5 Leadership Theories to Staying Relevant in Current Business Environment
In the current business environment filled with uncertainties and complexities, leadership is more important than ever. Many institutes include core fundamentals of leadership in their curriculum – to increase inquisitively about the subject and lay a strong foundation for future leaders. However, the business milieu’s unpredictability has emphasized the importance of adopting a leadership theory that can stand the test of time. Therefore, newcomers and experienced leaders must be akin to different leadership theories and choose one that matches their leadership style.
We will explore different leadership theories that will help managers stay relevant in the current business environment. These theories are versatile and can be adapted by leaders of any leadership style.
Leadership Theories to Stay Relevant
Post-pandemic, managers have changed their leadership style. These changes have helped them keep their business afloat in these challenging times. Here we will discuss leadership theories that have reaped benefits for managers in the current business environment. But, before that, let’s understand the meaning of leadership theories.
What Is the Meaning of Leadership Theories?
Leadership theories are well-researched assumptions about the psyche of a particular type of leader. Theorists have formulated a plethora of leadership theories to define different leadership styles. In addition, they have conducted behavior analysis and referred to different literature to develop the pre-existing leadership theories that stand in alignment with leadership definition. Below are the five leadership theories that every manager must excel in 2022.
Five Leadership Theories for Managers
1. Contingency theory of leadership
Often called the situational leadership theory, it is one of the versatile leadership theories that suggests that different leadership styles suit different situations. In these types of leadership theory, leaders must adapt their leadership style depending on their situation, which increases innovation and effectiveness.
The leadership theory helps leaders become versatile and adapt to different situations easily. It makes their transition from one phase to another easy and also gives them the skills and knowledge required to tackle difficult situations.
2. Transformational theory of leadership
The transformational theory emphasizes leaders that share a good relationship with their team members. Transformational leaders greatly influence their teams and focus on achieving business goals through influence and inspiration. They also ensure that the team’s goals are aligned with the business’s objective to avoid issues.
In the current business environment, transactional leadership theory can be used to pursue a positive change in the organization. It can also help develop a strong bond between the leaders and their team.
3. Transactional leadership theory
This type of leadership theory has a basic framework that revolves around reward and punishment. So, whenever a team member achieves the target set out by the leader, they are rewarded, and vice-versa. Generally, transactional leadership theory focuses on achieving the business goal. In this theory, the manager and employee do not share a bond or connection.
4. Great man leadership theory
There are some traits that all great leaders have, and this type of leadership theory asserts that great leaders are born with these traits. It is one of the first leadership theories that has stood the test of time and is gaining momentum in the recent business environment, especially because it believes that great leaders are born, not made.
Some of the personality traits of great leaders are charm, confidence, intellect, communication skills, and social aptitude. This theory empathizes with the leader and concentrates on leaders that can bring a positive change to the organization.
5. Behavioral leadership theory
This type of leadership theory focuses on a leader’s actions and behavior, with very little emphasis on their qualities and traits. According to behavioral leadership theory, an effective leader has many acquired skills. In addition to it, the theory also considers that an individual can learn skills to become a good leader.
Importance Of Leadership in The Current Milieu
The complexity and uncertainty existing in the current business milieu have forced companies to shift their focus to employing effective leaders. Here’s why leadership is important in the current business milieu:
- Change facilitators: Leaders use their skills and knowledge to accommodate the change in the organization. Since change doesn’t happen naturally, leaders facilitate change in a business enterprise.
- Resolves conflicts: Effective leaders are known for their problem-solving skills. They are equipped with skills that help them settle issues and create a positive working environment.
- Guidance providers: Great leaders are not people with authority. They are individuals with deep knowledge about human behavior and cognition, making them excellent guidance providers to people in need.
- Creates a positive work environment: Great leaders propel a positive work environment in the business enterprise through their skills and knowledge. It also increases job satisfaction and propagates growth.
- Increases job satisfaction: Effective leadership establishes a personal connection between leaders and their team members, which instigates career growth for the workers. In addition, it also increases job satisfaction.
Essential Leadership Skills
Here are some of the essential skills that leaders use in their daily lives:
Starting A Career in Leadership
Most employers look for candidates with bachelor’s or master’s degrees in leadership, business management, project management, or similar field. Many aspiring leaders also undertake a short term leadership programmes to advance their career, earn a competitive pay package and become a successful and impactful leader. If you also want to become such a leader, enrol in Emeritus India’s top-of-the-range online leadership programme offered in collaboration with institutes like IIM, IIT, ISB Executive Education and more.