ENTREPRENEURSHIP DEVELOPMENT NOTES: Leadership Meaning | Leadership Styles | Traits and Qualities of Leaders

Leadership - Meaning, Styles and Traits & Qualities
Entrepreneurship Development Notes
For B.Com, BBA and MBA

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In the post I have given a brief introduction of Leadership Qualities and Styles. These notes are useful for the students of B.Com, BBA and MBA of various universities. For more notes visit our website regularly.

Table of Contents

1. Meaning of Leadership

2. Why Entrepreneurs need Leadership Qualities?

3. Leadership Styles and Types of Leaders

4. Traits and Qualities of a Good Leader

5. Theories of Leadership

a) The Trait theory

b) The Behavioural Theory

c) The Situational Theories

d) The Follower Theory

 Introduction: Leadership

Leadership is the ability to build up confidence and deal among people and to create an urge in them to be led. To be a successful leader, a manager must possess the qualities of foresight, drive, initiative, self-confidence and personal integrity. Different situations may demand different types of leadership.

Leadership means influencing the behaviour of the people at work towards realizing the specified goals. It is the ability to use non-coercive (no force) influence on the motivation, activities and goals (MAG) of others in order to achieve the objectives of the organisation.

Koontz and 0' Donnel “Leadership is the ability of a manager to induce subordinates to work with confidence and zeal”.

George R Terry “Leadership is the activity of influencing people to strive willingly for group objectives”.

Why Entrepreneurs need Leadership Qualities?

It seems that everyone has their own ideas about what makes a successful entrepreneur. For some, the most important qualities are persistence and a high degree of tolerance for risk. For others, entrepreneurs need to be good communicators above all else, or have excellent financial management skills. Some claim that a solid vision is the most important trait, but regardless of what they believe to be most important, nearly everyone agrees that leadership is a vital skill for all business owners.

In any business, whether a small startup or a thriving mid-size company well on its way to becoming a major enterprise, leaders are an integral part of formulating and articulating the company’s direction, setting goals, and motivating employees to work toward the same goals. In other words, a leader’s priorities are the same as any entrepreneur’s priorities.

However, just because being a good leader can help you be a more successful entrepreneur, doesn’t mean that all entrepreneurs are good leaders. In fact, research shows that the majority of entrepreneurs who were able to take their enterprises public actually failed as CEOs, indicating that the leadership skills that were are useful in getting a company off the ground are not always the same as those required to lead the company as it grows. That being said, entrepreneurial leadership is clearly important if a business owner wants to successfully grow and manage their company.

Often, developing entrepreneurial leadership skills first requires investing time in advanced education and additional training, especially formal leadership courses. But however you choose to grow your skills though, it’s important to focus on a few key areas.

Leadership Styles or Types of Leaders

1.       Autocratic or Authoritarian Style leader: An autocratic also known as authoritarian style of leadership implies wielding absolute power. Under this style, the leader expects complete obedience from his subordinates and all decision-making power is centralized in the leader. No suggestions or initiative from subordinates is entertained. The leader forces the subordinates to obey him without questioning. An autocratic leader is, in fact, no leader. He is merely the formal head of the organization and is generally disliked by the subordinates who feel comfortable to depend completely on the leader.

2.       Laissez-faire or Free-rein Style Leader: Under this type of leadership, maximum freedom is allowed to subordinates. They are given free hand in deciding their own policies and methods and to make independent decisions. The leader provides help only when required by his subordinates otherwise he does not interfere in their work. The style of leadership creates self-confidence in the workers and provides them an opportunity to develop their talents. But it may not work under all situations with all the workers, may bring problems of indiscipline. Such leadership can be employed with success where workers are competent, sincere and self-disciplined. Free-rein leadership style is appropriate when:

(1) The goals of an institution have been communicated well and are acceptable to the subordinates.

(2) Subordinates are highly knowledgeable, motivated, well-trained and psycho-socially mature. They are ready to assume responsibility. This style could lead to self-interest among subordinates, chaos and break-down of the system.

Problems with free-rein theory

1.       Not ideal in situations where group members lack the knowledge or experience they need to complete tasks and maPke decisions.

2.       Some people are not good at setting their own deadlines, managing their own projects and solving problems on their own.

3.       Lack of feedback

4.       Miscommunication among managers and group members

3.       Democratic or Participative Style leader: The democratic or participative style of leadership implies compromise between the two extremes of autocratic and laissez-fair style of leadership. Under this style, the supervisor acts according to the mutual consent and the decisions reached after consulting the subordinates. Subordinates are encouraged to make suggestions and take initiative. It provides necessary motivation to the workers by ensuring their participation and acceptance of work methods. Mutual trust and confidence is also created resulting in job satisfaction and improved morale of workers. It reduces the number of complaints, employee's grievances, industrial unrest and strikes. But this style of leadership may sometimes cause delay in decisions and lead to indiscipline in workers.

4.       Paternalistic Style leader: This style of leadership is based upon sentiments and emotions of people. A paternalistic leader is like a father to these subordinates. He looks after the subordinates like a father looks after his family. He helps guides and protects all of his subordinates but under him no one grows. The subordinates become dependent upon the leader.


Also Read:
5. Leadership - Styles and Qualities
Also Read (Dibrugarh University)


Qualities of a Good Leader

1.       Patience: Patience is the capacity to face difficult situations, hardships or inconvenience without making a single complaint. It is the ability to wait calmly for something to happen without complaining or giving up or getting angry. Patience requires Calmness, Self-Control, Willingness or Ability to tolerate delay. A good leader must show patience while waiting for expected results, facing difficult situations and taking important decisions. He must avoid taking hasty decisions and actions.

