Leadership Styles and Their Effects on Organizations


Leadership style or the way an organization or business is led by its managers and executives truly affects its success. It this is ran haphazardly, without direction and unsystematically, chances are it will not last very long. And if they last, the workplace and the employees display some kind of behaviour that maybe distinct from other organizations or businesses. But thanks to modernity and other big organizations or conglomerations which looked for quality and advancement, improvements and styles of leadership are improved. These organizations or groupings of businesses and smaller organizations conduct knowledge seminars and trainings to impart knowledge and institute reforms on styles of leaderships and improve atmosphere in the workplace. We theorize but also come into conclusion that the style of leadership truly affects the behavior of organizations and employees. This is not far from what we call quality management, for management is a form of leadership that affects the behavior of a particular organization.

Summary of Key Features

We are focused on the transformational and transactional style of leadership. This style is one of those commonly being used in organizations and businesses throughout the world. The new trend is to focus on people, for that is what is true leadership really means. It is popular because it motivates people. We cannot have a good style of leadership if we focus on the leader and his principles. Of course, his principles and the way he/she handles people do matter, but this has to be on the other way around. Meaning, the employees or followers should come first. To put it simply, the leader should know how to follow, so that he can lead, although not in the sense that he/she has to follow his subordinates. Following suggestions of ordinary employees or members of an organization is a good quality a leader should possess.

Moreover, we will discuss on the charisma of leaders and socialized leaders, for example Bill Gates, the founder of Microsoft. We found Gates’ story fascinating because of his brand of leadership that enabled the company to be one of the biggest success stories of the century, and also made the employees millionaires.

Background of Transformational Leadership

Bass and Riggio affirm the universality of the transformational leadership. They state that the “Global Leadership and Organizational Behavior Effectiveness (GLOBE) research program supports earlier notions that elements of charismatic-transformational leadership are valued leader qualities in all countries and cultures (Den Harto, House, Hanges, Ruiz-Quintanilla, & Dorfman, 1999; Dorfman, hanges, & Brodbeck, 2004, all quoted in Bass and Riggio, p. 16).”

It is therefore interesting to discuss this topic on the subject of leadership styles on organizations. Employees and followers always look to the kind of leader they want to emulate or take as a role model. This is one of the characteristics of man and the evolution of the organization. Organizations always tend to have leaders that followers tend to idolize.

Transformational leadership can by its name transform people into the kind of followers an organization must have. There are other kinds of leaders which may lead to disastrous circumstances for the organization. Some of this maybe the egocentric behaviour of leaders. What happens is that the followers will usually follow their leader, and that would be the end of the organization.

Main Topic and Discussion

Our aim is to focus on remarkable leadership styles and its affect on organizations. The particular styles are almost common in many organizations throughout the world. The ways organizations are led and managed will surely affect its success. Likewise, failure can also be caused by poor or bad style of leadership and management. Egos and selfish principles on the part of the leader can lead to the failure of leadership even in other kinds of organization such as the military. The military is a well-disciplined kind of organization, and its leaders are trained not to be egocentric, but always to look after the welfare and safety of its people. Although in some instances, lives are sacrificed in favor of principles.

There are many kinds of leadership styles but this paper would like to focus on some aspects of leadership that are very prevalent.

We can focus on a particular kind of leadership that according to Bass (1997 quoted in Bass and Riggio, p. 16) can be “found in all parts of the globe and in all forms of organizations”. In their book, the authors discuss leadership which can either be transactional or transformational.

Bass and Riggio (3) give this astounding fact on transformational leaders:

“Transformational leaders help followers grow and develop into leaders by responding to individual followers’ needs by empowering them and by aligning the objectives and goals of the individual followers, the leader, the group, and the larger organization.”

We can understand from the definition or explanation of the authors that there is an objective of improvement in transformational leadership. It is for the good of the members, and since it is for the good of the members, the organization can benefit as well. It follows. This means that it transforms people and the whole organization. In a particular organization, office or business, transformational leadership focuses on the advancement of each and every employee or worker. The employees are motivated, inspired and given rewards in various forms for their own advancement and for the organization.

Business and organizations employ this style of leadership. International organizations also employ this because they know it’s for their organization.

“Transactional leadership occurs when the leader rewards or disciplines the follower, depending on the adequacy of the follower’s performance” (Bass and Riggio, p. 8).

This new style of leadership has spread all throughout organizations and businesses that it has become a model and something many have to emulate and be serious about.

We like to cite some examples or characteristics of transformational leaders.

  1. “Transformational leaders behave in ways that allow them to serve as role models for their followers.” (Bass and Riggio, p. 6)

In this style of leadership, the leader is seen as a role model and can be “admired, respected and trusted.” The followers would like to follow or emulate the leader. He is seen as someone with “extraordinary capabilities, persistence, and determination.”

  1. Transformational leaders can also motivate and inspire their followers to work “by providing meaning and challenge to their followers.”

With this kind of leaders, the followers are inspired to work and to see for the future so that they can work and be motivated. This kind of leadership is displayed by the so-called charismatic leaders, or those who lead their people or employees with some charisma.

