Top Leadership Theories Every Manager Should Know – Expert’s Top Picks

Last updated on 15th Jul 2020, Blog, General

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Here are some leadership theories that you must master to become a great leader.

1. Management Theories

Popularly known as transactional theories, management theory lays a lot of emphasis on supervision, organization and teamwork. The management theory establishes a system of reward and punishment, which means if you do well, you will be rewarded and if you don’t, you will be penalized.

A task management software like TaskQue can help you in implementing this system by letting you track task progress and hold your employees accountable for their action.

2. Relationship Theories

Relationship theory is also known as transformational leadership theories. It revolves around the bond between leader and follower. The stronger the bond the better will be the results. Transformational leaders inspire and motivate their followers and keep them on the same page.

Such leaders usually have high ethical and moral values and would never compromise on these values irrespective of what the situation might be. They want to achieve their goal but also want each member of their team to contribute and perform at the potential.

3. Behavioral Theories

When it comes to leadership, the world is divided into two different camps. One thinks that leaders are made, while other camp believes that leaders are born. Behavioral theory sides with the people in the former camp and challenges the notion that leaders are born. As a result, it completely ignores all the qualities that set natural leaders apart from their trained counterparts. This theory puts its weight behind actions of leaders and advocates the fact that people can learn from their experience, observation and teachings to transform into a good leader.

4. Participative Theories

Leaders can be divided into two broad categories. One that follows the autocratic leadership style and makes decisions on their own. On the other end of the spectrum are those leaders who take input from others.  Participatory theory backs the approach of the latter.

Leaders who follow participative theory welcome suggestions from team members and encourages them to speak up. As a result, the team members think that they have their say in the decision-making process. Although, the leader reserve the right to stop taking input but in most cases, they don’t exercise that right.

1. Great Man Theory

According to the Great Man Theory (which should perhaps be called the Great Person Theory), leaders are born with just the right traits and abilities for leading – charisma, intellect, confidence, communication skills, and social skills.

The theory suggests that the ability to lead is inherent – that the best leaders are born, not made. It defines leaders as valiant, mythic, and ordained to rise to leadership when the situation arises. The term “Great Man” was adopted at the time because leadership was reserved for males, particularly in military leadership.

2. Trait Theory

The Trait Theory is very similar to the Great Man Theory. It is founded on the characteristics of different leaders – both the successful and unsuccessful ones. The theory is used to predict effective leadership. Usually, the identified characteristics are compared to those of potential leaders to determine their likelihood of leading effectively.

Scholars researching the trait theory try to identify leadership characteristics from different perspectives. They focus on the physiological attributes such as appearance, weight, and height; demographics such as age, education, and familial background; and intelligence, which encompasses decisiveness, judgment, and knowledge.

3. Contingency Theory

The Contingency Theory emphasizes different variables in a specific setting that determine the style of leadership best suited for the said situation. It is founded on the principle that no one leadership style is applicable to all situations.

Renowned leadership researchers Hodgson and White believe that the best form of leadership is one that finds the perfect balance between behaviors, needs, and context. Good leaders not only possess the right qualities but they’re also able to evaluate the needs of their followers and the situation at hand. In summary, the contingency theory suggests that great leadership is a combination of many key variables.

4. Situational Theory

The Situational Theory is similar to the Contingency Theory as it also proposes that no one leadership style supersedes others. As its name suggests, the theory implies that leadership depends on the situation at hand. Put simply, leaders should always correspond their leadership to the respective situation by assessing certain variables such as the type of task, nature of followers, and more.

As proposed by US professor Paul Hersey and leadership guru Ken Blanchard, the situational theory blends two key elements: the leadership style and the followers’ maturity levels. Hersey and Blanchard classified maturity into four different degrees:

• M1 – Team members do not possess the motivation or tactical skills to complete necessary jobs.
• M2 – Team members are willing and ambitious to achieve something, but they lack the necessary ability.
• M3 – Team members possess the skills and capacity to accomplish tasks, but they’re not willing to take accountability.
• M4 – Team members possess all the right talents and are motivated to complete projects.

According to situational theory, a leader exercises a particular form of leadership based on the maturity level of his or her team.

5. Behavioral Theory

In Behavioral Theory, the focus is on the specific behaviors and actions of leaders rather than their traits or characteristics. The theory suggests that effective leadership is the result of many learned skills.

Individuals need three primary skills to lead their followers – technical, human, and conceptual skills. Technical skills refer to a leader’s knowledge of the process or technique; human skills means that one is able to interact with other individuals; while conceptual skills enable the leader to come up with ideas for running the organization or society smoothly.

Leader-Member Exchange Theory

The concept of individualized concern has some carry-over to our second theory, Leader-Member Exchange Theory (LMX). To understand this theory, you only need to think back to junior high: almost every student could be divided into two categories, popular or unpopular.

LMX theory explains that in any group or organization, there are in-group members and out-group members. In-group members work well with the leader, have a personality that fits with the leader’s, and are often willing to take on extra tasks or responsibilities. Out-group members are less compatible with the leader; they may hold dissenting opinions, have clashing personalities, or be less willing to take on extra assignments. Not surprisingly, in-group members are more likely to earn promotions; out-group members are more likely to leave.

Activating LMX theory:

Additionally, LMX theory has important implications for improving diversity and inclusion. If minorities, women, or people with disabilities routinely identify as out-group members, the leader should ask the question, “What is required to be an in-group member here, and are we creating unintentional barriers for others?”

More on Leadership Theory

Continue learning about leadership theory in the next article in this series, where we’ll discuss Adaptive Leadership, Strengths Based Leadership, and Servant Leadership, along with the usefulness of leadership theories. >>Read more in part 2 of this series.

 Classical Management

Classical Management Theory is predicated on the idea that employees only have physical needs. Because employees can satisfy these physical needs with money, Classical Management Theory focuses solely on the economics of organizing workers.

Due to this narrow view of the workforce, Classical Management Theory ignores the personal and social needs that influence employees’ job satisfaction. As a result, Classical Management Theory advocates seven key principles:

• Profit maximization
• Labor specialization
• Centralized leadership
• Streamlined operations
• Emphasis on productivity
• Single-person or select-few decision making
• Priority to the bottom line

• When these seven principles are put into practice, they create an “ideal” workplace based on a hierarchical structure, employee specialization, and financial rewards.
• Control of the business is held by a select few who exercise exclusive control over the decisions and direction the company takes. Underneath those select few, middle managers govern the day-to-day activities of the employees who are at the bottom of the pecking order.
• And all of this revolves around the idea that employees will work harder and be more productive if they are rewarded in larger and larger increments (via wages or benefits).

While this may not sound like an “ideal” management theory by today’s standards, it worked well for many years prior to the early 20th century. And even though the system isn’t applied lock-stock-and-barrel as it once was, there are several strong points that managers can use in the 21st century. They include:

• Clear managerial structure
• Division of labor
• Clear definition of employee roles

These three principles, combined with other management theories on this list, can improve the way your employees — and your business — works in this modern age.