Major leadership theories: from foundations to modern approaches

Since the 19th century, when Thomas Carlyle popularized the Great Man Theory, scholars have been working to answer the question, "What is the most effective way to lead?"

However, while there are numerous theories, it is understood that effective leadership depends on navigating countless variables and balancing many internal and external dynamics.

Leadership theories attempt to demystify age-old questions about what makes a good leader, the different types of leadership, and their effects on teams.

What is a leadership theory?

A leadership theory is a conceptual framework that explains how and why specific individuals become effective leaders. 

These theories explore the traits, behaviors, and situational factors contributing to leadership success. They provide insights into the qualities of good leaders, such as vision, communication skills, and the ability to inspire and motivate others. 

Leadership theories also examine the dynamics between leaders and followers and the impact of different leadership styles on organizational outcomes. 

Examples include transformational leadership, which focuses on inspiring change, and transactional leadership, which emphasizes rewards and punishments. 

Overall, leadership theories aim to enhance our understanding of effective leadership to improve practices in various settings.

Why study leadership theories?

There are many advantages you can gain from familiarizing yourself with the major leadership theories:

  • Improving leadership skills: understanding different theories enhances your ability to lead effectively.
  • Informing decision-making: provides frameworks for making better strategic and organizational decisions.
  • Enhancing adaptability: helps leaders adapt their style to various situations and challenges.
  • Promoting self-awareness: encourages leaders to reflect on their strengths and weaknesses.
  • Strengthening team dynamics: guides in building cohesive and motivated teams.
  • Driving organizational success: effective leadership contributes to achieving organizational goals.
  • Supporting career development: knowledge of leadership theories can advance professional growth and opportunities.

10 leadership theories to know about

Here are ten common leadership theories, ranging from foundational to the more contemporary:

1. Transactional Theory (aka Management Theory)

Transactional theory is one of the most traditionally common leadership theories in business, focusing on how managers condition their teams. This theory can be as straightforward as a series of rewards and punishments or reveal how managers unify large groups of people, often with disparate motivations, in everyday work settings.

  • Origin: transactional theory has been a cornerstone of organizational leadership practices since the mid-20th century.

2. Situational Theory

The situational theory examines how well-suited different leadership styles are to particular situations. It considers several core variables, including the leader's knowledge and experience, leadership styles, the task at hand, and the group's knowledge and experience. Situational theory promotes the idea that there is rarely, if ever, a one-size-fits-all leadership style.

  • Origin: developed in the 1960s by Hersey and Blanchard, situational theory has been influential in leadership studies for over half a century.

3. Great Man Theory

When people use the phrase "born to lead," they invoke Great Man Theory. Though it doesn't completely discount the role of circumstance, great man theorists emphasize the importance of inborn qualities that propel individuals to positions of significant influence. This theory is comparable to the argument that nature, rather than nurture, plays the most dominant role in shaping a leader's destiny.

  • Origin: originating in the 19th century, the Great Man Theory laid the groundwork for modern leadership theories, although its prominence has waned in contemporary leadership studies.

4. Trait Theory

Trait theory strongly emphasizes the leader's personal qualities but allows for the acquisition of new traits. It balances natural "inborn" talents and the capacity to build new traits through self-conditioning. 

  • Origin: dating back to the early 20th century, trait theory has been a foundational concept in leadership research for over a century.

5. Behavioral Theory

Behavioral theorists reject the notion that "great leaders are born" and assert that great leaders are made through events and direct interaction with their environments.

  • Origin: challenged earlier notions of innate leadership traits, gaining prominence in leadership studies during the mid-20th century.

6. Contingency Theory

Contingency theory posits that outstanding leadership is less about the individual and more about how they adapt to changing, complex circumstances to effectively align their efforts and their team's efforts. Like behavioral theory, contingency theory considers external circumstances deeply.

  • Origin: contingency theory gained traction as a response to the limitations of earlier leadership theories, particularly during the 1970s and 1980s.

7. Transformational Theory (aka Relationship Theory)

Relationship theory emphasizes that the quality of the group-leader connection leads to the most transformative and lasting outcomes. Qualities such as charisma, inspiration, and active listening are especially relevant.

(When crafting the Team Tactics deck, the Pip team drew heavily from transformational/relationship theory to develop rapport-building activities that people genuinely enjoy).

  • Origin: coined in the late 20th century, transformational theory gained popularity in the 1980s and has since become a dominant approach in leadership research and practice.

8. Functional Theory

Functional theory focuses on how groups inform better leadership—such as through a panel of experts or highly autonomous, self-managed teams. It takes an "open forum" approach to prioritizing and planning but often borrows from other leadership theories to execute those plans fully.

  • Origin: emerging in the late 20th century, functional theory has evolved alongside changing organizational structures, becoming increasingly relevant in contemporary leadership practices.

9. Integrated Psychological Theory   

Integrated psychological theory explores how leaders leverage different personality traits at different times. It examines how a leader's public, private, and personal life affects their leadership style and emphasizes technical skill, self-mastery, and habit-building as prerequisites for leadership.

  • Origin: developed in the late 20th century, integrated psychological theory integrates insights from psychology into leadership studies, gaining prominence in the latter half of the 20th century.

10. Power Theory

Power theory looks closely at how leaders leverage their resources and influence. Power theorists assert that leadership dynamics primarily come down to how leaders exert their power and the effects of their actions.

  • Origin: evolving from various disciplines, including sociology and political science, power theory has been a subject of scholarly inquiry for centuries, with applications in leadership studies expanding in the modern era.

4 tips for applying your knowledge of leadership theories

1. Know yourself

Identify your leadership style and personality traits to understand how you lead. Use tools like online leadership assessments and personality tests to gain self-awareness.

2. Understand your team

Learn about your team members and their needs. Build trust and inspire them by respecting their individuality and circumstances. Practice active listening and adapt your approach based on situational and contingency theories.

3. Choose your leadership style

Decide which leadership theories resonate with you and align with your goals. Use these theories to guide your leadership journey and create a feedback loop for continuous improvement.

4. Value personal growth

Embrace challenges as opportunities for growth. Assess risks and stay committed to your development. Believe in the intrinsic value of your experiences to maintain motivation and achieve success.

The next steps on your leadership journey

Developing effective leadership strategies requires a combination of self-confidence, habit-building, and a willingness to seek guidance and support when needed.

By reflecting on the leadership theories and tips discussed in this article, you can identify areas for personal growth and take action to become the leader you aspire to be

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