The Impact of Leadership Style in Business: A Literature Review

This literature review explores the impact of leadership style on business productivity, employee morale, decision-making, and success. It covers key themes, potential gaps, and a conceptual framework.

Literature Review
(Topic: The impact of leadership style in business)

Table of Contents
INTRODUCTION...........................................................................................................................3
KEY ISSUES...................................................................................................................................3
MAIN BODY...................................................................................................................................3
Theme A: How businesses adapt leadership style..................................................................3
Gap.........................................................................................................................................4
Theme B: Impact of leadership style on productivity and employee morale.........................4
Gap.........................................................................................................................................5
Theme C: How the selection of improper leadership style affects business decision-making5
Gap.........................................................................................................................................6
Theme D: Role of a leader in the success of a business.........................................................6
Gap.........................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Leadership is one of the essential aspects of the business which helps the business to
manage its functions. There are leadership styles such as autocratic, democratic, affiliative, and
authoritative and laissez faire. For the organisation selection of appropriate leadership style is of
the major decisions. Leadership plays vital role within business succession and this could also
increase overall productivity of the organisation. When leadership style is not appropriate then
this will lead into ineffective decision making within the organisation and decreased employee
morale.
This can be analysed that businesses are required to take decision for selection of
leadership so that negative impacts over the organisation can be minimised. The scope of
literature review is in terms of role of leader within leadership style so that succession
opportunities to the business can be rendered. The current literature review covers deep
discussion on the key themes in terms of potential gaps and identification of conceptual
framework. The literature review is prepared by critically analysing existing sources so that in-
depth information can be gathered.
KEY ISSUES
The potential themes of the research project are as under:
a) What are the manners in which leadership style can be adopted by the organisation?
b) What is the impact of leadership style on organisational productivity and employee
morale?
c) What are the consequences that can be faced by the organisation by adopting inefficient
leadership?
d) What is the role of leaders within managing business functions in succession manner?

MAIN BODY
Theme A: How businesses adapt leadership style
Leadership style is related with examining behaviour of individuals so that their skills can be
used within the organisation in terms of attaining business objectives (Khan and et. al., 2020).
This can be said that individual behaviour is related with providing direction and guidance in
terms of managing the people in desired manner. At the time of developing the business apt
leadership style is required to be developed and this way business objective can be attained
(Van der Voet, 2016). There are various leadership styles such as autocratic, democratic, laissez
faire and many others. Using these leadership styles within business areas best possible
requirements of the organisation can be met. There are various dimensions which are
considered while selecting leadership style such as maturity within team, nature of
relationships, nature of tasks, personality of the leader and many more. When an organisation is
willing to increase their sales in near future then coaching leadership style will be adopted as
this helps the sub-ordinates to increase their productivity in such manner strategic goals of the
organisation can be attained (Shao, Feng and Hu, 2016). On the other hand, in terms of
manufacturing organisation democratic leadership style can be adopted so that apt decision can
be made.
Gap
The existing studies have said that there are various situations and factors for which
appropriate leadership style is selected within the organisation. The studies have also
demonstrated regarding the entire leadership styles that can be adopted by the organisation in
order to meet their objectives. The current research is significant as this will suggest that how a
business may adopt leadership style to manage their business objectives and rivalries in the
industry.
Theme B: Impact of leadership style on productivity and employee morale
With the help of appropriate leadership in the organisation productivity of the employees can be
increased and at the same time employee morale can also be boosted. So that with the help of
leadership style organisational culture can be improved so that by having positive culture in the
organisation willingness to work within employees can be increased (Babalola, 2016). As this is
stated that retail business may adopt autocratic leadership style in which leaders will decide all

the business goals without undertaking input of their employees. As a result different
productivity issues can be seen in the business and high errors within the organisation can be
seen and this can result into customer dissatisfaction. Within an organisation this is required to
be insured that employee morale is not decreased and for this the organisation is required to use
differentiated practices (Orabi, 2016). The organisation is required to examine all the situations
which are directly related with productivity and employee morale within the organisation.
However this has been observed that action of leadership style is dependent on various factors.
Context of autocratic leadership style it may result into employee absenteeism and decrease
productivity as employee feel pressure due to rigidness of working culture (Alkahtani, 2016).
With the help of democratic leadership style employees can be taken within the business so that
business and employees can be in the same favour.
Gap
Studies have showed that the impact of leadership on the context of productivity and
employee morale. This is observed that organisational culture and employee morale are two
contradictory points but these are related with organisational leadership. Other hand the studies
have shown that leadership is the factor which may impact employee morale in positive or
negative manner so that employees can work with their efficiency to the optimal manner.
Theme C: How the selection of improper leadership style affects business decision-making
Within an organisation selecting the right leadership style is one of the major roles which are
played by the leaders and higher level management staffs. Due to inappropriate leadership
styles business failures can be seen within business strategies (Bernarto and et. al., 2020). There
is sometimes in which election of wrong leadership style can affect the whole decision making
process of the organisation through which dis-satisfied employees can be seen and business
objectives can be delayed. For example in the context of fast fashion retailer the mission of the
organisation is to expand their business into various global (Al Khajeh, 2018). Definition the
company needs to have licence style in their organisation so that all the employees are held
accountable for their own work. This leadership gives power to the employee by which they can
take decision spontaneously without taking any permission from their higher authorities.
Overall performance and productivity of employees and the organisation can be increased and
employees can follow the path of succession (Fallatah, Laschinger and Read, 2017). The

