Leadership Styles and Theories in Decentralized Management – the Path to Transformational Leadership

The leadership style that a leader adopts is fundamental to the effectiveness and results of his or her actions. By understanding leadership style, an individual can improve their leadership skills, and organizations can apply effective practices to promote success and create positive work environments. Based on the theories of behaviour and contingency, this research aims to understand how top and decentralized managers exert their leadership towards their subordinates and what characteristics influence such leadership. It aims to fill a gap in the literature, which is scarce regarding leadership by decentralized managers, and more specifically on the contexts of multinational organisations. The in-depth case study methodology was used, applied to a large industrial company. To this end, semi-structured interviews were carried out with a top manager and ten decentralized managers, in addition to documentary analysis and direct observation. The results indicate that although managers see themselves as practicing a type three or laissez-faire leadership style, they actually follow a transformational style, focused on both production and people. This study adds value to theoretical and practical knowledge about organizational leadership styles, particularly those of decentralized managers, in organizational decision-making, and based on different theoretical approaches.