How Important Are Leaders In Influencing Organizational Performance?

The ability of an organization to realize its goals is pegged on its leadership. Leadership is one of the principal responsibilities of a manager and is also a key determinant of organizational success.   Leadership is a sub-function of the directing function of management that is concerned with channeling the employees’ efforts towards realization of organizational goals (Avolio, Walumbwa, & Weber 2009, 421).  Leadership is the process of influencing the behaviors and the beliefs of the subordinates towards a common purpose. Managers seeking to be effective in their roles must practice sound leadership. Managers are directly involved in determining organizational goals.  It implies that they are better placed to identify the behaviors needed to support the realization of these goals. The goals are communicated to the subordinates, and proper guidance on how to realize the goal is provided to ensure focus on the goals is not lost (Cherry 2011, p.30). Improving the effectiveness of leadership has been a major concern over the years that have prompted diverse studies. The studies have led to the development of different leadership theories.   The leadership theories guide managers when leading the organization.

There are three theories of leaderships and evaluating each one of them helps in identification of the importance of leaders in influencing organizational performance. The theories include trait, behavioral, and situational theories. The diversity of theories stems from the weaknesses found some theories that provide the basis for the formulation of more advanced theories. The continuous research on ways of improving the effectiveness of leaders has led to the creation of many theories of leadership.

Trait Theory

The trait theory holds that one becomes a leader due to inborn psychological and physical characteristics (Dion 2012, p.4). It means that specific people are born leaders and that nothing can be done to make one a leader if the said characteristics are absent. There are some leaders who have special characteristics that empower them to influence the organization’s stakeholders towards a common purpose. This theory does not provide guidance on leadership development. Organizations have leadership development programs that are aimed at enhancing the ability of managers to make decisions. The theory is, therefore, inferior since if fails to appreciate the role of personnel development in the improvement of organizational performance.  One of the theory’s main weaknesses is that it considers leadership in isolation where impacts of the environment on leadership are not considered. It also fails to come up with universal traits that determine the effectiveness of a leader (Schyns & Schilling 2010, p.141).

Behavioral Theory

This theory was introduced to address the weaknesses of the trait theory. The theory holds that leadership does not reside in an individual and that it can be cultivated (Avolio, Walumbwa & Weber 2009, p.426). Behavioral theorists conducted a study that revealed the characteristics of a successful leader. They proposed training and development to enable individuals to acquire these characteristics (Avolio 2007, p. 32). Behavioral theorists came up with three main styles of leadership that includes democratic, autocratic, and laissez-faire.

This theory clearly shows the importance of leaders in influencing organizational performance. Talent management and leadership development are some of the key responsibilities of managers. The theory supports the improvement of individual’s leadership skills and talents that are in line with the dynamic modern business environment. The success of an organization is determined by the ability to grow talents and skills in internal stakeholders to enable them to contribute positively to the realization of organizational goals.  A successful leader identifies the unexploited capacities in the employees and comes up with ways of developing these capacities for organizational benefits.

Situational Theories

Situational leadership theories also referred to as the modern theories provide an advanced perspective of the important of leadership in organizational performance (Komives, Susan & Dugan 2011,p.70).  These theories are based on the assumption that the ideal leadership style is determined by the situational factors. The situational factors in consideration include leader-subordinate relationship, task structure, and the authority held by the leader. Situational theories include the path goal theory, LPC model, the life cycle theory, participative theory, and the Grid theory (Derue et al.2011, p.  33-37). All these theories require leaders to closely examine the situational factors in the organization before deciding on the leadership orientation.

The theory provides a much advanced approach to leadership that supports comprehension of the role of leadership in organizational success. The contemporary organizations operate in an environment that is characterized by changes. The success of organizations operating in such an environment is pegged on the ability of the leadership to practice a leadership that is relevant to the environment. The factors of the micro and micro environment present both opportunities and threats, and the ability to react to the two determines organizational performance.   The internal environment presents the three main situational factors that influence leadership orientation. The contingency theories require managers to monitor the realities in the environment and react to the changes of the situational factors (Giltinane 2013, p.35-37). For instance in the grid approach to leadership, a leader can be people or work oriented.  The participative theory is another contingency theory that provides an insight on how the react to the changes in the environment that influence organizational performance. The theory requires the manager to change the leadership orientation in line with the changing capabilities of the employees.


The traditional and the modern theories of leadership show how leaders influence organizational performance.  Leadership is one of the key responsibilities of a manager and also a key determinant of organizational performance. The train theory is the oldest leadership theory and it fails to provide proper guidance on effective leadership. The behavioral theory is much advanced and it provides a more reliable perspective on leadership.  It clearly shows how continuous improvement of employees through training and development can advance organizational performance. The theory justifies the huge investments organizations make in training and development. Contingency theories of leadership provide the most advanced perspective to leadership since they emphasize of flexibility in leadership that enhances survival in the modern business environment that is characterized by changes. It is clear leadership practices to a great extent influence organizational success.


List of References

Avolio, B.J., 2007. Promoting More Integrative Strategies for Leadership Theory-Building. American Psychologist, Vol. 62,  no 1, p.25-33.

Avolio, B.J., Walumbwa, F.O. & Weber, T.J., 2009. “Leadership: current theories, research, and future directions”. Annual review of psychology, no.60, p.421-449.

Cherry, K., 2011. “Leadership Theories – Eight Major Leadership Theories”. Leadership Theories – Eight Major Leadership Theories. P. 23-55

Derue, D.S. et al., 2011. “Trait and behavioral theories of leadership: An integration and meta-analytic test of their relative validity”. Personnel Psychology, Vol. 64, no 1, p.7-52.

Dion, M., 2012. Are ethical theories relevant for ethical leadership? Leadership & Organization Development Journal, Vol.33 no.1, p.4-24.

Giltinane, C.L., 2013. “Leadership styles and theories”. Nursing Standard, Vol.27, no 41, p.35-39.

Komives, Susan, R. & Dugan, J.P., 2011. “Contemporary Leadership Theories”, p.67-98

Schyns, B. & Schilling, J., 2010. “Implicit leadership theories: Think leader, think effective?” Journal of Management Inquiry, Vol. 20, no 2, p.141-150.


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