contrary if leadership style is not implemented in appropriate manner than wrong decision can
be taken within the organisation which can lead to some drastic results.
Another example is that if a fast special retailer use authoritative leadership style than
employees and business owner can be separated by their objectives. This will result into taking
straight conclusions reasons which are in the favour of the organisation. Similarly this
leadership style helps in increasing efficiency and productivity of employees so that proper
implementation of leadership style can be seen in the organisation.
Gap
The existing literature has shown regarding comparing and contrasting on the selection
of different leadership styles and their impact on decision making of the organisation. However
the studies were not able to discuss regarding the role of management in choosing leadership
style as the organisational management is responsible for whole the decision making process.
Theme D: Role of a leader in the success of a business
Within an organisation, choosing and implementing leadership style leader is having
major role as he or she is responsible for succession on failure of the organisation in direct and
indirect manner (Azad and et. al., 2017). Leader is responsible for motivating employee is in
such a way that business object is can be made an overall productivity and efficiency of the
employees can also be increased. Leader is having rule to make sure that all the employees are
engaged in their own jobs in responsibilities which helps in increasing employee’s engagement
and their commitment towards business success. In order to manage employee motivation
leaders are required to examine such factors related to intrinsic and extrinsic motivation so that
by using the same the leader may motivate their subordinates (LeCouvie and Pendergast, 2017).
Employee is motivated than quality efforts can be given by them to the organisation which
would help the organisation to meet there overall objectives. In terms of extrinsic motivation
the leader is required to emphasize on giving incentive to their employees so that level of
satisfaction within employees can be increased. In terms of interesting motivation the leader is
required to organise various training sessions within the organisation so that skills of employees
can be sharpened in time to time manner. The leader is associated with full filling employees
expectations this leader uses behaviour approach (Meier and Schier, 2016). By meeting

employees expectation this will increase employee absent is them and employee morale in
performing their obligations.
Gap
The studies have focused regarding the role of leader in motivating their team and to
create committed staff. The studies have also demonstrator regarding the role of leader in
providing direction to the organisation so that business success can be attained. However the
study has a very limited depth in understanding responsibility of leader invalowing their team
members. The studies also suggesting the ways in which leaders can motivate their employees
and take out their contribution in developing business objectives.
CONCLUSION
From the above findings this can be concluded that leadership style is having direct
relationship with the organisational performance. This is a dependable factor so that an
organisation is required to adopt apt leadership style so that all the situational factors can be
added within business efforts. Leader is having rule to encourage their employees so that they
can perform out of their comfort zone and develop prominence in their rules so that business
objectives can be acquired in easy manner

REFERENCES
Books and journals
Al Khajeh, E.H., 2018. Impact of leadership styles on organizational performance. Journal of
Human Resources Management Research, 2018, pp.1-10.
Alkahtani, A.H., 2016. The influence of leadership styles on organizational commitment: The
moderating effect of emotional intelligence. Business and Management Studies, 2(1),
pp.23-34.
Azad and et. al., 2017. Leadership and manage
Babalola, S.S., 2016. The effect of leadership style, job satisfaction and employee-supervisor
relationship on job performance and organizational commitment. Journal of Applied
Business Research (JABR), 32(3), pp.935-946.
Bernarto and et. al., 2020. Effect of transformational leadership, perceived organizational
support, job satisfaction toward life satisfaction: Evidences from indonesian teachers.
Fallatah, F., Laschinger, H.K. and Read, E.A., 2017. The effects of authentic leadership,
organizational identification, and occupational coping self-efficacy on new graduate
nurses' job turnover intentions in Canada. Nursing outlook, 65(2), pp.172-183.
Khan and et. al., 2020. The interplay of leadership styles, innovative work behavior,
organizational culture, and organizational citizenship behavior. Sage Open, 10(1),
p.2158244019898264.
LeCouvie, K. and Pendergast, J., 2017. Family business succession: Your roadmap to
continuity. Springer.
Meier, O. and Schier, G., 2016. The early succession stage of a family firm: Exploring the role
of agency rationales and stewardship attitudes. Family Business Review, 29(3), pp.256-
277.
Orabi, T.G.A., 2016. The impact of transformational leadership style on organizational
performance: Evidence from Jordan. International Journal of Human Resource
Studies, 6(2), pp.89-102.
Shao, Z., Feng, Y. and Hu, Q., 2016. Effectiveness of top management support in enterprise
systems success: a contingency perspective of fit between leadership style and system
life-cycle. European Journal of Information Systems, 25(2), pp.131-153.
Van der Voet, J., 2016. Change leadership and public sector organizational change: Examining
the interactions of transformational leadership style and red tape. The American
Review of Public Administration, 46(6), pp.660-682.