From the meaning, characteristics and difference between leadership and management, we can understand how leadership is important for an organization. We can list such importance of leadership as follows:
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1. It Improves Motivation and Morale of Employees:
A successful leader influences the behaviour of an individual, which enhances the involvement of individual employee to work.
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By creating confidence in employees and sustaining their enthusiasm and involvement in achieving organizational goals, it enhances the motivation and morale of employees.
Even in a situation of crisis in an organization (viz., when an organization faces a bad phase in terms of profitability due to market slowdown or other reasons), a leader can sustain the high level of commitment and motivation from employees, which may ultimately help an organization to turn around. That is why good leaders are considered as turnaround agents in an organization.
2. It Leads to Higher Performance:
Leadership pulls the group to strive for results, i.e., achieving organizational goals. With the increased level of commitment and motivation, a good leader, therefore, leads to higher performance of employees. Higher performance leads to increased productivity, which results to increased profitability, even in a competitive market.
3. It Is an Aid to Authority:
Leadership is a process of influencing others. The mere use of authority by managers may not lead to results. However, when managerial authority is enriched with good leadership, employees start cooperating. Therefore, the formal exercising of authority may not result to success. Authority with leadership brings success to the organization.
4. It Determines Organizational Success:
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In the process of unification of group efforts to achieve organizational goals, the leadership enhances organizational effectiveness. Good manager alone cannot achieve this.
5. It Helps to Respond to Change:
Organizations today need to respond to changes quickly. A change in the technology, process, methods, plans (including strategic plans) always encounter resistance from people working in organizations. Leadership can play a great role in implementing change in organizations by creating a conducive environment. People follow leaders; they like to emulate the examples set by leaders, which, therefore, makes the change process smooth and successful.
6. It Inculcates Values in Organization:
A value-based organization gets increased commitment and loyalty from employees. A good leader being inspirational also successfully percolates human values, which shape the attitude of the employees towards work.