Impact of Leadership Styles in Businesses: A Literature Review

This literature review explores the impact of different leadership styles on business performance. The study evaluates the perspectives of various authors and books on the topic, including bureaucratic, authoritarian, democratic, transactional, and transformational leadership styles.

Literature Review

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LITERATURE REVIEW................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
In the literature review, the research topic will select as an impact of leadership styles in
businesses. Leadership is referred as the actions of directing a group of people or a business. It is
the ability of individual person to handle, influence and guide the group of members and
members of organization. Leadership styles is defined as the characteristics and behaviours of
leaders when they are motivating, directing, managing and guiding the group of peoples. There
are various types of leadership styles such as participative, delegative, authoritarian, transactional
and transformational leadership styles. In this section of this project will evaluate the books and
authors perspective on the topic impacts of leadership styles in business.
LITERATURE REVIEW
Impact of leadership style in businesses
Leadership style is viewed as combination of various traits, characteristics and
behaviours that are utilized by the business leader for interaction with the employees and
subordinates in organization. Fries, Kammerlander and Leitterstorf (2021) consider the
leadership styles as the managerial behaviours which are helps in integrate the business, effects
for achieve specific goals and personal interest. It is the process of social influencing in which
one person is able to support the another one to accomplish the common specific task.
Leadership helps in achieve the goals and objectives of business effectively. Its focus to achieve
the and obtain the members focus on the goals of organization.
According to the Alblooshi, Shamsuzzaman and Haridy (2020), it is defined as the kind
of relationship that is used by the leaders to make members of organization work together for a
particular objectives and goals. In the modern leadership styles , leadership is categorized in the
various forms such as transactional leadership styles, transformational leadership style,
participative leadership style, authoritarian leadership styles, delegative leadership style. It
induces the employees and subordinates of organization for a certain goals that leads in
motivation and values the wants and needs as well as expectation of both followers and leaders.
This considers the leadership impacts on the business and elaborate the relationship
between the leadership style and performance of business. The styles of leadership help in
influence the organizational culture which helps in influence the performance of business. The

performance of business and organizational culture are related to the various types of leadership
styles.
Akparep, Jengre and Mogre (2019) stated that transformational leadership is referred as
the management style that estate the close cooperation between the employees and leaders of
organization. This leadership styles required the to adopt a motivational management approach
which helps in motivation employees. This leadership style focus ion the day to day operations
of business. The impacts of the transformational leadership is helps in search for new
opportunities with encourage the responsibility in employees and helps in generate the shared
visions of business as well as helps in promotes the organizational learnings. Personalized
relationship of employees developed by the transformational leadership styles as well as develop
the environments where employees feel happy and improved their overall performance.
According to the research conducted by Purwanto, (2019), the transformational
leadership also positively associated with the innovation in business as well as create the
condition that helps in boost the practices and abilities to promote. It helps in keeps company
hones and ethical, it reduces the turnover costs as well as driver of employees retention and
motivational in workplace. It is the effective forms of leadership because it helps in inspire the
staff and build morale and promote creativity in business. The employees of organization in the
transformational leadership associate with the satisfying and self defining relationship with a
group and individual.
Rao, (2020) revealed that the transformational leadership style can be risky and
disruptive as well as utilize the energy of leader to determine that how to accomplish task and
achieve goals. The negative impact of transformational leadership increase pressures on the team
member's and employees of organization and for the successful leadership styles the
communication are also continual needed. This leadership styles can also lead to employees
burnout just because of long term personnel issues.
Kalsoom, Khan and Zubair (2018) indicated that transactional leadership helps in give in
something returns. This leadership styles include the various things such as performance review,
promotion, pay raise, new responsibilities, etc. it is defined as the exchange of rewards and
targets between the employees and management. These leaderships style build the short term
goals which can be achieved quickly as well as it is very productive leadership styles.

Feranita, Nugraha and Sukoco (2020) stated that transactional leadership styles has a
positive impact on the performance of business as well as leads in maximize the human
capabilities as the employees to achieve the intangible and tangible awards. But this leadership
styles not helps in encourage innovation and creativity among the employees because employees
are not performed as per the expectation of business as well as not able to found the direct impact
on the performance of business.
According to the Peker, Inandi and Gilic, (2018), In the democratic leadership, decision-
making process is decentralized which is shared by all the subordinates within business. It is also
knowns as the employee's motivation which helps in perform better and their opinions and views
are valued. This leadership styles ids the assumptions that every member's of the company
involves in decision-making and shared ideas and expertise. This leadership allows employees to
share the decision with the managers and groups of company as well as sense of responsibilities
of employees are also developed in organization. It helps in provide the opportunities to the
workforce to implement and express their creative ideas which are take part in the decision-
making process. His leadership style also focus on the group performance and group discussion
which result in positively influence the employee's performance.
Caillier (2020) indicated that, democratic leadership style is regretful and become the
biggest drawbacks for the company and leader apologized to those workforces whose creative
ideas were not considered in the business plan. It takes a long times and finds difficulties of
working. It is the processing decisions time-consuming in the time management.
Chukwusa (2018) found out that, autocratic leadership are bossy and classic in nature.
This types of leaders want that their employees to work according to them. It also retains the
decision-making rights with the employees and workforce of business. This leadership styles
force employees to execute strategies and services reported to the constrictive ways. The
autocratic leadership is also known as the authoritarian leadership styles. This is most effective
when the business project is completed in provided deadlines. The author stated that this
leadership styles is helps in determine the techniques, policies and activities to the employees
and expects from the workforce to go the same.
Ohemeng, Amoako-Asiedu and Darko (2018) revealed that, the autocratic leadership
styles only promote the one sided conversation and it is less creative as well as it affects the
satisfaction level and employees motivation. This organizational also leads conflicts in the

