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Top Leadership Theories Every Manager Should Know

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7th Aug, 2021
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Top Leadership Theories Every Manager Should Know

Some people are born leaders, while some strive hard and get there. Whatever be your pathway, leadership is perfected through years and years of experience. It is a blend of many different skills, methodologies, and practices that enable leaders to pioneer innovations and solve complex real-world problems.

CEOs of big companies like Apple, Google, Facebook, Microsoft, IBM, and many others have set in some great examples of leadership. While we have heard their inspirational stories and brilliant ideas, we can’t help but wonder – what leadership theories they apply to materialize their ideas into successful ventures? 

You can find out the answer right here!

Today, we’ll take a look at some of the most inspired and time-tested leadership theories. 

Top 5 Leadership Theories

1. Contingency Theory

The contingency theory works on the principle that different attributes define the style of leadership. Each situation is different from the others, and hence, each demands unique techniques. There is no one way about it! Essentially, it depends on the leader and the course of action they choose to tackle a particular situation.

A good leader possesses the perfect balance between context, needs, and behavior. A leader must never fail to understand the needs of his employees, analyze the situation and come to a decision accordingly. These are a few basic elements of Contingency theory. To follow this approach, one must be adept at making fair judgments after assessing a situation.

This theory focuses on the different “variables” that make you a great leader. For example, the success of any leader depends on their experience, accuracy level, followers, and the situation at hand, among other things. 


2. Situational Theory

Situational leadership theory was proposed by Professor Paul Hersey, who believed in two main aspects – maturity of followers and leadership style. He focused on the principles of leadership style and excellence. In his theory, he mentioned that each circumstance would demand a different leadership style. To clarify, when you have skilled team members, a leader must have democratic leadership approach. On the contrary, when the team members are unaware of the situation, it’s best to follow autocratic leadership.

At first glance, the situational theory may look a little similar to contingency theory, but it has some differentiating factors. First, it is important to remember that situational leadership theory depends on choosing the right strategy for a specific situation. Thus, it entails doing the right thing at the right time. Second, it believes that no case is the same, and a leader can not apply a similar leadership style in all situations.

In other words, leaders must react according to the concerning situation, assess the situation, nature and maturity of members, and other determinants. Hersey and Blanchard have classified maturity into different degrees.

These degrees vary from M1 till M4:

M1 – Team members don’t attain skills and motivation to complete work.

M2 – Team members are ambitious and willing but do not have the understanding ability.

M3 – Team members are skilled but not ready to be accountable for their work.

M4 – Team members have all the skills and are motivated enough to do the job.

A leader must be skilled enough to understand the maturity level of the employees and only then take the situational approach accordingly.

3. Transformation Theory

Transformation theory focuses on the relationship between the leader and team members. Hence, transformation leadership theory may also be known as relationship theory since its prime focus is on relations.

This theory brings attention to the centre that is the leader. A leader must be charismatic and inspirational to instil passion among their followers (team members). It focuses on organization goals, group performance, supervision, coordination, and planning by the leader. This theory aims to build a team with enthusiasm and passion. It also signifies the level of contribution each team member must possess.

When following transformation theory, a leader must focus on teamwork, guidance, and leadership roles in an organization. This theory proclaims that efficient leadership is one that gives direction to organizational goals. In this theory, there are two vital domains – punishment and reward. So, while it emphasizes rewarding a member’s success, it also encourages reprimanding members who fail to get the desired results. The aim here is to correct the behaviour of followers, motivating them to work harder for better results. 

This theory is often widely used for training and introductory sessions for new team members.

4. Trait Theory

Trait theory is derived from Great Man Theory. It follows the same pathway, where it is assumed that people are born with certain traits and qualities. This theory helps them to be good leaders. Unfortunately, it tries to stipulate that leaders are born, not made! As a result, one cannot learn the accurate skills of being a leader.

Self-confidence, being extrovert, having communication skills, and courage are gifted qualities to a person. These skills contribute to achieving top leadership positions. Well, to many, this theory may not seem to be justified because it fails to define genuine leadership.

If “particular traits” are key features of a leader, how do people with no such traits become leaders? While some people devoid of these specific traits may make great leaders, others possessing them may never make the mark as a true leader. 

To put it simply, this theory focuses only on the leader’s qualities, traits, and personality – a thought process that seems to be quite dated.

5. Behavioural Theory

This theory is quite interesting as it believes that leaders are made, not born. It is one of the most classic theories of leadership. It focuses on building leadership skills by effective learning, enhancing communication, practising planning, and finding solutions for challenges. In this sense, the behavioural theory contradicts the trait leadership theory. 

It gives a new and progressive approach to leading a team.  Behaviourism is the essence of this theory. This approach aims at the actions of leaders and not on some particular skills. According to this theory, people can develop their abilities by observing and teaching.

If you aspire to gain first-hand leadership & management training from top global mentors and industry leaders, you should check out upGrad’s PG Program in Management. This course is designed to help you become an effective leader by teaching you the fundamentals of management, leadership, and analytical problem-solving. Offered in collaboration with IMT – Gaziabad this 11-month course takes the application-based learning approach and includes interactive discussion boards, quizzes, and case studies. The best part – there’s no entry barrier in this course! Anyone from any educational/professional background can enrol in this course. 

upGrad boasts of a 40,000+ global learner base spread across 85+ countries. Each learner gets 360-degree career assistance and dedicated guidance. Apart from living interaction sessions with mentors, students also engage in peer-to-peer learning, thereby opening up to new ideas and thoughts. 

Wrapping up

Over time, these theories have evolved in many different ways and perceptions. Each has a specific use case and approach to solving everyday business and workplace challenges.


Karan Raturi

Blog Author
Karan Raturi is the General Manager of upGrad North America. He has also led various finance, strategy, and operations teams at Wayfair, Kurt Salmon, and IBM.
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Frequently Asked Questions (FAQs)

1Can a good leader be bad manager ?

There are times when a good manager is not a good leader and a bad leader turns out to be a good manager. But neither of the two situations are beneficial for the company.

2 Name the oldest Leadership theroy?

Trait theory is the oldest form of leadership theory. This theory focuses on individual traits and characteristics.

3 What are the 7 styles of Leadership?

7 leadership styles are as follows: 1. Autocratic, 2. Authoritative, 3. Pace-setting, 4. Democratic, 5. Coaching, 6. Affiliative, 7. Laissez-faire.

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