No organization has a vision and direction without leadership. In today's fast-paced business world, effective leadership is more valuable than ever to drive organizational success—and that often comes in the form of organizational leadership.

Organizational leadership is a dynamic and people-focused management style created to lead larger teams. Guided by a strong individual, this approach emphasizes goal setting, team motivation, and tracking inputs and outputs.¹ But what is organizational leadership good for in a business? And how does this management style look in real life?

In this blog, we’ll explore the world of organizational leadership, including its essential components, skills, and career opportunities.

5 Key Components of Organizational Leadership

In short, organizational leadership is about uniting and operating a team. By empowering employees and setting tangible organizational goals, leaders can create real success in their companies. However, there’s more than meets the eye to this leadership structure.

Organizational leadership relies on a top-down approach. Leaders set the tone, direction, and goals for their team, all while involving team members in the process. In short, there are many moving parts that an organizational leader must control. To stay calm at the helm, leaders must know which factors are their top priorities.

Throughout a leadership career, you can expect an organization’s leadership structure to have these five essential components:²

1. Vision and strategy – A journey without vision and strategy is destined to fail. As navigators, leaders must guide their teams towards a common objective by sharing a visionary outlook that inspires employees, stakeholders, and customers alike. In organizational leadership, head positions must establish a clear mission and develop steps to achieve it.
2. Communication – Compared to smaller companies, businesses with organizational leadership structures may not have as much face-to-face communication between management and employees. That’s what makes exceptional communication skills a core tenant for organizational leaders. By articulating their vision and values clearly, leaders can motivate and build a team that follows an aligned mission.
3. Problem solving – In the sea of business, leaders are the captains who must solve critical problems to steer their team towards success. For organizational leaders, this includes  analyzing complex situations, evaluating risks and opportunities, and making informed decisions. By fostering a culture of critical thinking, leaders also empower their teams to tackle obstacles head-on, rather than refer them to another worker.
4. Team building – Organizational leaders may wield a lot of power, but they are nothing without their team. To build a strong team, leaders must create a collaborative, trustful, and respectful environment, allowing individuals to contribute their best work. Similarly, leaders must recognize and nurture talent, so that team members are encouraged to achieve remarkable results. 
5. Change management – No business reaches success without change. Organizational leaders are at the forefront of change management, ensuring their organizations can adapt, evolve, and thrive in dynamic environments. By both communicating the need for organizational change and addressing any transitional concerns, leaders can mitigate resistance and foster a sense of stability when teams take on new challenges.

Essential Skills of Organizational Leaders

In a business, all team members must possess sharp and applicable skills for their role—especially leaders. 

In organizational leadership, company leaders must wield skills that align, motivate, and unite all employees to reach goals, no matter how large the team. While every business requires specific traits and values in a leader, the essential organizational leadership skills in this role include:³

• Emotional intelligence
• Adaptability
• Strategic thinking
• Verbal and written communication
• Self-awareness
• Influential and motivational messaging
• Embracing innovation and growth
• Business acumen
• Ethical practices
• Big-picture or system-wide thinking 
• Self awareness

What is the Difference Between Organizational Leadership and Management?

Across many industries, the terms "leadership" and "management" are often used interchangeably—but they’re not the same. While both leadership and management are essential in an organization, they represent distinct approaches and purposes. 

Put simply, leaders set a company’s goal, and managers direct efforts toward that goal. For example, the leader of a pizza chain may have a company vision to sell only vegan pizzas. While the leader outlines the steps for this goal, the manager will supervise and encourage team members to bring the vision to life. 

Let's dive deeper into the differences between organizational leadership and management:⁴ 

• Proximity – Typically, organizational leaders will only interact with those directly under their supervision (i.e., managers). They may not personally interact at all with employees that they encourage and direct. In contrast, managers often work closely with every team member that they supervise. 
• Scale – Organizational leaders are the all-seeing eyes of a company. They must keep tabs on multiple teams, managers, and departments. Meanwhile, managers usually oversee a singular team or department.
• Direction – Where leadership changes, management stabilizes. An organizational leader must decide when to challenge the status quo and embrace new opportunities, inspiring innovation and transition. Management, on the other hand, provides stability by establishing structures, processes, and systems, overall minimizing risk. 

Why is Organizational Leadership Important?

Organizational leadership is not just a buzzword or trend—it is a critical approach that can drive success. This management style is particularly useful for larger businesses, pulling together all working parts under a unified leader. 

Effective leadership has the power to transform individuals, teams, and entire organizations. In fact, up to 70% of an employee’s work environment perception is based on the actions of management and leaders.⁵ Let's explore the strengths and benefits of organizational leadership in a business:

• Employee satisfaction – If team members are uninspired, then they will not want to put in the extra work needed to succeed—and their company will suffer. Organizational leadership can inspire team members by communicating a vision and rewarding employees for their work. In fact, one study showed that inspirational leadership positively influenced the happiness of employees at work.⁶
• Employee trust – When organizational leaders embrace innovation and opportunity, employees trust in their work. In one study, employees who viewed company leadership as “cultivating a growth mindset” showed greater trust and commitment in their company.⁷
• Productivity – Effective leadership is the catalyst for building high-performing teams. Leaders understand the strengths and weaknesses of individuals, leveraging their talents to create synergistic teams. By admonishing an employee’s strengths and providing opportunities for growth, leadership can boost the productivity of teams to achieve exceptional results. 
• Business performance – Organizational leadership allows companies to develop a clear purpose and vision. This is more than just motivational for employees—it also drives company success. Onte study found that purpose-driven companies grew by 1,618% over 17 years, far more than the S&P 500 average of 118% over the same time.  

