An effective business leader is one who is well informed of the latest research which impacts upon leadership and who is also capable of applying this to their own organization within an ethical framework.

Throughout this report the question of leadership in contemporary organizations will be explored and discussed.

Current trends in the study of problems and formation of the management models by the organizations clearly indicate about a certain evolution in the understanding of the basic mechanisms affecting the competitiveness of the company. During the last century the firm conviction of the necessity of strict administration, impersonal procedures and administrative methods of influence was changed by the concept of management as a balanced system of resource management, taking into account the nature of each type of resource. Not so long ago the word "leadership" became popular again.

The interest to the leadership arose in ancient times. The phenomenon of leadership stirred the consciousness of many researchers for many centuries. In the beginning of the twentieth century leadership became the object of research. In the 30s– 50s the number of large-scale studies have been taken in a systematic way.

Starting with the 70s the interest to the study of leadership began to grow more and more, as evidenced by the appearance of works by J. Mc - Gregor Burns, R. Tucker, B. Kellermann, J. Page.
Leadership is classically regarded as a special quality, a model of human or company behavior providing advanced positions.

As a result, the attitude to leadership as a new model of governance that can ensure the survival of a company in terms of changes appeared.
There is a common understanding, shared by almost all researchers: leadership, as a system of governance, should encourage innovative behavior of employees, providing a constant creation and use of new knowledge at all levels of the organization. Thus, we can provide at least two features of the new control system: providing innovative behavior of employees; ensuring of reproduction of leaders at all levels of the organization.

Leaders are people whose eyes light up from the new ideas, who want to "grow above himself”, who are interested in all the new. One of the slogans, which can be found in the literature on modern trends in business management, is: "Leadership is in everybody, resulting in the leadership of the organization”.
Manz and Sims have written that the best leader is the one who makes the vast majority of people who follow him in the leaders for themselves. The basic premise standing behind leadership is that a person must first become a leader for himself, then he or she must transfer these skills to subordinates. Success comes when the subordinates need a leader no longer.

The leader is a person, for which all the other members of the organization recognize the right to take on the most important decisions affecting their interests and determining the direction and nature of the whole group.

He may be appointed officially, but may not hold any official position, but actually lead the team by virtue of his organizational abilities. The chief is appointed officially, from the outside, but the leader is put from the "bottom". The leader does not only direct and lead his followers, but he also wants to lead them, and the followers do not just follow the leader, but they want to follow him. Studies show that knowledge and abilities of the leader are always valued by people much higher than the appropriate qualities of the rest of the group. The leader has the following psychological characteristics: self-confidence, sharp and flexible mind, competence as a thorough knowledge of his craft, strong will, ability to understand the peculiarities of human psychology, organizational skills. But the analysis of real groups showed that sometimes a person, not even possessing these qualities, may become a leader and, on the other hand, a person who has the given qualities, may not be a leader. A situational theory of leadership appeared, according to which the leader is the person who at occurs of any situation in the group has qualities, properties, abilities, experience required for the optimal resolution of this situation for this group. In different situations, the group brings different people as leaders.

Thus, the leader of the group can be only a person who is able to lead a group to the resolution of this or that group situations, problems, challenges, who bears the most important personal features for this group, who bears and shares the values that are inherent in the group. The leader is like a mirror of the group, the leader appears in the particular group, what is the group so is the leader.

Leadership is always personal. The leader can not hide behind any procedure, rules, and regulations. The leader must demonstrate innovative behavior, his task is to change, improve the efficiency, impact on the staff, encouraging them to action.

The ability to see farther and to influence the behavior of others - is the ability of a fundamentally different type of worker. He thinks not only of a more effective job performance. He learns skills, knowledge, methods of transforming the working environment. It is not a knowledge of performance of the work but the knowledge of transformation. This is a qualitatively different knowledge. It changes the very essence of the human resource.

