Every business has its own leadership style that is determined by the organization, industry, and ultimately the leader of the company. Most companies operate on multiple levels of leadership, finding what works best for them and their workers. Here are five of the most common types of leadership styles.

Laissez Faire

Laissez faire is derived from French meaning “let (people) do (as they choose).” With this leadership style, employees are given freedom to perform how they wish with little to no interference. Leaders who choose to lead in this style promote trust in their workers and instill a higher sense of responsibility. While this seems like a great way to empower your employees, this leadership style also has its disadvantages. Without direct leadership, productivity tends to decrease along with the quality of work. If a worker doesn’t possess the right set of skills, the lack of leadership can hinder their work.


The Authoritarian leadership style has one leader who has complete control over everyone underneath them. This is often the type leadership style implemented in a small business environment. With this type of leadership, there is a more streamlined work process and the decisions of the business are made more quickly due to the lack of layers in management. However, this leadership style often leads to low morale because of less contribution from everyone in the company about the decisions made that impact everyday work.


This leadership style is quite the opposite of Authoritarian. The democratic style gives everyone in the organization a voice, leaving the ultimate decision up to the leader. Employees have higher morale due to feeling like they are included in the decision making process. Allowing everyone an opinion in the decision requires time, making time the only enemy of this leadership style. This type of leadership does not work well when a decision needs to be made quickly.


The transactional style of leadership requires an exchange. As the leader, you let your workers know exactly what you expect from them. Should they meet this criterion and exceed your expectations, they will be given something in return, such as a bonus. However, if this expectation is not met, employees can be punished or will require additional training. This is a popular tactic in the world of business but should not be the only way to lead.


This is one of the most empowering forms of leadership. Leaders who follow a transformational type of leadership expect the most from their workers. Expectations are set high enough that workers are constantly striving to achieve more, but not set too high where they feel like failures for falling short. These leaders focus on the big picture, which allows for the workers underneath them to take ownership of the smaller tasks required to achieve this goal.

Do you recognize some of these styles of leadership? What combination of styles has worked best for you?