Top Leadership Theories Every Manager Should Know

Do good leaders make good managers? Or is it the other way around? It's a chicken-and-egg question that has no clear-cut answer. This often leads people to wonder what the difference between a leader and a manager really is. However, one thing is for sure — while leadership and management are not the same, they both must go hand in hand. 

If managers are to be effective in their role, it is essential for them to imbibe certain leadership skills. And if leaders want to lead successfully, they must know how to manage their followers — employees, peers, and stakeholders — so that they feel more inspired, empowered, and engaged, leading to a successful organization.

Ultimately, both roles need an understanding of human behavior to create a more engaged workforce and more productive workplaces.

In this article, we'll talk about some of the most famous leadership theories that will sharpen your leadership skills and help you perform better as a manager. But before diving into the theories, let's see what leadership theories are all about.

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The Psyche of a Leader: Key Leadership Theories and Styles

For decades, numerous studies have been focused on leadership, giving rise to several theories. These theories are various schools of thought put forth by philosophers, researchers, and cognitive experts to explain what goes into the making of a leader. These theories shed light on the traits and behaviors that can help individuals cultivate their leadership abilities.

That said, here are some of the major leadership theories that every manager needs to know to stay on top of their game.

Contingency Theory

This theory proposes that no one way or style of leadership may be applicable to all situations. In other words, it recognizes that there might be variables influencing any particular situation, and a leader must choose the right course of action, taking into account those variables.  

In this regard, leadership researchers White and Hodgson state, "Effective leadership is about striking the right balance between needs, context, and behavior." The best leaders have not only the right traits but also the ability to assess the needs of their followers, analyze the situation at hand, and act accordingly.

Situational Leadership Theory

Like the Contingency Theory, the Situational Theory stresses the importance of situational variables and doesn't consider anyone's leadership style to be better than the others. 

Put forward by US professor, Paul Hersey and leadership guru, Ken Blanchard, the situational theory is a combination of two factors — the leadership style and the maturity levels of the followers. According to this theory, different situations demand different styles of leadership and decision-making. Leaders must act by judging the situation they are facing. 

Transformational Leadership Theory

The Transformational Leadership theory, also known as Relationship theories, focuses on the relationship between the leaders and followers. This theory talks about the kind of leader who is inspirational and charismatic, encouraging their followers to transform and become better at a task. 

Transformational leaders typically motivate by their ability to show their followers the significance of the task and the higher good involved in performing it. These leaders are not only focused on the team's performance but also give individual team members the required push to reach his or her potential. 

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Transactional Theories

Transactional Theories, also referred to as Management theories or exchange theories of leadership, revolve around the role of supervision, organization, and teamwork. These theories consider rewards and punishments as the basis for leadership actions. This is one of the oft-used theories in business, and the proponents of this leadership style use rewards and punishments to motivate employees. 

Behavioral Theory

In the Behavioral Theory, the emphasis shifts from the traits or qualities of leaders to their behaviors and actions. In sharp contrast to the Great Man Theory and the trait approach to leadership, this theory considers effective leadership to be the result of many learned or acquired skills. It proposes that an individual can learn to become a good leader.   

Great Man Theory of Leadership

This is one of the earliest leadership theories and is based on the assumption that leadership is an inborn phenomenon and that leaders are "born" rather than "made." According to this theory, a person capable of leading has the personality traits of a leader — charm, confidence, intellect, communication skills, and social aptitude — from birth, which set them apart. This theory emphasizes leadership as a quality that you either possess or you don't; it isn't something that you can learn. 

While the theory sounds pretty discouraging to those wanting to learn the ropes of leadership, you might take heart in the fact that most modern theorists dismiss it and even by some leaders themselves. It's still an interesting take on leadership and one that highlights the qualities of great leaders, which have more or less remained unchanged over time.    

Trait Theory of Leadership

This theory walks in the footsteps of the Great Man theory in assuming that leaders are born with traits that make them more suitable for the role of a leader than others who lack those natural-born traits. As such, the theory pinpoints certain qualities such as intelligence, accountability, sense of responsibility, and creativity, among others, that lets an individual excel at leadership. 

One major flaw in the trait approach to leadership is that it doesn't offer a conclusive list of leadership traits. However, the credibility of the theory lies in the fact that the significance of personality traits in leadership is well supported by research.  

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Bottom Line

As you can see, leadership theories are based on different ways of thinking. Some focus on traits and qualities, while some touch upon the importance of situational aspects that influence how leaders behave. Like many other behavioral concepts, leadership is highly multi-dimensional, and there are numerous factors that go into filling the shoes of a leader. Because the human side of the business is one of the most — if not the most — important elements that determine the success and failure of an organization, leadership will always remain the most prized skill in the business world. 

If you want to up your managerial performance and boost your leadership capabilities, Simplilearn's PMP Certification Training course can get you there. The certification training course prepares professionals (both aspiring and experienced ones) for the very demanding PMP certification exam. With eight industry case studies, 20 industry-based scenarios, 6 hands-on projects, and 7 simulation test papers (200 questions each), the training helps all learners equip themselves with all they need not just to clear the exam, but also become an industry-ready practitioner.

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