Corporate Culture & Leadership Styles

The 5 Style of Leadership Styles That Can Define Your Corporate Culture

Corporate culture and leadership styles. For years, "organizational culture" was seen as a trendy, fleeting buzzword in the corporate world, but it has since evolved into much more than that. Because HR directors recognize that the correct culture supports productivity, engagement, and innovation, culture is now used to recruit and retain employees.

The working environment created by an organization's values, strategic vision, and mission is culture. It also establishes the tone for interpersonal connections within a company. What is one of the most potent determinants of organizational culture? Leadership.

5 Style of Leadership

Through their leadership, the most exemplary leaders try to change the culture. But it's how they do it—their leadership style—that determines an organization's culture.

Traditional "command-and-control" features such as top-down leadership, class structures, and profit-driven principles can be used to influence culture. They can also choose to lead by incorporating the New Leadership Paradigm elements, such as egalitarian structures, transparency, and purpose-driven values. Here are five different leadership styles that can shape your corporate culture.

1. Directive Leadership: A Culture of Consistency

A pyramid structure is used in directive leadership, with power flowing from the top down. Those at the top offer explicit instructions and assignments to those at the bottom. This leadership style does not promote a collaborative organizational culture characterized by dialogue, openness, and collaboration.

Instead, directive leadership divides people into classes based on their position in its structure. Rewards and punishments are used for government workers and the broader company culture. This is why "coercive management" is used to describe this leadership style.

Consistency culture. Consistency is a hallmark of directive leadership. Others are expected to follow the ideals and behavioral patterns established by leaders. As a result, employee performance and organizational culture are predictable and constant. On the other hand, organizational consistency comes at the expense of organizational adaptability. 

According to research, team members require flexibility and dynamism to respond to changing market forces or circumstances with creativity and innovation. Additionally, when team members' perspectives are heard early in the planning process, they are more likely to "buy-in" to whole-system change. Unfortunately, directive leadership, which prioritizes top-down organizational change, does not have this trait.

2. Transformational Leadership: Creating an Inspiring Culture

Exploring what determines your organization's culture—and implementing adjustments to improve it—is at the heart of transformational leadership. Transformational leaders start by gathering their team members to provide candid feedback. Employees define personal goals and aspirations, as well as problems and opportunities. 

Then, while defining a course for constructive organizational change, executives match the organization's aims and values with those of its team members. Why? Morale has been found to boost productivity when organizational and individual ideals are aligned. Employees' aims and ideals are reflected in the broader goal, which is to encourage their transformational tendencies.

Inspirational culture. Everyone is eager to get their hands on a paycheck. Great employees, on the other hand, are motivated by something else. "Motivation generated from values, purpose, love, joy, or compassion is distinct from motivation generated from ego, power, status, or a desire for external rewards," Susan Fowler says in Why Motivating People Doesn't Work...and What Does. 

Short-term motivators include things like prestige and money. Transformational leadership motivates team members because they know they are working for something bigger than themselves.

3. Servant Leadership: Culture of Inclusion

Servant leadership reverses the organizational pyramid, allowing everyone to serve as a leader. The leader establishes the visionary goals and strategic direction of a company. The manager then plays a supporting role while employees work to attain these goals. Servant leaders put the needs of their organization's stakeholders and the greater community first. 

Servant leadership is distinguished from other leadership styles by its service component. Employees are empowered by participative leadership, which involves them in decision-making. On the other hand, servant leaders empower people by taking on a supportive position that assists them in achieving organizational goals.

What is the one thing that all great leaders have in common? Their motivations aren't only self-serving. More information is available in our free guide. How to Become a Servant Leader

Inclusionary culture. In his contribution to the essay collection Servant Leadership in Action, Michael Bush, author of A Successful Place to Work for All, believes that great organizational cultures are built on trust, pride, and enjoyment. 