Why Should You Pursue Organizational Leadership?

If striking inspiration and setting common goals are your top skills, then organizational leadership might be your calling. This field is not only a rewarding pursuit but also an opportunistic career path, opening the door to a variety of roles and industries.

Why is organizational leadership such a valuable topic? In short, it teaches skills that are highly transferable and versatile. From the private sector to nonprofit institutions, studying organizational leadership could lead to any of these careers:

• Chief executive officer
• Chief operating officer
• Executive director
• Operations manager
• Sales manager
• Human resources manager
• Project manager
• Logistics coordinator
• Educational principal
• Management consultant

How Can You Pursue Organizational Management?

Ready to inspire, encourage, and navigate a team through the rocky waters of business? Then you’ll need to start with your education.

Is organizational leadership a good degree? While not every executive or head manager went to business school, they typically have a relevant educational degree for an organizational leadership role. Depending on your personal history and professional goals, you may need any of the following degrees:⁹

• Bachelor’s degree in organizational leadership – These four-year programs lay the foundation for any upper-management leadership role. A bachelor’s degree in organizational leadership provides a comprehensive understanding of leadership theories, organizational behavior, strategic planning, team dynamics, and communication skills. Typically, students enter entry-level leadership positions with this degree.
• Master's degree in organizational leadership – For advanced knowledge and access to higher-level organizational leadership roles, a master's degree is an excellent option. These two-year or three-year programs delve deeper into leadership theories, strategic management, and business ethics, often incorporating practical components such as case studies, and research projects. 
• Master's degree in business administration (MBA) – A popular organizational leadership degree for a variety of business careers, an MBA provides a comprehensive understanding of business and leadership.  Students often can pursue a concentration in organizational leadership within this degree, developing advanced skills in organizational success, company growth, and project management.
• Doctoral degree in leadership – If you seek a research or academic position in the leadership sphere, then a doctoral degree in leadership may suit your needs. Overall, these programs are designed to develop scholars and experts in the field of organizational leadership. In particular, a PhD in leadership requires students to conduct in-depth research, advanced coursework, and the completion of a dissertation. 

Find Your Educational Path with Alliant International University

From finance to film production, organizational leadership is a powerful tool to drive success across industries. If you aspire to inspire a team, then this field may be worth your pursuit. And to start your journey, Alliant is here to give you the right tools.

At Alliant International University, we are committed to providing a transformative educational experience to the leaders of tomorrow. Our PhD in Leadership combines intensive courses and expert faculty from two schools: the California School of Management and Leadership (CSML) and the California School of Professional Psychology (CSPP). Through a comprehensive curriculum, you can answer your most crucial question—what kind of leader do you want to be? 

Ready to build your robust leadership skills and unique style? Learn more about our online PhD Leadership Program today.

---

Sources:

1. Reiland, Mikeie. "Organizational Leadership: Everything You Need To Know." Forbes Advisor. June 9, 2023. https://www.forbes.com/advisor/education/organizational-leadership/. Accessed June 20, 2023.
2. Indeed Editorial Team. "Learn About Organizational Leadership and Its Components" Indeed. February 23, 2023. https://www.indeed.com/career-advice/career-development/organizational-…. Accessed June 20, 2023. 
3. Barari, Anwesha. "What is Organizational Leadership and Why Should We Aim for It." Emeritus Online Courses. January 24, 2023. https://emeritus.org/blog/leadership-what-is-organizational-leadership/.  Accessed June 20, 2023. 
4. Nayar, Vineet. "Three Differences Between Managers and Leaders." Harvard Business Review. August 2, 2013. https://hbr.org/2013/08/tests-of-a-leadership-transiti. Accessed June 20, 2023. 
5. Tenney, Matt. "The Benefits of Leadership." Business Leadership Today. June 5, 2023. https://businessleadershiptoday.com/what-are-the-benefits-of-leadership/.  Accessed June 20, 2023. 
6. Salas-Valinna, Andres, et.al. “The human side of leadership: Inspirational leadership effects on follower characteristics and happiness at work (HAW)”. Journal of Business Research—ScienceDirect. February, 2020. https://www.sciencedirect.com/science/article/abs/pii/S0148296318305253. Accessed June 20, 2023. 
7. Chatman, Jennifer, et. al. “Organizational Mindsets Predict Cultural Norms and Employee Trust and Commitment”. July 09, 2018. https://journals.aom.org/doi/abs/10.5465/AMBPP.2018.15049abstract. Accessed June 20, 2023. 
8. Carucci, Ron, et. al. "How Executive Teams Shape a Company’s Purpose." Harvard Business Review. November 3, 2022. https://hbr.org/2022/11/how-executive-teams-shape-a-companys-purpose. Accessed June 20, 2023. 
9. Reiland, Mikeie. "Organizational Leadership: Everything You Need To Know." Forbes Advisor. June 9, 2023. https://www.forbes.com/advisor/education/organizational-leadership/. Accessed June 20, 2023.