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In current business marketplace, leadership style has great role in organization's economic wealth and progress.
Huge theoretical literature is available to explain the style of leadership and its impact on organization.
Leadership includes the ultimate source of power but has that positive ability in persuading other individuals and to be innovative in decision making. Trait theory was condemned on various grounds and experts emphasized the behaviour aspects for developing good leadership quality in an individual. Behavioural theory was developed in response to the need to account for employee behaviour and motivation.
Contingency or situational theories of leadership recommend that the organizational or work group context affects the extent to which given leader traits and behaviours will be successful. Another approach of leadership is Path-goal theory which proposes that subordinates' characteristics and characteristics of the work surroundings decide which leader behaviours will be more successful. The Vroom-Yetton-Jago decision-making model was initiated by Victor Vroom and Phillip Yetton in 1973 and modifies by Vroom and Jago in 1988.
Currently, theoretical frameworks for the study of leadership have been advanced and new theories are proposed that include leader-member exchange theory, transformational leadership theory, the substitutes for leadership approach, and the philosophy of servant leadership.
Leader-member exchange theory was introduced by George Graen and various social groups in the 1970s and has been modified.
Transformational leadership theory distinguishes between the transactional and the transformational leader.
Substitutes for leadership are actually important in many different organizational settings, but their existence is not explicated in any of the dominant leadership theories. Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. The teams were surveyed using the Team Effectiveness Assessment for Management (TEAM), an instrument developed specifically to assess management groups.
Leadership is indispensable in an organization because leader' trait may affect the success of organization.
According to Kouzes (2002), "Leadership is not a place, it's not a position, and it's not a secret code that can't be deciphered by ordinary people.
The basic principle behind trait theory was that effective leaders are born, not made, thus the name sometimes applied to early versions of this idea, the "great man" theory.
In his famous study, Stogdill concluded that 'A person does not become a leader by virtue of the possession of some combination of traits (1948). The shift moved management from a production-orientation to a leadership style focused on the workers' human need for work-related satisfaction and good working conditions.
Main characteristics of subordinates identified by the theory are locus of control, work experience, ability, and the need for affiliation. The theory focuses principally on the degree of subordinate involvement that is suitable in different situations. This theory highlights the dyadic relationships between leaders and individual subordinates, instead of the traits or behaviours of leaders or situational characteristics.
Transactional leadership concentrates on role and task requirements and utilizes rewards contingent on performance.
As seen by the employees, it includes the total pattern of explicit and implicit actions performed by their leader (Newstrom, Davis, 1993).

