Major Leadership Theories Every Manager Should Know

Not everyone is born a leader. Some people need to strive to become a leader. After all, a leader plays a very crucial role in driving the company toward success. To become a leader, it’s essential you possess the right skills or acquire them. That’s where leadership theories can help. These theories tell us why certain people have a good chance of becoming a leader, what qualities they have, and what sets them apart from others.

A leader is much more than someone who sets the mission and vision for the company or guides the workforce toward organizational goals. They know how to motivate employees to work harder and give their best, have amazing leadership skills, and are learners. Below we have listed some major leadership theories that every aspiring leader should know.

What are Leadership Theories?

The leadership theory answers why and how certain people become leaders. The purpose of the theory is to assist aspiring leaders in learning the qualities of a great leader so they can embrace the same. A great leader is known for two essential attributes — morals and strong ethics. They are ambitious, passionate, and influencers. They focus on achieving organizational objectives by aligning employee personal growth with the company’s objectives.

Leadership Theories Every Aspiring Leader Must Know

The Management Theory

This theory was developed to boost productivity in employees by encouraging them to perform better and rewarding them every time they hit a milestone. A manager oversees the employee’s performance and ensures that each task is accomplished following the organization’s policy and procedures. Leaders embrace this approach when there’s a strict deadline or a requirement to achieve a goal. They might use their leadership title, authority, and power to implement rules that can guide the workforce to work toward the goals.

Theory of Transformation

As the name suggests, the theory of transformation focuses on bringing a change or evolution in an organization by boosting employees’ morale. A leader encourages employees to perform better and beyond their capabilities. They develop a strong vision for the workforce and inspire them to do their best. A great leader knows that the company’s success depends largely on its employees’ productivity. Transformational leaders motivate their employees at every stage of their development and set an example.

The Theory of Contingencies

This theory suggests that there isn’t one way to achieve success in an organization. A company's route to achieving its long-term objectives depends on several internal and external factors. This theory explains that every leader is bound to face challenges, and risks will be present in all projects. It’s the combination of the leader’s skills and abilities to overcome those challenges that determine how good they are. Your leadership skills are judged on the basis of how you assess different situations and whether you are capable of making fair judgments.

The Theory of Situations

A leader should understand that each project presents different risks, and each situation requires a different action. They must be willing to embrace a shift when needed and direct the workforce in that manner. This theory also believes that the leader acts based on how the team members work. According to the theory of situations, a leader should work with their employees, build a connection with them, and adapt to the changing environments so that the company’s always headed toward its final objectives.

Simply put, your leadership style depends on who’s being led. If you are working with a skilled workforce, a democratic leadership style is your best bet. If the team isn’t familiar with the project, it’s best to adapt to an autocratic leadership style. The theory of situations is all about different styles of leadership and the ability to switch your role as and when the situation demands.

The Great Man Theory

There’s a saying that leaders are not born; they are created. Then, there’s another saying that leaders have qualities that they inherit from great leaders. According to the Great Man theory, leaders are born and have certain characteristics that they inherit instead of learning. This includes wisdom, appeal, and glamor — to name a few. The great man theory says that leaders do not learn to become leaders. They don’t acquire these skills, but they already have them. You are either born a leader or not. This also shows that the leaders who inherit the leadership qualities are likely to implement them across all industries and roles.

Behaviorist Theory

This leadership theory contrasts with the great man theory in that it believes leaders are not born. Instead, they are trained to become leaders. They learn these qualities from the environment they are born and raised. They don’t have inherent qualities, which means anyone (regardless of their background) is capable of becoming a leader if they acquire the right skills and practice the behavior of a leader in real-world situations. An effective leader is someone who focuses on boosting the team’s morale and driving the team to success. They focus on their team’s personal and professional growth.

Functional Theory

A leader might be responsible for setting the vision of an organization, but they don’t create strategies or oversee each employee to ensure everyone’s goals are aligned with the organization’s objective. That’s the job of a manager. The functional theory focuses on the team and company instead of just one individual. The theory suggests that a company's success depends on the entire workforce. A single person can’t have every task accomplished without the team's support.


Theories of leadership answer why and how some people become leaders, what qualities they have, and how they use these qualities to guide others. Organizational success is often linked to great leadership, but a leader alone isn’t responsible for success. It’s the mutual effort of the leader and the team that drives a company toward success. Understanding the above-mentioned leadership theories will give you a better idea of what it takes to become a leader and how you can acquire these skills.

Updated on: 08-Nov-2022


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