2.       Good Personality: A good personality is a combination of physical, mental and social qualities. Good personality helps a leader to influence his followers. Attractive physique and good manners add an advantage to the leader's personality.

3.       Self-confidence: A good leader must have self confidence. This quality is necessary for facing challenging situations and for solving problems easily and effectively.

4.       Human Skills: A good leader must have essential social and human skills. That is, he must understand people. This quality is necessary for dealing with different types of persons and social groups.

5.       Judgment skills: A good leader should be able to examine problems in right perspective. His judgment and decision making abilities should be superior to others. He should be able to form opinions and judge based on facts and not be prejudiced

6.       Communication skills: A good leader should be able to communicate the goals and procedures of the organisation clearly, precisely and effectively to the subordinates. Only then will it be possible for him to convince, persuade and stimulate subordinates to action.

7.       Listening skills: People tend to avoid a leader who does not listen. Hence a good leader in one who can listen to other peoples problems. He should be able to create a culture whereby people can be frank with him and give him information and also give him feedback about himself, which can help him to improve himself.

8.       Inspiring skills: A good leader should be able to inspire people to deal with the “why” question. He should not just command and control but be able to lead the people and get them involved to work together as a team.

9.       Administrative Skills: A good leader must have an administrative ability. This means, he must be able to get the work done through his followers. He must know how to plan, organize and control the work of his followers.

10.   Discipline: A good leader must be a disciplined person. This means he must have respect for the rule and regulations of the organisation. This is because his followers will follow his example.

11.   Initiative: A good leader must always take an initiative. This means he should do the right thing at the right time without being told by others. He must be able to construct and implement his own plan.

12.   Intelligence: A good leader must be smart and intelligent. That is, he should have a good educational background and sound technical knowledge. He should be more intelligent than his followers. If not, his followers will not respect him. This will have a bad effect on his performance.

13.   Innovative:  A good leader must have an art of innovation. That is, he must have a good imagination and visualization skills. He must develop new ideas and tactics to solve problems. He must combine the new ideas with the old ideas.


Also Read:
5. Leadership - Styles and Qualities
Also Read (Dibrugarh University)


Theories of Leadership

The Trait Theory: This approach represents the earliest notions of leadership and until up to three decades ago this approach was very popular. According to this theory, there are certain personal qualities and traits which are essential to be a successful leader. The advocates of this theory are of the opinion that persons who are leaders are psychologically better adjusted to display better judgement and to engage themselves in social activities. Ordway Tead has given a list of ten qualities.

a)      physical and nervous energy

b)      a sense of purpose and direction

c)       enthusiasm

d)      friendliness and affection

e)      integrity

f)       technical mastery

g)      decisiveness

h)      intelligence

i)        teaching skill

j)        faith

According to Hill, "Courage, self-confidence, morale qualities, self sacrifice, paternalism, fairness, initiative, decisiveness, dignity and knowledge of man are all essential qualities of a leader."

Stogdill classified the leadership qualities under six heads: capacity, achievement, responsibility, participation, status and situation.

But the trait theory has many shortcomings, and has been generally criticized on the following grounds:

1.       Various studies prove that the trait theory cannot hold good for all sets of circumstances.

2.       The list of trait is not uniform and different authors have give lists of different traits.

3.       It fails to take into account the influence of other factors on leadership.

4.       The theory fails to indicate the comparative importance of different traits.

5.       There are many persons who have been outstanding leaders in business although they have been humour less, narrow-minded, unjust and authoritarian. In the same manner, there have been many persons who were not good leaders although they had traits as specified for leaders.

The Behavioural Theory: The short comings of the trait theory led to a significant change in the emphasis of leadership approach. This shift in emphasis began to focus an attention on the actual behaviour and actions of leaders as against personal qualities or traits of leaders. According to his approach, leadership involves an interpersonal relationship between a leader and subordinates in which the behaviour of the leader towards the subordinates constitutes the most critical element. The good behaviour of the leader raises the morale, builds up confidence and spirit among the team members and the lack of good behaviour will discard him as a leader.

But the behavioural theories also suffer from certain limitations, e.g., what constitutes the most effective style of leadership behaviour? Moreover, a particular behaviour or action of a leader may be effective at one point of time while the same may be ineffective in some other point of time and in some other circumstances.

The Situational Theories: The situational theories emphasize not on personal qualities or traits of a leader, but upon the situation in which he operates. The advocates of this approach believe that leadership is greatly affected by a situation and maintain that leadership pattern is the product of situation at a particular time. A good leader is one who moulds himself according to the needs of a given situation.

The situational theory of leadership suffers from the drawback that it fails to consider the fact that in the complex process of leadership, individual qualities and traits of the leader also play an important role. In the words of Thomas Gordon, "Situationist has overlooked the possibility that some traits influence their possessors to attain leadership success and some others increase the chances of their becoming leaders.

The Follower Theory: The shortcomings of the Trait Theory, the Behavioural Theory, and the Situational Theory influenced certain researchers to focus their attention on the followers. According to this theory the essence of leadership is follower ship and it is the willingness of people to follow that makes a person a leader. The members of a group tend to follow only those whom they recognize as providing means for achieving their personal desires, wants and needs.

Like all other theories, the Follower Theory also sounds well but it also represents only one sided view. The best ting will be to integrate the various theories to study leadership pattern. To conclude, we can say that effective leadership depends on the traits of the leader, situation and the type of the followers.

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