The dream of all the shareholders who decide on major organizational changes, is a general director with a strong charisma. Rumor often attributes to the charismatic personalities the ability to see farther, to understand more, to know what others do not. To some extent this is a super-hero. He is the only one - the heroic leader, it is impossible to put someone next to him. All the others are below - they are the followers. One of the most popular definitions of leadership today is: Leadership determines the presence of followers. The role of followers at transformations is extraordinarily important. The leader is taken for the breakthrough, for the reorganization, for changes. But the organizational changes have a feature. They violate the stability, something familiar, convenient, and comfortable. How competently any changes carry out, the company in any case falls into the twilight zone, zone of anxiety and uncertainty. And in this situation, the presence of a charismatic leader, whom the followers believe, believe utterly, without unnecessary and painful doubts greatly facilitates the changes in the company, at least in the part where there are the followers.

Leadership is a concept that reflects the ability of one person to influence in a certain way the behavior of other people. Early approaches to the study of this process have focused on the personal characteristics of leadership. These researches were followed first of all by a thorough study of behavior of the leaders, and not to what kind of people they refer. Probabilistic theories of leadership are trying to determine the best methods of leadership, describing the situation in which each model of behavior is triggered the most efficiently. In recent the approaches to leadership began to consider the aspects of interaction, considering the influence of subordinates to leaders, and the reverse process. Also attention is paid to the relations between leaders and individual subordinates, as well as to the behavior of leaders, adequate to the more modern forms of group work planning, which focus on the work in teams and collaboration.

According to Daft (2008) leadership is the ability to form a team and to lead them to their targets on the basis of personal authority. People with this ability misuse it in the name of their personal interests.

Daft (2008) examines the theories of leadership and overviews the key concepts. The first theory is the theory of a great man. According to it the leader is a man with the inborn characteristics of the hero, which allow him to have power and influence people. The second is the theory of the personal traits. Since 20s of the last century specific qualities of leadership were tried to be identified. While a definite package of leadership qualities is not found yet, the interest to these studies remains still.

The third type is the behavioral theories. In the 50s of the last century the behavioral differences between effective / ineffective managers reveal: leadership style (democratic or autocratic), the role, functions of management. The argument about which style is better, but later there was discussed the situational use of styles. The fourth is the probability (situational) theories. Leaders can adequately assess the situation and adapt their behavior. The next theories are the theories of influence. There is a charismatic leader in the centre of the study, whose power is based not on the position, but on the personal qualities. There is an attempt to determine the behaviors that distinguish leaders from the others, conditions conducive to the formation of the charismatic leader. It is believed that leaders initiate changes, inspire the followers to read the future. The sixth type is the theories of relationships. Since the late 70s the idea of leadership became associated with the relationship of the leader and his group and their influence on each other. Interpersonal relations are the main factor in the effectiveness of the leader. Here there is the theory of Transformational leadership, which is characterized by the ability to implement significant changes. The transformational leader brings changes in the concept of the future development of the organization, its strategy, culture, production and applied technologies. In contrast, the transactional leader focuses on current activities, the traditional functions of management. This leader is inclined to follow the generally accepted rules and seek stability more than change. Personal qualities required to establish constructive relationships: emotional intelligence, intelligence, honor, morality, courage. Leaders build relationships, motivating people, giving them authority, encouraging teamwork, supporting diversity.

Daft (2008) examines modern theories. Leaders create learning organizations; form the corporate culture to implement the vision. The hierarchical structure is destroyed; organization becomes a community of people with similar interests and goals.

Douglas McGregor, a famous scientist in the field of leadership, named the preconditions of the autocratic leader to the employees the "X" theory. According to the "X" theory:

1. People initially do not like to work and whenever possible, avoid work.
2. People do not have ambition, and they are trying to get rid of the responsibility, preferring to be lead.
3. Most people want security.
4. To make people work, it is necessary to use enforcement, control and threat of punishment.

Based on these initial assumptions autocrat usually centralizes authority as much as possible, structures the work of subordinates, and almost never gives them freedom to make decisions, seeks to simplify the goal, break them into smaller ones, put each subordinate a specific task, that makes it easy to monitor its performance, i.e. closely supervises all the work within his jurisdiction and to ensure the accomplishing of the work may have a psychological pressure, as a rule, to threaten.