  1. Transformational leaders stimulate their followers’ imagination to be creative and to provide more ideas and innovations for the betterment of their company or organization.

This sort of transformational leadership stresses more on creativity and improvement. It says that there is no room for criticism but only stimulating so that out of it, new ideas, suggestions and concepts can come out of the followers.

Charismatic Leadership

Bass and Riggio say that this particular leadership can either be socialized or personalized. “Socialized charismatic leadership is based on egalitarian behavior, serves collective interests, and develops and empowers others.”

On the other hand, personalized leaders “rely heavily on manipulation, threat, and punishment and show disregard for the established institutional procedures and for the rights and feelings of others.

One example of a socialized leader is Bill Gates, the man who led Microsoft Corporation to success and made himself and his followers millionaires. Bass and Riggio say that Gates made many of his employees millionaires “via generous stock options.”

William Henry Gates III, or commonly called Bill Gates and once the world’s richest man and a high-IQ executive, uses charisma but also his intellect to lead Microsoft, although at present he has passed on the leadership to other trusted executives. Leibovich (2002), in his biographies to the world’s so-called “new imperialists” says of Gates:

“Gates is a full-contact intellect. He seeks out partners to scheme and explore with, and bash against. He handpicks the most elite ones he can find and occasionally, thrice in his life, he will find a super-partner who recasts his notion on what’s possible and what he can accomplish”.

Using his intellectual power and the charisma to lead people, he personally communicates to his trusted employees through emails. Nowadays, email is considered one of the fastest means of communication, and Gates does this to relay his knowledge and expertise in technology and leadership style to his people. However, because he is a well-informed and intellectually-gifted leader, his emails are sometimes lengthy and they cover vast areas of interest.

Richard Templar, author of Rules of Management recommends a style of leadership that is truly managerial. He has this valid and commendable points or rules that affect the behavioral patterns of employees and the workplace: a.)Get them emotionally involved; b.) Know what a team is and how it works; c.) Set realistic targets; d.) Hold effective meetings; e.) Make meetings fun; f.) Make your team better than you; g.) Set your boundaries; h.) Let them make mistakes; i.) Accept their mistakes; j.) Encourage people.

This is just a few of the recommendations of Richard Templar. Most of his recommendations are motivational and inspirational, an example of the transformational model of leadership.

Cray and Mallory studied leadership style in international organizations. They studied the leadership behaviour of American managers in Hong Kong and their counterparts in the U.S. They found that “leadership behaviours were related to job performance only for the American managers working in the US. They concluded that the fit between leadership behaviour and effectiveness depends on the appropriateness of the behaviour to the culture.”

This means that the culture of two groups of people in their study played an important role in responding to the type of leadership practiced in the organization.

Cray and Mallory further state: “The type of behaviours required to achieve success may differ from culture to culture. This is one of the enduring themes in the comparative leadership literature. However, it might also be true that the definition of managerial success varies sufficiently for the type of behaviours which are effective in one culture to have negligible or even negative effects in another.”

Knowing the culture of the people is the key to determining the king of leadership that should be instituted in the organization. The finding of the study states that the kind of leadership that is good for the Americans may not be necessarily good to the Chinese. Culture must be given preference here.

“A similar comparison of values among managers from the US, Hong Kong and China examined differences among a capitalist, a collectivist and a transitional society (Ralston et al. 1993). The study employed eight behavioural measures four derived from Western theories (Machiavellianism, dogmatism, locus of control and intolerance of ambiguity) and four from Eastern theoretical bases (Confucian work dynamism, human-heartedness, integration and moral discipline). (Cray and Mallory, p. 126).

The study stressed on the importance of values imposed on organizations by leaders. Values play an important role in the leadership style of managers. Although in the different cultures values are imposed differently, leaders still need the values required as expected by the particular ethnic or group of people.


Leadership style is an important factor in the success of an organization. If such leadership fails or is imposed for the sake of the leader or person, it will not prosper. We have discussed transformational leadership as the way for an organization to succeed.


The leadership style that we have discussed and recommend is transformational leadership. This kind of leadership transcends boundaries, is practical for the present generation or digital age where every person or employee has to capacity to succeed or improve. Because of the present advancement in communication, computers and the internet, employees or so-called followers like to become independent and depart from organization if it is not properly managed. The only way to keep them in company is to inspire them to be part of the group or team.

Works Cited

  1. Bass, Bernard M. and Ronald E. Riggio. Transformational Leadership. 2nd ed. Routledge, 2006.
  2. Cray, D. and Mallory, G., 1998. Making Sense of Managing Culture. London: International Thomson Business Press
  3. Leibovich, Mark. The New Imperialists. United States of America: Prentice Hall Press, 2002.
  4. Templar, Richard. The Rules of Management. Great Britain: Pearson Education Limited, 2005.

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BusinessEssay. "Leadership Styles and Their Effects on Organizations." December 15, 2022. https://business-essay.com/leadership-styles-and-their-effects-on-organizations/.