Teams rated in the top 25% on these effectiveness measures were compared with those in the bottom 25% to determine which characteristics differentiated successful from unsuccessful teams. The difference is crucial, managed are people who do things right, but leaders are people who do the right things always.
Many leadership studies based on this theoretical framework were conducted in the 1930s, 1940s, and 1950s. Trait theory was contradicted by behaviourist theorist who asserted that the behaviours displayed by leaders are more important than their physical, mental, or emotional traits.
Likert stated that organizational effectiveness depends considerably on successful leadership provided by managers. Behavioural theory encourages the value of leadership styles with an emphasis on concern for people and collaboration. Four of the more recognized contingency theories are Fiedler's contingency theory, path-goal theory, the Vroom-Yetton-Jago decision-making model of leadership, and the situational leadership theory. Important environmental characteristics named by the theory are the nature of the task, the formal authority system, and the nature of the work group. Theory indicates that leaders do not treat all subordinates in the same manner, but establish intimate relationships with some (the in-group) while remaining stay aloof from others (the out-group). Whereas, transformational leadership deals with developing mutual trust, fostering the leadership abilities of others, and setting goals that go beyond the short-term needs of the work group. The theory is related with providing a description for the lack of stronger empirical support for a relationship between leader traits or leader behaviours and subordinates' satisfaction and performance. It is found in numerous studies that three types of leadership are common in business which include authoritarian, democratic and laissez-faire.
Leader trait research scrutinized the physical, mental, and social characteristics of individuals.
By involving the process of employee participation in structuring the work and the work environment, a manager can successfully lead people towards achieving organizational goals.
It promotes participative decision making and team development by supporting individual needs and aligning individual and group objectives. Fiedler's contingency theory was the first to identify how situational factors interact with leader traits and behaviour to influence leadership effectiveness. The theory includes four different leader behaviours, which include directive leadership, supportive leadership, participative leadership, and achievement-oriented leadership. Many challengers criticized the Vroom-Yetton-Jago model for its complexity, for its assumption that the decision makers' goals are consistent with organizational goals, and for ignoring the skills needed to arrive at group decisions to difficult problems.
Those in the in-group enjoy relationships with the leader that is marked by trust and mutual respect.
Bass's transformational leadership theory recognized four aspects of effective leadership, which include charisma, inspiration, intellectual stimulation, and consideration.
The substitutes for leadership theory propose that characteristics of the organization, the task, and subordinates may substitute for or negate the effects of leadership, thus weakening observed relationships between leader behaviours and important organizational outcomes. In the academic literature, leadership has been recognized as significant topic in the field of organizational behaviour.
In general, these studies simply looked for significant associations between individual traits and measures of leadership effectiveness. Likert identified four main styles of leadership-Exploitative, Benevolent authoritative, Consultative and Participative or Democratic. The theory proposes that the "favourability" of the situation decides the effectiveness of task- and person-oriented leader behaviour. The path-goal theory is a process in which leaders select specific behaviours that are best suited to the employees' needs and the working environment so that they may best guide the employees through their path in the obtainment of their daily work activities (goals) (Northouse, 2013).

A leader who shows these qualities will motivate subordinates to be high achievers and put the long-term interest of the organization ahead of their own short-term interest, according to the theory.
This theory states that there are aspects of the situation that can reduce the importance of leadership. Authoritarian leadership is commanding and sets clear expectations for employees in the organizational. Leadership is one with the most dynamic effects during individual and organizational interaction. A leader's ability to influence others may be based on a variety of factors other than his or her formal authority or position. Physical traits such as height, mental traits such as intelligence, and social traits such as personality attributes were all subjects of empirical research. Fiedler's contingency theory has been criticized on both conceptual and methodological grounds.
Theorists disapproved this theory on the basis of fact that it does not consider interactions among the contingency factors and also because of the complexity of its underlying theoretical model, expectancy theory. It sorts these aspects into two categories: substitutes (an aspect of the situation that leads employees to behave in the same way that a leader would get them to behave) and neutralizers (a neutralizer is something that lessens the effect of something else).
Democratic leadership promotes feedback and input from managers or employees regarding organizational performance. It is said that ability of management to perform "collaborated effort" depends on leadership capability. Historically, there are three major leadership theories which included the trait approach (1930s and 1940s), the behaviour al approach (1940s and 1950s), and the contingency or situational approach (1960s and 1970s).
However, empirical research has supported many of the specific propositions of the theory, and it remains an important contribution to the understanding of leadership effectiveness. Empirical research has provided some support for the theory's propositions, mainly as they relate to directive and supportive leader behaviours.
Laissez-faire is a hands-off approach, where managers and employees work according to their own preference and schedule.
The main contribution of leadership Substitutes theory is that it has offered insights into how employees might be encouraged to work hard by means other than through the formal leader. Influence leaders provide could also come in part from work design, reward systems, peer leadership, and self-management. This type of a leader trusts his employees have enough confidence in them to seek and use their ideas. Business holders who provide leadership can change an employee from a worker completing projects to a valuable team member.
Leadership skills can assist in changing an employee's mentality by instilling an ownership mind-set. Many studies have demonstrated that role of leadership is critically important to accomplish the performance of organizations (Boal and Hooijberg, 2000; Peterson). A good leader uses all three styles, depending on what forces are involved between the followers, the leader, and the situation.

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