Theories of Leadership

PSYCH-105 Industrial Psychology

Chapter 7: Leadership

Unit 1

Unit 2

Unit 3

Unit 4


Theories of Leadership

Historically, the concept of supervision has had two rather distinct “phases” which differ considerably in their philosophy. The first phase might be called the “scientific management” phase and the second is probably best labelled the human relations phase. Scientific management in the early 1900s was really established and exemplified by Fredrick W. Taylor. The leader or manger in this system was perceived exclusively as an individual whose sole purpose was to expedite the goals of the organization. Management was completely impersonal in that the interaction of the leader with his subordinates was ignored and the nation that subordinate attitudes or goals might have some relevance to the work situation was not considered. 

The Hawthorne studies marked the beginning of the end of scientific management. That is if Taylorism implied organizations without considering the human element, then the human relation motion has tended to consider people as if they existed free of organizational constraints. Both positions are quite unrealistic: any meaningful model be willing to admit that the formal structure of the organization and its objectives are critically important variables.

Table: Leadership Theories

Great Man Theory

Believe that some persons are born to be leaders. This may include members of royalty, high ranking military officers and industry heads. These theories often portray great leaders as heroic, mythic and destined to rise to leadership when needed. The term “Great Man” was used because, at the time, leadership was thought of primarily as a male quality, especially in terms of military leadership.

The Great Man theory assumes that the traits of leadership are intrinsic. That simply means that great leaders are born…they are not made. This theory sees great leaders as those who are destined by birth to become a leader. Furthermore, the belief was that great leaders will rise when confronted with the appropriate situation. The theory was popularized by Thomas Carlyle, a writer and teacher.

Trait Theories

Similar to great man theory, trait theory suggests that the characteristics or the personality of a person may make him an effective leader. Trait theories are based on qualities of an individual person.  It is believed that people are born with certain traits or characteristics that will allow them to lead.  There have been studies of what people think are the best leadership traits that an individual needs to lead.  Some of the traits or characteristics are:

  • A strong desire for accomplishment
  • Persistent pursuit of goal
  • Intelligence and creativity
  • Creating a vision, mission and a strategy
  • Ability to structure social interactions
  • Accepts responsibility easily
  • Understands the needs of followers
  • Able to motivate people
  • Trustworthy
  • Good decision maker
  • Self confident
  • Assertive
  • Flexible
  • Need for power

Whereas unsuccessful leaders are associated with such qualities as poor temperament, self-centeredness, inability to get along with others, lack of vision, lack of character and have mental health problems as aggression, depression, disorganization etc.


Trait theories often identify particular personality or behavioral characteristics shared by leaders. For example, traits like extraversion, self-confidence, and courage are all traits that could potentially be linked to great leaders. The trait theory of leadership focused on analyzing mental, physical and social characteristic in order to gain more understanding of what is the characteristic or the combination of characteristics that are common among leaders. 

Applicability of Trait Theory

Problem that hinders the full application of trait theory in practice is that leadership as a process of influence reflects in leader’s behaviour and not in his traits. There have been many persons with traits specified for a leader, but actually they could not become effective leader.

The reason for this phenomenon is that there is no direct cause – effect relationship between a trait of a persona and his behaviour. The trait may be only one of the factors shaping behaviour the other factors sometimes even more important are situational variables. These situational variables are not incorporated in trait theory.


There are a number of important difficulties involved in the trait method of studying leadership.

  1. There is a problem of defining and agreeing upon traits. The number of descriptive objectives which can be used to “type” people is tremendously large. 
  2. The second difficulty exists in trying to measure traits. We have many personality tests available today, each of which lists the traits it purports to measure.
  3. Difficult to define traits.
  4. The last objection to the trait approach is probably the most important of all. As a method it does not provide the psychologist with much insight into the basic dynamics of the leadership process.

Behavioural Theories

It states that the best way to study and to define leadership is in terms of “what leaders do” rather than in terms of “what leaders are”. Behavioural theories of leadership are based upon the belief that great leaders are made, not born. Consider it the flip-side of the Great Man theories.

Behavioural theories emphasises that strong leadership is the result of effective role behaviour. Leadership is shown by a person’s acts more than by his traits.

