The leadership capability of any organization is critical to organizational performance and success (Bolden, Gosling, Marturano & Dennison, 2003). In the global competitive environment, organizations are under pressure to achieve productivity goals necessitating high collaborative efforts in order to achieve sustainable performance (Barnett, 2016; Dias et al., 2016). Effective leadership is critical to this goal. Leadership theories provide an understanding of the pathways through which leadership impacts on performance and productivity (Bolden et al., 2003; Dias et al., 2016). Based on the context that effective leadership can be promoted through understanding of core leadership theories and tools associated with each one, this review discusses the various leadership theories, specifically examining the trait, behavior, power and influence, contingency, transformational, and transactional theories. The skills and behaviors inherent in each leadership approach is reviewed to support practical application of concepts.

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Trait Theory
This is one of the earliest approaches to the study of leadership and arose from the “Great Man” theory which held that leadership qualities were inherited, and that great men were born, rather than made (Bolden et al., 2003). Trait approach theories focus on distinct qualities that differentiate leaders from followers, with an implication leaders can be identified based on those differentiating traits (Dias, Upperman & Trumpy, 2016). Thus, trait theories focus on the personal qualities of the individual or the leader that distinguishes the person from non-leaders (Barnett, 2016). Recruitment and selection of leaders then targeted persons with identified or desired traits (Bolden et al., 2003).

Commonly studied traits included aspects of personality such as dominance, aggressiveness, intelligence, dependability, ambition, self-esteem, emotional stability; physical factors such as appearance, height, age; and, skills such as social skills, verbal skills, group task supportiveness, and technical skills (Bolden et al., 2003; Dias et al., 2016). A problem with this theory is that a person who has a combination of such traits is not necessarily a good leader and no trait has been found that is exclusive to leadership (Bolden et al., 2003) However, it has been found that cognitive schema consisting of traits are important constructs that may predict perceptions or emergence of leadership (Dias et al., 2016).

Behavioral Approach
The focus for research in leadership shifted from leadership traits in the late 1940s to leader behavior (Barnett, 2016). The goal was to identify leader behaviors that promoted effectiveness among subordinates (Dias et al., 2016). The reason for the shift lay in the fact that studies of trait yielded inconclusive results. For instance, traits such as loyalty, honesty and courage cannot be measured. Behavioral theories emphasize human relationships, outputs, and performance (Bolden et al., 2003). The path-goal theory illustrates the behavioral approach to leadership. For instance, the leader reinforces the change in behavior required from the follower by demonstrating available rewards, and showing the follower the paths through which that reward can be obtained (Barnett, 2016). The leader’s behavior therefore, represents the operant condition cue that induces the follower to behave in a desired manner or to accomplish a task. Environmental cues and standardized cues can also impact on followers’ behavior (Dias et al., 2016). Since this leadership focuses on the actions of the leaders rather than their personal qualities, it is characterized as a style approach with common leadership styles distinguished such as autocratic, democratic, and human relations styles (Bolden et al., 2003).

Power-Influence Approach
This is a leadership approach that is leader-centered and proffers that causality takes place when leaders direct and followers act on that direction. The effectiveness of leadership power in this approach depends on the amount and type of power the leader has (position and personal power) and how the leader manages that power (Dias et al., 2016). Leadership power is used to influence the behavior of followers, superiors, peers, as well as other stakeholders that are connected to the organization (Bolden et al., 2003; Dias et al., 2016). Position power encompasses the potential influence inherent in the person’s position within the organization, the leader’s attributes, as well as leader-follower relationship. Personal power encompasses the potential influence due to the task expertise of the leader as well as influence that is based on friendship and loyalty from followers (Dias et al., 2016). Effective leaders rely more on personal power than position power (Dias et al., 2016).

Contingency Approach
Contingency or situational leadership theories proffer that the organizational context or work group context determines or affects the extent of the effectiveness of leader traits and behaviors (Barnett, 2016). Some well-known contingency theories include Fiedler’s contingency theory, Vroom-Yetton-Jago decision-making model, and the situational leadership theory. Fiedler’s contingency theory was first introduced in 1967 and specifies how situational factors act together with the traits and behavior of the leader to affect leadership effectiveness. The favorability of the situation is proffered to determine how effective the task-/person-oriented leader behavior will be (Bolden et al., 2003; Barnett, 2016). Favorability is in turn determined by level of respect and trust the followers have for their leader, the extent of structure in employee responsibilities, effectiveness of performance measurements, and leader’s control over employee rewards. The most favorable situation occurs where the followers respect and trust their leader, tasks are highly structured, and control over rewards and punishments is maintained by the leader. While task-oriented leaders are more effective in highly favorable or highly unfavorable situations, person-oriented leaders are more effective where the situation is moderately favorable or unfavorable (Barnett, 2016).

Transactional Leadership
Transactional leadership is a contractual style of leadership where exchange of rewards and performance occurs between the followers and leaders (Nanjundeswaraswamy & Swamy, 2014). The leader focuses solely on task completion as well as employee compliance while followers receive compensation in return for meeting set performance criteria or goals. The followers perform their tasks but have no motivation to put out additional effort and no commitment to the organization (Bolden et al., 2003; Barnett, 2016). The transactional leader makes sure that followers understand their roles and motivate followers using rule enforcement, contingent rewards, as well as corrective actions. In other words, organizational punishments and rewards are used as means to influence worker performance (Nanjundeswaraswamy & Swamy, 2014).

Transformational Leadership
In transformational leadership, the leader and followers strive for higher levels of both personal and work advancement (Bolden et al., 2003; Barnett, 2016). Four behaviors found in this leadership approach are intellectual stimulation, motivation, charisma, and consideration for followers. Motivation describes the ability to create higher standards and inspire followers to strive for those goals; charisma describes a sense of mission as well as trustworthiness; intellectual stimulation is a behavior that promotes creativity among followers; and consideration for followers encompasses care for their personal and professional development (Nanjundeswaraswamy & Swamy, 2014). This leadership approach leads to increased motivation, commitment, and productivity among followers (Nanjundeswaraswamy & Swamy, 2014).

Effective leadership is critical to organizational success and competitiveness. Leadership theories provide an understanding of how leadership impacts on performance and productivity. Leaders can become more effective by understanding contemporary leadership theories and the behaviors that promote follower motivation and effectiveness. The trait theory identifies distinct qualities that differentiate leaders from followers, recruitment and selection of leaders can then targeted persons with identified or desired traits. Behavioral theories emphasize human relationships, outputs, and performance; leadership styles such as democratic, autocratic, and human relations are identified under this approach. In the power-influence approach, effectiveness of leadership power depends on the amount and type of power the leader has. Effective leaders rely more on personal power than position power. The contingency approach sees situation favorability as a critical factor in leadership effectiveness. The transactional approach is contractual, emphasizing exchange of performance for rewards, while the transformative approach attains a change in behavior such that both leaders and followers are motivated, empowered, and put out their best efforts to achieve organizational goals.

  • Barnett, T. (2016). Leadership theories and studies. Reference for Business.
  • Bolden, R., Gosling, J., Marturano, A. & Dennison, P. (2003). A review of leadership competencies and frameworks. Centre for Leadership Studies Publication.
  • Dias, L., Upperman, P. & Trumpy, B. (2016). The Art of Leadership and Supervision. E-Book.
  • Nanjundeswaraswamy, S. & Swamy, R. (2014). Leadership styles. Advances in Management 7.2: 57-62.