Why Is Leadership Important in Business Administration?

Why is Leadership Important in Business Administration?

It doesn’t matter if you’re running a non-profit organization, a branch of government, or a for-profit enterprise: you will always need some kind of vision for the future of your group. You’ll also need leaders who can help plan and successfully execute that vision.

From motivating others to cooperate in completing necessary tasks to determining what tasks are essential in the first place – leadership has an enormous place within business. Below we’ll look more closely at the importance of leadership in business administration, and how leadership in the business world can be a valuable quality at all levels of an organization, from the lowest level employee to the CEO.

What is Leadership in the Business World?

So, what constitutes “good leadership” exactly? It’s a surprisingly difficult and rather subjective question to answer. In the business world, leadership can take a wide variety of forms. There are career tracks that require leadership as a fundamental aspect of their job description. At the highest levels, CEOs are the top strategists for an organization – literally the leader of their company. But underneath those high-level positions, leadership skills can remain invaluable in a variety of positions throughout an organization.

According to the Center for Creative Leadership, a nonprofit leadership development organization that has worked with hundreds of Fortune 1000 companies, there are several key qualities of a leader. These qualities include empathy, courage, an ability to delegate, and learning agility — or an ability to learn quickly and apply that knowledge in critical situations. Communication skills are also highly prized among leaders. An effective communicator can not only better delegate tasks to members of their team and clearly convey information to them, as well as those at an executive level, but they can also apply the “courage” aspect of leadership and use their communication skills to broach new ideas that can drive value for the company and shake up the status quo in a good way.

And while the boardroom is a very different environment from a battlefield, the defining characteristics of leadership are quite similar between business leaders and military leaders. An ability to take decisive action is one of the most recognizable traits among leaders. Military research has shown that in battle, a private has about a 20% chance of initiating combat, while that figure is close to 70% for a senior officer. It’s often pretty much the same in the workplace. Taking initiative can be difficult. And if you don’t understand exactly what needs to be done — if you don’t see “the bigger picture” — then taking initiative can be particularly difficult.

For example, corporate trainers help to teach a variety of working professionals with the new kinds of skills that a company needs, which requires a strategic understanding of the company’s dynamic needs in relation to products and services. In other words, a “big picture” understanding.

Similarly, HR managers are involved with strategic planning, must understand individual talents and their relationship to the rest of the organization. And as with many other kinds of business administration careers, that comes down to leadership ability.

Why is Leadership Important in Business?

If you’re running a business, you might need to determine how to delegate responsibilities, deal with interpersonal conflicts, handle unexpected problems, and develop your vision for the company. Business administration leadership is a necessary ingredient for overcoming those kinds of problems.

In fact, the importance of leadership in business administration is hard to overstate. At the highest levels, the influence of a leader, good or bad, can resonate throughout an organization. It can motivate teammates and provide them with a purpose and direction. Good leadership can help to establish company culture and developmental direction of an organization. We have modern examples of great business leaders like Bill Gates, Elon Musk, Steve Jobs, Warren Buffett, as well as other historical examples.

Jack Welch helped grow General Electric, acquiring hundreds of companies and overseeing GE move from a valuation of $12 billion to $505 billion during his tenure. His leadership in evolving company operations to force employees to embrace change, hiring managers who he knew could keep employees engaged, and insisting they work side-by-side with employees to better understand their jobs. Those kinds of decisions can define and redefine and origination from the top down.

But even at lower levels of management and in roles that don’t (at first glance) appear to be leadership positions, leadership can be critical. Effective leadership in business can bolster and promote teamwork, cultivate a sense of greater good, motivate, inspire trust, or provide purpose and direction. In the immortal words of Steve Jobs, “Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.”

Business Leadership Qualities

While we touched on valued leadership qualities and how those qualities transcend any scenario, four of the most important business leadership qualities include:

Leading by example. – One of the best ways to inspire people is to practice what you preach. If you expect 110% from others, but then go home early, you might hurt morale. People want accountability from their leaders.
Strong Communication Skills – As noted before, both written and verbal communication skills can be an essential part of leadership. Cognitive empathy, being able to put yourself in another person’s shoes, can be particularly important for becoming an effective communicator, and making a connection with those who you’re leading.
Emotional Intelligence – In his famous best-selling book, Emotional Intelligence, psychologist Daniel Goleman makes a compelling argument that good leaders are high in a trait he’s called “emotional intelligence.” That includes self-awareness, empathy, motivation, social skills, and self-regulation abilities.
Vision – Leaders need the ability to see “the big picture.” Doing that can require developing a large collection of both hard and soft skills. That might include the ability to see changing market trends, as well as spot openings in the market for new types of products.

But that’s just the beginning. You also need traits like teamwork, problem solving, motivational skills, analytical skills, conflict resolution, and others. Even learning to listen to feedback more effectively can make you a better leader and help you determine the style of business leadership you most want to convey later in your career.

Styles of Leadership in Business Administration

There are many types of leadership in business, and it’s often important to choose one of those styles on a case-by-case basis. For example, if you wanted to foster an environment that allowed for creative and unique solutions, a bureaucratic leadership style would be counterproductive. Four of the most common styles include:

Democratic leaders take informal polling to help inform their decision making, but are ultimately the ones to make a final, decisive call. Sometimes your employees know more about their job than anyone else, and democratic leaders can more easily take advantage of that wisdom. This method of leadership can improve engagement, but may slow down decision making.
Autocratic leadership involves making decisions without consulting others, leaving it up to you, the expert. This can be great for quick decision making, and useful for excluding non-qualified parties from weighing-in. It can also make people feel excluded from important decisions, and you may risk losing the insight of crowdsourcing.
Servant leadership is essentially the opposite of an authoritarian, top-down leadership structure. The servant leader aims to serve the needs of their team, and create a satisfactory employment environment for everyone. This model can have difficulty when you need to make unpopular choices, and can be slower in solving problems than autocratic leadership, but there are also scientifically recognized connections between employee happiness and productivity.
Bureaucratic leadership is basically about establishing rules and procedures for everyone to follow, which leaves no room for guesswork when it comes to expectations. This kind of leadership isn’t ideal for innovative or creative problem solving processes, but great for routine-oriented jobs.

Picking between different styles of leadership can involve weighing your own strengths and weaknesses, as well. For example, servant leadership might require more persuasiveness than autocratic leadership. Learning to navigate the dozens of different styles of leadership and find one that works best for you is something that can require both education and experience to perfect.

Learn Business Administration Leadership at National University

National University is a regionally accredited university that offers a Bachelor of Business Administration (BBA) geared toward developing future business leaders, regardless of their industry or sphere of influence. If you’re contemplating a change of career, or want to tread further down your chosen path, National University can help.

Graduates learn the skills necessary to pursue entrepreneurship or corporate careers in companies of all sizes. Students learn a wide set of business skills ranging from accounting and finance to marketing and management. Concentrations allow students to focus their learning on the skills most appropriate for their own prospective career track in business. If you’re interested in pursuing a career in business administration, get in touch with our admissions team today.