Democratic Leadership - Positive Impact on Corporate Performance

Many organisations now prefer to use multiple approaches and techniques as successful variables to accomplish a specific goal and control actions of employees within the company. But, such methods and techniques may be misused by leaders or administrators that can cause a negative effect in the business.

This essay explains how within a company leaders, managers and teams or groups can function easily or can use the accurate strategies and tactics to be successful. This study consists of six different approaches for controlling employee behaviour inside the corporation. First, appropriate types of leadership can be categorized as autocratic, democratic, and laissez-faire. In a different situation, each style of leadership can be used, which may have a negative impact or positive impact on corporate performance. In addition, MacGregor (2009) summarised that transformational leaders seem to be working better than transactional leaders in providing the best satisfaction for workers. Second, according to Kotterman (2006), leadership and management have different goals and responsibilities. 

For example, administrators use the concept of X and Y to develop their employee comprehension skills. Thirdly, the similarities between team and group were discussed in order to clarify how both work within an organisation. Finally, it was necessary for the formal and informal groups to show how they can be used accurately within the industry. Similarly, the group development was explained by describing the different stages of group formation theory. Leadership is defined as the capacity of company’s management to set and achieve difficult targets, take fast and decisive steps when needed, outperform the industry, and encourage others to perform at highest level possible.

Managerial leadership includes three styles of leaders. Firstly, autocratic leaders show a tendency to lead their followers by telling them what to do which can help the business to move in a clear path. In addition, when a company faces a rapid change or disaster, this approach tends to be successful. According to Iqbal, Anwar and Haider (2015), this is because autocratic leaders seem to respond quickly to the situation compared to other styles of leaders. Second, democratic leaders seem to make their own decisions through using sharing policies to ensure equality for all stakeholders. 

The restaurant chain ‘Kentucky Fried Chicken’ uses democratic approach which leads to the better functioning of employees. That is, the managers are encouraged to share their ideas and develop plans with the employees, which makes the employees feel motivated and creative. Finally, in laissez-faire leadership style, leaders seem to follow a hands-off method, which ensures that all workers can be part of a team to define key objectives and to find effective strategies or methods to accomplish those objectives. 

Frischer (2006) and yang (2015) both suggested that workers had complete control over the tasks as per the company instructions.An example of a laissez-faire style of leader is Warren Buffet, whose successes have been well-documented, has surrounded himself with people that he knows can execute their tasks creatively and efficiently without his assistance, and interfered only when it was necessary to correct an unfortunate circumstance, not to mention that he would even permit errors to happen for his people to learn from those mistakes. According to laissez-faire leadership style can be used in business techniques and volunteer organisations.