"These developing firms build and encourage leaders toward a servant attitude and approach," Bush continues, "they cultivate servant leaders who create environments where everyone feels trusted, empowered, supported, and treated fairly." The main goal, according to Bush, is for leaders to abandon their "autocratic, command-and-control" methods and use every ounce of staff potential to effect systemic change.

4. Participative Leadership: Culture of Innovation

Participative leadership uses a democratic approach to help team members reach an agreement. Like transformational and servant leadership, participative leadership earns trust and commitment to achieve whole-system change. Leaders make the final choice, but they do it after engaging all team members in the process of compromise, collaboration, and consensus-building. 

Participative leadership, like any democracy, necessitates a culture of information sharing and egalitarian frameworks that offer all team members a voice. MIT researchers discovered that "perspective giving"—sharing one's narrative with others—better promotes trust and empathy among groups with opposing viewpoints than the concept of "perspective-taking."

Innovation is a culture. According to Yale Insights from Yale School of Management, a creative company culture necessitates common ideals, participation, and excitement. Most significantly, it necessitates an environment where team members feel free to take chances and think for themselves. 

Participative leadership develops a culture of empathy necessary for creativity to thrive through open discourse, collaboration, and shared ideals. "Empathy is taking in the perspectives of others and paying attention to what they say and don't say," says Jeffrey Sanchez-Burks of the University of Michigan Ross School of Business. You become a lot more adept at knowing how to develop your thoughts when you learn how to do it systematically."

5. Authoritative Leadership: Compliance Culture

Authoritative leaders define an organization's long-term goal and clearly explain the duties that each employee will play in that vision. Authoritative leaders lead by example and inspire others to do the same, but they can also foster a rank-and-file mentality that stifles cooperation, creativity, and professional growth. 

Employees are aware of their position in the organization's hierarchy and are not encouraged to stray from it. This represents traditional command-and-control values such as top-down leadership and a hierarchical organization in a pyramid shape.

There are a few characteristics that authoritative and directive leadership have in common. The most significant difference is that power can be more evenly dispersed under directive leadership. Under directive leadership, a small group of leaders could set goals and give explicit instructions and responsibilities to subordinates. 

However, under authoritarian rule, authority is concentrated much more. Without anyone else's input in the organization, one person defines policies, goals, and direction.

Compliance culture. Authoritative leaders may find it challenging to build a culture of empowerment or professional development. Employees may not feel valued as individuals, and they may not see a clear link between their achievements and the company's success as a whole. This type of organizational culture tells millennials that if they want to develop in their careers, they'll have to look for work elsewhere. 

Millennials now make up the majority of the workforce in the United States, and they want to work in a holacracy rather than a hierarchy. They believe that good ideas should be heard no matter who comes up with them. This concept clashes with authoritative leadership's promotion of a rank-and-file culture.

Furthermore, research shows that baby boomers are slightly less inclined than millennials to believe that organizational hierarchies are beneficial. Leaders who are "team-oriented" and "participative" are valued by baby boomers slightly more than millennials. As a result, a compliance culture may meet opposition from personnel of all ages.

Setting the Tone for the Culture of Your Company

Your leadership style sets the tone for the culture of your company. Leaders are responsible for not only establishing goals, policies, and the overall direction of organizations but also deciding who has a say in the process and how those goals and policies are achieved. It's critical to examine the leadership style you want to characterize your company's culture when deciding how to improve it.

In different ways, servant leadership, participatory leadership, and transformative leadership encourage cooperation and open exchange of ideas. Cultures of creativity, inclusivity, and inspiration are valued in organizations. Internal misalignment, confusion, and resistance to non-hierarchical power structures—or a failure to address underlying problems—are all possible downsides.

Direction, goals, and purpose are all clearly defined through directive and authoritative leadership. Consistency and predictability are awarded to businesses. They can, however, be limited by a lack of teamwork, creativity, and a pipeline for leadership development. Employees may feel distracted, unappreciated, and tempted to seek professional growth outside the company as a result of this. Finally, workplace cultures that help individuals succeed also help businesses succeed.

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