organization which negatively affects the business performance as well as this leadership styles
do not have belief on their followers.
Mansaray (2019) have defined that bureaucratic leaders helps in influence the employees
which are followed the procedures and policies formulate by business. This leadership styles are
committed with the procedures and processes of business. In this leadership styles, leaders focus
on the task which must be complete in appropriate and systematic ways. This leadership styles
focus on the separations of jobs and relationship, clearly dines roles to employees in specific
task, rigid process and regulations which are important for organization and it is very effective
leadership style because they are more focused on the punishment, repetitions and rewards of
business.
Grube (2019) proved this fact that the bureaucratic leadership style is not effective
leadership as well as it not lead in the motivation and developments of employees. The author
stated that the negative impact of bureaucratic leadership style on business performance because
they don not bring on employees of business to work in the expected way which leads in the
enhance the business performance. This does not impact the performance of organization and
employees effectively. In others words, this leadership style consist the low and limited
creativity, competitions are also discouraged as well as slow adaptation to change. This is
disqualify strategies for business because this leadership strategies consider the low level of
freedom and lower team morale as well as it results in the high workforce turnovers and teams
members spend the lots of times to meet the needs and requirements of business.
CONCLUSION
As the conclusion, the study has focused on the impact of leadership styles in business
with the different perspectives of author and books. The focus of projects was on the types of
leadership styles such as bureaucratic leadership styles, authoritarian leadership styles,
democratic leadership styles, transactional and transformational leadership styles were found to
have a negative and positive impacts on business performance. Leadership style is most
important to offering the opportunities to employees to participate in the decision-making
process of business. In the conclusion, the business needs to focus on the democratic and
transformational leadership styles in the business that helps in improved and enhance the

performance, productivity and profitability of organization. This study helps in provided deep
insights of the impacts of leadership styles.

REFERENCES
Books and journals
Akparep, J.Y., Jengre, E. and Mogre, A.A., 2019. The influence of leadership style on
organizational performance at TumaKavi Development Association, Tamale, Northern
Region of Ghana.
Alblooshi, M., Shamsuzzaman, M. and Haridy, S., 2020. The relationship between leadership
styles and organisational innovation: A systematic literature review and narrative
synthesis. European Journal of Innovation Management.
Caillier, J.G., 2020. Testing the influence of autocratic leadership, democratic leadership, and
public service motivation on citizen ratings of an agency head’s performance. Public
Performance & Management Review. 43(4). pp.918-941.
Chukwusa, J., 2018. Autocratic leadership style: Obstacle to success in academic
libraries. Library Philosophy and Practice, p.1.
Feranita, N.V., Nugraha, A. and Sukoco, S.A., 2020. Effect of transformational and transactional
leadership on SMEs in Indonesia. Problems and Perspectives in Management.18(3).
pp.415-425.
Fries, A., Kammerlander, N. and Leitterstorf, M., 2021. Leadership styles and leadership
behaviors in family firms: A systematic literature review. Journal of Family Business
Strategy. 12(1). p.100374.
Grube, D.C., 2019. Megaphone Bureaucracy: Speaking Truth to Power in the Age of the New
Normal. Princeton University Press.
Kalsoom, Z., Khan, M.A. and Zubair, D.S.S., 2018. Impact of transactional leadership and
transformational leadership on employee performance: A case of FMCG industry of
Pakistan. Industrial engineering letters. 8(3). pp.23-30.
Mansaray, H.E., 2019. The role of leadership style in organisational change management: a
literature review. Journal of Human Resource Management. 7(1). pp.18-31.
Ohemeng, F.L., Amoako-Asiedu, E. and Darko, T.O., 2018. The relationship between leadership
style and employee performance: An exploratory study of the Ghanaian public
service. International Journal of Public Leadership.14(4). pp.274-296.
Peker, S., Inandi, Y. and Gilic, F., 2018. The Relationship between Leadership Styles
(Autocratic and Democratic) of School Administrators and the Mobbing Teachers
Suffer. European Journal of Contemporary Education.7(1). pp.150-164.
Purwanto, A., and et.al., 2019. the Effect of Tansformational, Transactional, Authentic and
Authoritarian Leadership Style Toward Lecture Performance of Private University in
Tangerang. Dinasti International Journal of Digital Business Management.1(1). pp.29-
42.
Rao, P.S., 2020. Processes and outcomes in three-dimensional match and mismatch
circumstances in respect of leadership styles, followership styles and situational
demands in business organisations in papua new guinea. South Asian Journal of
Marketing & Management Research. 10(4). pp.6-27.
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