Picking The Best of 5 Small Business Leadership Styles

Leadership Styles

Small business leadership styles vary from company to company and culture to culture. There’s no best way to lead a group of people, and in all practical reality the ideal way is to combine all styles as situations morph and present themselves to leaders.

Taking advantage of the leadership styles in a well-stocked leadership tool belt is the best-case scenario.

5 Small Business Leadership Styles

Here’s a look at the five main small business leadership styles. Identify your weaknesses and start working on ways you can improve in each area.

1) Democratic

A Democratic leadership style is basically allowing the decision-making process to be shared among teammates.

It relies heavily on group participation. Unless debates, discussion, and open sharing forums are used this style of leadership can fail. In order for business leaders to master the Democratic leadership style hear some ideas.

As the leader you always have the final say, but all the group is highly encouraged to share ideas and opinions before decisions are made.

Make sure your employees have an open forum to express highly creative ideas, and when those creative ideas are acted upon those employees should be rewarded for their efforts. Creativity is s small business’s golden egg.

2) Paternalistic

Paternalistic leadership is a style where the employees are seen as loyal and obedient children.

There is a highly hierarchical system in place in these types of businesses. Thinking outside the box and creativity is not at the forefront of this model and a weakness. The reasons behind this type of small business leadership style is that the workers potentially become 100% committed to that leader.

This is because the leader will sacrifice basically anything to protect his employees.

This type of leadership style is very evident in Japan. Employees there join a company the same way Westerners join the military. They’re 100% committed to the company and know that their job is safe and secure, and even though job security has changed over the recent decades with Japan’s sluggish economy and unstable job situations, but employee loyalty to the company is off the charts in Japan to this day.

3) Authoritarian

Authoritarian leadership is where the person in charge exercises full control over the group.

Input, creativity, and group decision-making is not taken into consideration when decisions are being made. Trust is not cultivated in these types of leadership situations because employees are never given responsibility to make important decisions.

They simply care about managing and finishing their tasks.

When decisions need to be made quickly and efficiently this type of leadership is very beneficial. Leaders who take this approach will dictate deadlines to their group and harsh punishments will be dealt when deadlines are missed. This leadership style should be used sparingly because the group will view leadership as more of a dictatorship, and those don’t last very long or end well.

4) Laissez-faire

Laissez-faire leadership is a style which delegates most of the tasks to group members, and with this type of leadership it’s more than just delegation.

This type of leadership delegates without guidance. Those delegated to have absolute freedom to make whatever decisions they deem necessary to accomplish the task.

The role of leaders in these cases are simply to allocate the resources necessary to get the job done.

Highly educated and highly skilled employees will benefit greatly from the style of leadership, but be careful, if employees are lazy or hard to motivate productivity will suffer greatly.

5) Transactional

This type of leadership style is based heavily on rewarding good behavior and punishing bad behavior.

Transactional leadership is also a style where the hierarchy and chain of command is clearly defined. Think about military leadership to get an idea of how this works. Rewards and punishments are dealt swiftly and fairly from those in charge, and the goal of the group is to follow instructions.

This is a give-and-take type of relationship between employee and manager.

They give effort and when they succeed they take rewards, but it is a double-sided coin and punishments are dealt just as efficiently as the rewards. This style can be very problematic at times because employees who are focused solely on thinking within the box to get basic tasks accomplished loose creativity.

So what type of leader are you? Have you ever thought of which leadership style comes most naturally to you? Are you in a position right now where you might be using the wrong style for your audience or circumstances? How might you adapt to better lead your people? I would love to hear your thoughts!


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Learn, Grow & Develop Other Leaders

Robert Cordray

Robert Cordray is a freelance writer with over 20 years of business experience
He does the occasional business consult to help increase employee morale
Email | LinkedIn | Twitter | Web

Image Sources: 33-ec.buzzfed.com


3 responses to “Picking The Best of 5 Small Business Leadership Styles

  1. I would not do any of these leadership styles. I love the style that I used as adapted from John Maxwell’s The 17 Indisputable Laws of Teamwork.

    He says,

    “Myth of the Head Table

    It’s a notion that on a particular team, one person is always in charge in every situation. It’s the idea that this particular individual permanently occupies the “head table” in the organization and that everyone else always takes a subordinate role.

    The idea that one person is always doing all the leading is false. The same person should not always lead the team in every situation. The challenge of the moment often determines the leader for that challenge, because every person on the team has strengths that come into play. The greater the challenge, the greater the need for the many advantages that leadership provides. And the more leaders a team develops, the greater the edge that leadership provides.

    Myth of the Round Table

    It’s the belief that everyone on the team is equal, all opinions count the same, and a team can function without leadership. This isn’t true either. A team that tries to function like a democracy never gets anything done.

    Everyone is important, but everyone isn’t equal. The person with greater experience, skill, and productivity in a given area is more important to the team in that area. In the eyes of God, everyone is loved equally. But when it comes to leading the team, somebody needs to step forward.”

    This is the style that I have adapted and it has been working so far.


  2. Paternalistic rhymes with mine…


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