theories

The skills approach is another notable collection of general theories of leadership. Unlike the trait theories, skills theories focus on individual abilities and competencies in different social, political, and economic spheres. The skills approach is similar to the traits approach in that it takes a leader centered perspective on leadership. Generally, the skills approach suggests that people need some knowledge and abilities to function as effective leaders. These necessary knowledge and skills are classifiable into technical, human, and conceptual skills.


Technical skills refer to knowledge or proficiency in a sophisticated area or field. Often, technical skills suggest high academic qualifications or vocational training. People spend a significant amount of time acquiring technical skills as the associated knowledge is not freely available in the public domain. People with technical skills qualify as leaders because they have knowledge that they can use to influence others and cause them to focus on achieving set goals and objectives. For example, technical skills involve the ability to use some tools, appliances, or apparatuses. People with technical knowledge are considered experts in those areas, and are difficult to replace in some cases. Although most technical abilities are acquired through formal or informal training, some individuals are naturally gifted in some areas. For example, some people have been known to make smart technical inventions despite lacking any form of training. Naturally gifted engineers, computer scientists, and machine operators require little or no training to become experts in their fields.


Human skills are also called people skills, and it refers to one’s ability to work successfully with people. Tus, the main difference between technical and human skills is that the former involves working with things while the latter involves working with people (Northouse, 2019). Leaders with human skills can work effectively with their peers and followers to accomplish specific goals and objectives. Notably, human skills imply the presence of specific personality traits that enable an individual to have successful relations with others. For example, a leader with people skills is tactful, diplomatic, courteous, communicative, friendly, and open-minded. These leaders could also be intelligent, confident, determined, and of high integrity. They can adapt their ideas to those of others and create environments that foster trust, cooperation, and collaboration. They can inspire followers to do their best by motivating and encouraging them constantly. Most importantly, people leaders are sensitive to the needs of those around them and often make decisions after carefully considering their repercussions beyond the obvious. Like technical skills, human abilities can either be innate or acquired through training and life experiences.


Lastly, as the name suggests, conceptual skills refer to a person’s ability to work with concepts and ideas. Whereas human skills deal with people and technical skills deal with things, conceptual skills deal with abstract thought, concepts, and ideas (Northouse, 2019). Leaders with conceptual skills can create and implement effective strategies and plans that improve the performance and effectiveness of a company. They are comfortable talking about ideas that shape the company, and are not afraid to think outside the box. In some cases, leaders with conceptual skills have seemingly outrageous ideas that their peers or followers may not understand. These leaders are also open to criticism and are willing and able to refine initial concepts and thoughts into workable ideas or products. Top and middle management leaders need conceptual skills more than supervisory managers because they are responsible for developing and implementing effective corporate strategies.

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Transformational vs. Transactional

Transformational and transactional leadership has been the focus of numerous studies since the 1980s. They are generally considered as among the most current and popular leadership approaches in use today. As part of the “new leadership” paradigm, transformational leadership emphasizes affective and charismatic elements of leadership. Just as the name suggests, transformational leadership leads to the transformation of people, processes, and operations to make organizations more profitable or successful. Transformational leaders understand that the surest way to cause improvements is changing business aspects that are ineffective and facilitating waste reduction. It also helps employees to acquire new attitudes, knowledge, and skills that let them succeed in their daily operations. A Transformational leader uses motivation to inspire employees to better themselves and achieve greater success.

Transactional leadership is closely related to transformational leadership. The main difference between them is that transactional leaders fail to individualize follower needs or help them grow and better themselves. Instead, the transactional leaders, as the name suggests, transact with their leaders by exchanging valuable things with followers to advance personal agendas, and the agendas of the followers. Without this seemingly mutually beneficial arrangement, it is difficult or impossible for the transactional leader to inspire others. A good example of a transactional exchange occurs when politicians win new votes by making promises or campaign pledges. When that leader gets into office, they will make changes in accordance with the campaign pledges and anticipation of future votes. Transactional leaders rarely if ever participate in activities that do not result in some gains for both the leader and the led.

