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Reviewed by Sweta | Updated on Jun 10, 2021



Leadership, in a commercial sense, refers to the managerial and strategic team of the business. The management of an organisation sets the goals, plans the duration, and takes decisions to initiate and implement such other managerial decisions. The quality of the leadership team inspires the organisation to achieve and grow.

Understanding Leadership

The leadership sets the culture, practices, and workflow in the organisation. The optimism and energy demonstrated by the leadership set an example to the workforce in the organisation. The value of leadership cannot be measured in quantitative terms but understood in the quality of deliverables from the organisation and the goodwill of the organisation.

Leadership sets the strategy for achieving the goals of the organisation. It understands the competition, consumer requirements, and the gaps in the availability of resources for designing the product or service. Individuals, who are part of the leadership team, are designated as Managing Director (MD), CEO (Chief Executive Officer), CFO (Chief Financial Officer) and COO (Chief Operating Officer).

The employees of an organisation look forward to the leaders for the goals, guidance, and progress. Middle-level management facilitates mentoring and guiding the workforce towards the broad goals of the organisation. The workforce looks up to the management for encouragement to bring in new ideas and solutions for the organisation.

Leadership is associated with the responsibility and accountability to third parties, such as customers, vendors, banks, and investors. The management of the company can be held responsible for the actions of their employees and accountable for payment of dues to banks, submission of annual accounts to investors, and more.


Leadership requires people with vision, effective and clear communication, and empathy and guidance to lead the organisation. Leaders should have the ability to understand the trends in business, adapt to change in economic conditions, knowledge of competition, and should be able to take risks. The progress of an organisation shows how well the leadership team co-ordinates with the middle and lower management.

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