Leadership Styles and Their Effects on Productivity

Leadership plays a pivotal role in shaping the productivity, morale, and overall success of any organization. In the 2021 comparative study conducted by Setiawan, Cavaliere, Reynosa, Wisetsri, Jirayus, Chauhan, Tabuena, and Rajan, the authors explore the profound impact different leadership styles have on employee performance across various industries and cultures.

The study dives into three dominant leadership styles—autocratic, democratic, and laissez-faire—highlighting their unique influence on workplace behavior and organizational outcomes.

Autocratic leaders tend to make decisions independently, relying on authority rather than collaboration. While this style can ensure quick decision-making and clear direction, it may stifle creativity and employee engagement over time. Productivity may rise initially, but long-term motivation often suffers.

Democratic leadership, on the other hand, encourages team involvement in decision-making processes. Employees under democratic leaders reported higher job satisfaction, greater loyalty, and improved productivity due to a stronger sense of ownership and inclusion. This leadership style is widely praised for fostering innovation and a positive workplace culture.

Lastly, the laissez-faire approach grants employees significant autonomy with minimal interference. While this can work well in highly skilled and self-motivated teams, it can lead to confusion, low accountability, and inconsistent output in less experienced groups.

The authors found that autocratic leadership styles often have a negative relation to employee results, and egalitarian, transformative and transactional leaders have a positive and important effect on the success of workers assessed by the high morale, efficiency, engagement, and dedication of the employees. The effectiveness of a style depends on various factors such as industry type, organizational culture, employee demographics, and specific goals. A flexible and adaptive approach, often blending elements of different styles, tends to yield the best results.

As workplace dynamics evolve and employee expectations shift, leaders must continuously evaluate and refine their approach to remain effective.

Ready to Examine Your Company’s Leadership Style?

Understanding how leadership impacts productivity is more than academic—it’s essential to business success. Are your leaders empowering their teams or holding them back?

Take the next step. Conduct a leadership style audit in your organization today.

Analyze your team's engagement, communication patterns, and decision-making processes. Identify which leadership styles are at play—and where there’s room for growth.

Your employees' productivity starts with how they’re led. Let’s lead better, together.

For further information, contact me here.