Leadership
How Corporate Leadership Styles Affect Corporate Culture
With 60% of people feeling emotionally detached at work, it’s clear that something needs to change in corporate culture. One thing that can impact a business’s atmosphere positively or negatively is different leadership types.
Learning more about your leadership style and how it affects company culture can help you make the changes you need.
Understanding Corporate Leadership Styles
Before diving into the relationship between leadership styles and corporate culture, take a look at six of the most popular leadership types to help you determine which category you fall into.
1. Transformational Leadership
Transformational leadership involves encouraging positive change in employees. In this type of leadership, leaders are very encouraging, inspiring and supportive. Since 29% of employees wish the companies they worked for acted with more empathy, a transformational leadership style can be a good idea.
Employees with transformational leaders may feel higher levels of motivation due to the increased level of support they receive.
2. Servant Leadership
Servant leaders prioritize people over anything else. They believe the happier employees are in their personal and professional lives, the more productive and effective they will be at work.
Benefits of this leadership style often include:
- Increased worker engagement.
- Improved productivity.
- Better trust in managers.
- Positive impact on organizational behavior.
Because servant leaders have an employee-first mindset and workers feel valued, they are more likely to produce better work.
3. Transactional Leadership
Transactional leadership uses a reward and punishment system to motivate employees. This leadership style is based on a few fundamental beliefs:
- Rewards and punishments motivate workers.
- Employees require a clear chain of command.
- Leaders need to monitor workers.
This leadership style has pros and cons:
- Pros: This is an effective way of managing performance since employees are more likely to do their jobs correctly if they know they will receive a reward.
- Cons: Transactional leadership has a relatively rigid structure, which can limit people’s creativity.
4. Autocratic Leadership
Autocratic leaders — also called authoritarian leaders — are leaders who value results. They generally make decisions on their own. Some other prominent features of autocratic leaders are confidence, motivation and strong communication skills.
These leaders often make big decisions without consulting their employees, which can sometimes lead to tension within the team and harm company culture. It’s also important to note that 41% of senior leaders experience high stress levels, and being the sole decision-maker can increase pressures even more.
5. Democratic Leadership
Democratic leaders consider employees’ input and feedback in the decision-making process. Because they actively contribute to the company, workers are often much more engaged and satisfied in the workplace.
An essential component of democratic leadership is making team members feel empowered. Involving everyone means the whole team is on the same page, and leaders can combat miscommunication. However, the organization required to discuss decisions and get feedback can be time-consuming and inefficient, so this approach is best for leaders with excellent time management skills.
Leaders who adopt this style should also have strong communication aptitudes since they need to engage with their employees to ensure that everyone knows what is happening.
6. Laissez-Faire Leadership
This leadership style is the opposite of autocratic leadership. Leaders who integrate this style delegate many tasks to their employees and have a largely laid-back attitude. They often provide minimal supervision.
While this may sound counterintuitive, it can work well when team members are experienced and ready to take on more responsibility. It also encourages accountability and autonomy among workers. Employees with laissez-faire style managers often feel more at ease during work, increasing employee retention rates. It’s not just the employees that reap the benefits, though — employers get more time to focus on other projects once they have delegated tasks.
How Leadership Styles Influence a Corporate Culture
Now that you have a better idea of different leadership types, it’s time to dive into how these leadership styles influence company culture — this can assist you when determining which approach is best for you, your team and your company values. For example, a value-based company culture may benefit from a leadership style different from that of an innovative one.
How Do Leaders Influence Corporate Culture?
Employees look to managers and seniors to see how they should act, so leaders must embody the company culture and lead by example.
Here are a few things leaders can do to positively influence their work atmosphere:
- Purpose: Every company has a purpose, often directly connected to the company culture. Leaders need to help employees understand their role in the bigger picture.
- Appreciation: Appreciation often starts at the top, so seniors should enforce this company culture by showing a habit of extending gratitude and recognition.
- Wellbeing: Another critical element of many company cultures is employee wellbeing. Happy employees with a good work-life balance can contribute to a beneficial organizational climate, and leaders can help achieve this by fostering an environment that promotes their mental, physical and emotional health.
How Might the Corporate Culture Be Linked to Leadership Style?
Company culture and leadership styles affect each other. Consider the following examples:
- Laissez-faire: A laissez-faire management style can lead to a relaxed atmosphere within an organization because of low supervision.
- Autocratic: Autocratic leadership styles can lead to a disconnected work culture due to the lack of communication.
- Democratic: Democratic leadership styles are well-suited to work environments that emphasize communication.
- Transformational: Transformational leadership styles can foster a company culture that promotes growth because these leaders value their employees’ progress and improvement.
The Role of Employee Engagement and Organizational Behavior
Employee engagement is essential to positive company cultures and organizational behavior. Worker engagement is often linked to their employers’ leadership approach, so it’s important to think of how all these factors work together.
Employee Engagement
Companies’ cultural differences in leadership styles can affect employee engagement in various ways. In leadership styles that prioritize people over results — such as transformational, servant and democratic leadership approaches — employees often have better engagement because they feel valued.
Here are three strategies to improve employee engagement through leadership:
- Improved communication: Better communication can help boost employee engagement. Adopting a democratic method and including team members in decision-making can help improve collaboration between leaders and their employees.
- Empowerment: A transformational leader is focused on helping their employees transform, which motivates and empowers them to do better.
- Better trust: Giving employees increased responsibility by adopting a laid-back approach, such as the laissez-faire leadership style, helps them feel their bosses trust them. In return, they will be more productive to show they are worthy of this trust.
Organizational Behavior
Leadership style and organizational culture are closely related. A company’s culture often defines its values. Organizational behavior is how workers implement these goals. Leaders should be prime examples of company values by exhibiting good organizational behavior and helping their employees do the same.
Leadership approaches should align with company goals. For example, if a company aims to decrease mistakes, a transactional leadership style might be best.
The Interplay Between Leadership Style and Corporate Culture
Fostering a good company culture is key to helping businesses reach their goals — and a big part of that starts with leaders. Different leadership styles have benefits and downsides and should align with the organization’s unique structure and objectives.
A manager’s leadership approach also directly impacts employee engagement, so leaders can adapt their techniques to improve the results they’re getting from their teams.
Improve Your Leadership With Exude Human Capital
If you feel your company needs leadership guidance, consider leadership coaching services. At Exude Human Capital, we want to help you transform your organization, and we believe that starts with people.
Our extensive training programs can help leaders and HR professionals improve company culture, so get in touch to see how we can help you elevate your operations!