Behavior Theory

Behavior theory is one of the leadership theories focusing on human behaviors. It analyzes the antecedents and results present in the leader’s environment. It also looks at how the experiences the leader has obtained through the years have changed his or her notions, perspective, and thoughts about a given phenomenon. the main assumption of the behavior theory is that people may have specific behaviors that make them better leaders than others. Such behaviors could include effective time management, proper communication, emotional intelligence, and collaboration. Effective leaders are excellent time keepers because they plan their activities, stick to a schedule, and maintain a regular and predictable routine. As leaders begin to interact with an increasing number of people, they may find themselves having less time in their disposal. Therefore, if they fail to prioritize activities in advance, they may be ineffective in meeting deadlines and significant goals or milestones. Other behaviors that effective leaders may have include conflict resolution, budgeting, and negotiation skills. It is impossible to exhaust all possible behaviors that leaders can have because they acquire new ones along the way as becoming more experienced.

Task vs. Relationship

The characteristics of a task may affect how a leader influences his or her followers to achieve the set objectives. When tasks are simple and straightforward, the leader has a simple duty of supervising performance. However, when tasks are complicated, the leader may have difficulties encouraging workers to do their jobs. Complicated tasks may also force the leader to be always available rather than delegating duties. Training followers to do complicated tasks can also be more expensive and time consuming that training them to do simple tasks. Therefore, the relationship between the leader and his or her followers sometimes depends on the tasks at hand and the level of their difficulty.

Style Theory

The style theory asserts that leaders inspire their followers to achieve the intended objectives in different ways. Style is mostly a personal preference, which means that it may or may not have any practical implications on the job itself other than impacting employee motivation, job satisfaction, and results orientations. Common leadership styles that scholars have explored extensively include democratic, autocratic, and laissez-faire.


Democratic or participatory leaders invite and allow participation from the led. The democratic leader never imposes his or her ideas on anyone despite being in charge. By encouraging everyone to participate in decision making and solution development, democratic leaders motivate and inspire their followers. They also increase the chances of obtaining a more successful solution than going back and forth. Followers working under democratic leaders are always motivated and inspired because their opinions and thoughts are considered in decision making. When employees see that they have a say in a process, they start considering themselves as integral components of that process. Thus, they dedicate themselves fully and become committed to the course without needing to be pushed. The main problem with democratic leadership is that it may lead to delays in decision making as leaders and their followers deliberate on issues and find a common ground to stand. However, there are fewer or little cases of conflicts in democratic leadership because members resolve issues amicably rather than forcefully.


Autocratic leadership is the opposite of democratic leadership, and is exemplified by the use of force and policy dictation to get things done. When a leader is autocratic, he or she does not negotiate positions with his or her followers. Instead, they dictate policies and procedures, and decide what the employees should do or achieve. Because the autocratic leader does not consult the followers before making decisions, followers may grow resentful of the leader. Therefore, this approach creates fear and tension within groups and causes people to have little or no job satisfaction. Some autocratic leaders make decisions from their knowledge, skills, ideas, and judgement of the situation, and may accept some advice where they are uncertain. However, for the most part, the leader does not seek or accept unsolicited advice. In this type of leadership approach, employees may be fearful as they wish to preserve their jobs. They are also likely to finish their duties on time as everything expected of them is clear and well-defined.

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BusinessEssay. (2022, September 9). Key Theories of the Nature and Exercise of Leadership in Organizations. Retrieved from


BusinessEssay. (2022, September 9). Key Theories of the Nature and Exercise of Leadership in Organizations.

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BusinessEssay. (2022) 'Key Theories of the Nature and Exercise of Leadership in Organizations'. 9 September.


BusinessEssay. 2022. "Key Theories of the Nature and Exercise of Leadership in Organizations." September 9, 2022.

1. BusinessEssay. "Key Theories of the Nature and Exercise of Leadership in Organizations." September 9, 2022.


BusinessEssay. "Key Theories of the Nature and Exercise of Leadership in Organizations." September 9, 2022.