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What Is Organizational Leadership Theory?

By Osmand Vitez
Updated: May 17, 2024

Organizational leadership theory is a concept that defines how an entity governs itself through those individual who dedicate their lives to its workings. In some cases, arguments can be made that organizational leadership is simply an extension of individual leadership traits or styles. Quite often, this is true as an organization is simply a legal entity that has no morals or inner beliefs to guide it, save for the individuals who work in and believe in the organization. Common types of organizational leadership theory include trait, behavioral, and participative theories, though a great many other theories can exist. The owners, executives, and board members are typically those individuals who set the tone for organizational leadership.

Trait leadership theory surrounds itself with the characteristics or traits necessary to be a great leader. Unfortunately, there is no set list of traits that simply defines a great leader, though several traits overlap those individuals who are called great leaders. A few common traits include charisma, negotiation skills, and strength of character along with moral guidance and communication skills, among others. Through skill, a leader infuses an organization with his or her leadership style and belief system. Therefore, trait organizational leadership theory can vary as any leader has and uses a set of skills for the surrounding environment.

Behavioral organizational leadership theory is quite a bit different than trait leadership theory. Under this theory, an organization acts in a manner based on the behavior of the individuals working there. For example, a company may be ruthless in its actions and focus only on profits if this is how the leader — owners, executives, or board members — acts and believes. All employees typically act in the same manner as they see this behavior as normal, regardless of what society in general believes or defines how a company should act. Again, there is no single answer here as well for organizational leadership theory.

Participative organizational leadership theory is a bit more involved than other types. In this style, an organization allows more input into how the leaders choose to operate and govern the entity. Both internal and external sources may be used in creating an overall leadership theory. In some cases, this allows an entity to infuse itself with the morals or beliefs of society, thereby naturally allowing it to become more accepted as an organization. This theory is dangerous, however, as less guidance may be possible in terms of allowing too many individual beliefs to guide the organization’s actions.

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