Importance of Leadership on Business

Running head: LEADERSHIP
LEADERSHIP
Name of the Student
Name of the University
Author note

LEADERSHIP1
Introduction
Leadership plays a very crucial role in the success of any organization. Leadership
helps in transforming the potential into reality for any organization. Leadership is also
responsible for providing a working climate that is pleasant to the work and is also
responsible for boosting the confidence of the employees by sharpening and developing their
skills (Northouse, 2018).
Leadership helps in encouraging and stimulating the actions that are required to
perform, which will enable an enhanced result for the organization; this includes making
innovations in the style of planning and making decisions. Leadership helps in motivating the
employees of the organization and encourage them to perform better (Ward, 2016).
The organization must understand the importance of leadership as it will help in
taking faster and decisive action when required for the organization (Dunne et al.2016).
Leadership in an organization also helps in performing better and accomplishments of the
objectives and goals set by the organization. This report will discuss the importance of
leadership in business, several theories and models of leadership and the application of these
theories and models in the business.
Discussion
Importance of leadership on business
Leadership is considered as one of the primary function of management as it helps in
maximizing the efficiency and leads towards the achievement of the organizational goals.
Leaders play a very crucial role in initiating a work by making proper communication with
the employee using the proper medium for transferring the message to be delivered (Sfantou,
et al. 2017).

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A leader plays a very important role in guiding his subordinates to perform efficiently
and effectively. They also help in boosting the confidence of their subordinates by
continually motivating them and engaging them in various decision-making. Leaders are
responsible for building the morale of the employees they have and this, in turn, helps in
cooperating towards the work and provide guidelines to them (Turner, 2019).
Leadership in business is important as t involves the ability of the organization’s
management to achieve the aims tactfully and act in a decisive way (Ndalamba, Caldwell &
Anderson, 2018). It also helps in staying ahead of the competitors by increasing the
efficiency in performance (Lee, Alpeissova & Akisheva, 2019). Some of the reasons include:
Maintaining the vision of the organization: ensuring the organizational vision and
acting towards the accomplishment of it is essential, and this is directed by the leaders of the
organization. They form a guideline for the sub-ordinates to walk upon and accomplish them.
Inspiration: a leader is responsible for enhancing the morale of his subordinates and make
them work harder, which will help them to develop their skills and the organization to induce
profits (Liao & Huang, 2016).
Embracing diversity: working in a diversified organization helps to develop many
personal and professional skills at the same time. Hence, leadership helps in offering this kind
of environment on behalf of the organization. Leaders always ensure that the people working
under him are working in a diversified working environment (Harris, 2017).
Communicating new strategic decisions: making decisions in an organization is very
common, and it occurs very frequently. Therefore, a leader plays a very important role in
communicating the necessary information to the subordinates and adapt these strategic
decisions taking place in the organization (Köhler & Zerfass, 2019).

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Encouragement for continuously learning: a business leader is responsible for
encouraging the employees in learning and developing themselves continuously. This
improves not the productivity and delivery of the employees, but it helps in improving the
overall learning opportunities for other employees.
Leadership theories
Many theories were proposed or leadership in an organization or business (Nawaz &
Khan_ PhD, 2016). Some of the theories of leadership include:
a) Trait theory (1930s)
b) Behavioural theory (1940s and 1950s)
c) Contingency theory (1960s and 1970s)
d) Transactional theory (1980s and above)
Trait theory: this theory was based on the indication that whatever the situation may be, the
traits or the characteristics that an individual has remains constant and throughout. This
theory mainly focuses on the differences between the personalities of several individuals
(Scheffer & Heckhausen, 2018). The main concentration of this theory was on the motives,
values and skills of the individuals. Application of trait theory can help managers in
understanding and identifying the strengths and weaknesses of themselves and can
accordingly develop the required qualities for leadership.
Behavioural theory: this theory stated that behaviours are gained through conditioning
which occurs due to the interaction with the environment. It was believed by the
behaviourists that the way we respond to a situation is based on the environmental stimuli
that help in shaping the actions we as individuals take. This theory offered a new perspective
which was concentrated towards the behaviours of the leaders. The theory said that leaders