Hierarchical division in such organizations is usually very strict. The head of this type focuses on the meeting of basic needs of his subordinates and uses the most autocratic management style.

When the autocrat avoids the negative enforcement, but instead uses a reward, he gets the name of a benevolent autocrat. Although he remains an authoritarian leader, a benevolent autocrat shows strong concern about the mood and well-being of subordinates. He may even allow or encourage their participation in the planning of tasks. But he retains de facto the authority to enact and enforce decisions. And how gracious the leader would be, he extends his autocratic style further, structuring assignments and imposing strict observance of rules, which strictly regulate the behavior of the employee.

Representations of the democratic leader of the workers differ from those of the autocratic leader. McGregor called them the "Y" theory:

1. Work is a natural process. If conditions are favorable, people do not only accept responsibility, they strive for it.
2. If people are attached to organizational goals, they will use self-management and self-control.
3. Retention is a function of rewards associated with achievement of goals.
4. The ability to the creative solution of the problem is common, and intellectual potential of the average person is only partially used.
With these assumptions, democratic leader prefers such mechanisms of influence that appeal to the needs of a higher level: need for belonging, high end, autonomy and self-expression. The real democratic leader avoids imposing his will to subordinates.

Organizations with democratic style are characterized by a high degree of decentralization of authority. Subordinates are actively involved in decisions and enjoy broad discretion in carrying out assignments. Quite often, explaining the purpose of the organization, the leader allows his subordinates to define their own objectives according to those he has made. Instead of exercising tight control over subordinates in the course of their work, lower leader is usually waiting for the work to be done up to the end, to conduct its assessment. The head acts as a link, ensuring the correspondence of the goals of the group to the goals of the whole organization and making sure that the group received the needed resources it.

As the democratic leader assumes that people are motivated by the needs of a higher level - in social interaction, success and self-expression - he tries to make the duties of subordinates more attractive. In a sense he is trying to create a situation in which people motivate themselves, because their work, by its nature, is a reward itself. He also helps to ensure that subordinates understand that they have to solve most problems without seeking approval or assistance. But the director invests much effort in creating the atmosphere of openness and trust so that if subordinates need help they can apply to the head. To achieve this, the head organizes the two-way communication and plays a guiding role.

Various studies suggest that the heads - supporters of both the “X” and “Y” theories, achieve significant success in business.
The development of organizational, managerial qualities of a leader is the problem of own training and education. The ability to form the
group, to rally it, to identify goals, set the necessary tasks - these are the requirements for the leader.

In a small group leader is to unify its participants and the direction of their activities. He must close personal communication with nearest neighbors. Simultaneously, a leader must be able to satisfy the interests of the group, not going out the limits of law and civil law and not putting their surroundings in dependence on their blessings. The leader must not only want to lead people, but he also must have the necessary qualities. One of the conditions of leadership is getting the maximum information in the minimum time. Modern means of communication and information comply with this requirement.

Here are some recommendations how to become a leader. The first step towards the leadership is to become a leader for himself. This is achieved by means of combination of behavioral techniques (including the definition of personal goals, self-observation and self-recompense) and cognitive techniques that use positive and constructive thought patterns (like conversation with himself, the construction of mental imagery and mental rehearsal) to create abilities at work and in life. The second step is to show the example of such “selfleadership” to others, giving them the opportunity to see that it brings success, and rewarding others for their own successes in selfleadership. The third and the fourth steps in the implementation of the plan of the leadership is to encourage the subordinates to set goals for themselves and help to create positive thought patterns demonstrating confidence in their capabilities. The fifth step is to ensure that subordinates included the remuneration in their own work, and to make constructive comments to the subordinates, when necessary. Organization of work in the form of a brigade is the sixth step. Finally, the leader promotes the positive organizational culture, which helps to achieve high employment rates.


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McGregor, B.(1978). Leadership. N. Y.
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Manz, C., Cameron, K., Manz, K. and Marx, R. (2008). The Virtuous Organization: Insights from Some of the World's Leading Management. World Scientific Publishing.
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