According to this theory, people can learn to become leaders through teaching and observation. In essence, they define leadership as learned, not something you’re born with. The behavioural theories first divided leaders in two categories. Those that were concerned with the tasks and those concerned with the people.

Researchers exploring leadership role come to the conclusion that to operate effectively, groups need someone to perform two major functions:

  1. Task related functions or problem-solving functions: it relates to providing solutions to the problems faced by the groups in performing jobs and activities
  2. Group maintenance functions or social functions: it relates to actions of mediating disputes and ensuring that individuals feel valued by the group.

An individual who is able to perform both the role successfully is effective leader

Leadership behaviour may be viewed in two ways:-

  1. Functional behaviour: Functional behaviour influences followers positively and includes such functions as
    1. Setting clear goals
    2. Motivating employees for achieving goals
    3. Raising the level of morale
    4. Building team spirit
    5. Effective two-way communication
  2. Dysfunctional behaviour: Dysfunctional behaviour is unfavourable to the followers and denotes ineffective leadership. Such a behaviour may be inability to accept employees’ ideas, display of emotional immaturity, poor human relations etc.

Throughout the literature these are referred to as different names, but the essence are identical. Following are few relevant theories in the category of behavioural theories:

  1. Ohio state leadership studies
  2. Michigan studies
  3. Managerial grid

We will discuss them further.

Implications of the theory:

This theory has some important implications for engineers and managers. They can shape their behaviour which appears to be functional and discard the behaviour which appears to be dysfunctional.

Situational / Contingency Theories

In the 1960’s several scholars conducted research and proposed such an approach arguing that the style of leadership which would be most effective depended upon the situation (Fiedler, Tannenbaum and Schmidt, and Vroom and Yetton). This work was an integral part of the wave of organizational behavior research which led to what we labeled a “Contingency Theory” of organizations at the time.

Contingency theories of leadership focus on particular variables related to the environment that might determine which particular style of leadership is best suited for the situation. According to this theory, no leadership style is best in all situations.

This theory assumes that different situations call for different characteristics; according to this group of theories, no single optimal psychographic profile of a leader exists. According to the theory, “what an individual actually does when acting as a leader is in large part dependent upon characteristics of the situation in which he functions.”

The Contingency Leadership theory argues that there is no single way of leading and that every leadership style should be based on certain situations, which signifies that there are certain people who perform at the maximum level in certain places; but at minimal performance when taken out of their element.

Effectiveness of leadership will be affected by the factors associated with the leader and factors associated with the situation. These dimensions of leadership have been presented in fig.:

Fig.: Factors affecting Leadership Effectiveness

Fiedler introduced the relationship between the leader and his subordinates and the power of the leader. Tannenbaum and Schmidt were concerned about the group of follower’s size, history and values, as well as the time pressures facing them. Vroom and Yetton were concerned with the group’s decision making style- autocratic, consultative, or group based.


We will further discuss all situational theories in detail.

Transformational Leadership Theory / Relationship Theories

Bernard Bass and colleagues developed the idea of two different types of leadership, transactional that involves exchange of labor for rewards and transformational which is based on concern for employees, intellectual stimulation, and providing a group vision.

Relationship theories, also known as transformational theories, focus upon the connections formed between leaders and followers. Transformational leaders motivate and inspire people by helping group members see the importance and higher good of the task. These leaders are focused on the performance of group members, but also want each person to fulfil his or her potential. Leaders with this style often have high ethical and moral standards.

The leader wants to motivate everyone to work for the group, not just for themselves.  The leader also strives for each individual to reach his or her potential.  In the end, the whole group or organization will benefit from everyone’s effort.

Transactional theories / Management Theories

Transactional theories, also known as Management theories, focus on the role of supervision, organization and group performance. These theories follows a system of reward and punishment for the work performed by subordinates. If people are successful, they are rewarded with bonuses, prizes, etc.  Managerial theories are often used in business; when employees are successful, they are rewarded; when they fail, they are reprimanded or punished.

The transactional leader is given power to perform certain tasks and reward or punish for the team’s performance. It gives the opportunity to the manager to lead the group and the group agrees to follow his lead to accomplish a predetermined goal in exchange for something else. Power is given to the leader to evaluate, correct, and train subordinates when productivity is not up to the desired level, and reward effectiveness when expected outcome is reached.

Author – Dr. Niyati Garg

Please Share:

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top
Scroll to Top