Why Nurses Need Solid Business Knowledge in Healthcare

Nurse leaders can prepare themselves either before their position or during it — for one thing, they can start to feel comfortable in their roles by choosing their leadership style

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Effective nurse leaders directly impact the nursing industry. Nurse leadership requires unique traits, experience, and skills. An influential leader can affect the team's job performance and job satisfaction. Lack of leadership training can place a nurse leader in a vulnerable position, causing companies to experience:

  • Financial losses
  • Frequent employee turnover 
  • Low performance
  • Poor patient outcomes 

Nurse managers and leaders who understand their leadership style can lead more effectively. By choosing an authentic leadership style, nurse leaders can become powerhouses and lead a team, unit, or organization successfully. 

Five nursing leadership and management styles 

Being self-aware and having an idea of how you want to lead can help when choosing a leadership style. Five popular leadership styles for nurse leaders are:

  • Authoritarian leadership
  • Participative leadership
  • Delegative leadership
  • Transactional leadership
  • Transformational leadership

Authoritarian nurse leaders

Authoritarian leaders, also known as autocratic leaders, lead with strong control over their team. They want little to no input from their team. They are known to lead with absolute dominance. 

Pros of an authoritarian leadership style include:

Cons include:

  • Lack of creativity 
  • Ruling with an iron fist 
  • Employee turnover 

Nurses who manage with an authoritarian leadership style are usually unpopular. But they do have their place in some nursing settings. Authoritarian leaders excel in highly stressful areas. These include:

  • Emergency rooms
  • Operating rooms
  • Trauma centers 
  • Intensive care units 
  • Labor and delivery

Participative nurse leaders

A participative leadership style is fair and democratic. Nurse leaders who adopt this style motivate team members and involve them in the decision-making. They guide and work well with others. 

Pros of a participative nurse leadership style include:

  • Encouraging team members to participate in ideas 
  • Sharing information freely
  • Knowing when it's necessary to step back 

Cons include:

  • Highly apologetic
  • Often failing at communicating properly
  • Not excelling when left to complete a task independently

Nurses who lead with a participative leadership style may be labeled too compromising, but they make the final decision. They have a reputation for working well with teams. Participative leaders work well in:

  • Emergency rooms
  • Medical-surgical floors
  • Long-term care units
  • Pediatrics 

Delegative nurse leaders

A delegative leader, also known as a laissez-faire leader, delegates tasks. This leadership style allows their team to make their own decisions without help or direction from the leader. They encourage creativity but don't provide guidance.

Pros of the delegative nurse leadership style include:

  • Encouraging individuality 
  • Encouraging innovation 
  • Creating a positive atmosphere 

Cons include:

  • Lack of direction for teams
  • Risk of low-performing teams
  • Hands-off approach 

Nurses who lead with a delegative leadership style may come across as unmotivating. Their leadership style works best in environments where team members already have experience. Nurses with this leadership style can work in:

  • Hospice care
  • Homecare
  • Outpatient clinical settings

Transactional nurse leaders

Nurses with a transactional leadership style create deals or transactions with their team. As a result, their team members are more productive. Transactional leaders manage by creating change and use rewards or punishment to obtain this change. They are preoccupied with following routines and procedures. 

Pros of a transactional nurse leadership style include:

  • Achievable goals
  • Employees can choose a reward system
  • Motivating and encouraging

Cons include:

  • Lack of empathy 
  • Focus more on mistakes 
  • Having more followers than leaders

Nurses who lead with a transactional leadership style can work well in:

  • Hematology and oncology floors
  • Outpatient clinics
  • Same-day surgical clinics

Transformational nurse leaders

A nurse with a transformational leadership style has a vision in mind and sets out to accomplish that vision. They inspire their team and motivate them to reach the organization's goal and achieve their personal goal. They promote ideas and inclusivity. 

Pros of the transformational nurse leadership style include:

  • Gaining staff respect
  • Great communicators
  • Increased productivity

Cons include:

  • Expectations may be too high
  • Can come across as deceptive
  • May deviate from rules and regulations

Transformational leaders in healthcare are noted to be the most favorable leadership style. They improve productivity and have high job satisfaction rates. Nurses who lead in this type of style can work in any setting. They really excel at:

  • Hospitals
  • Start-ups
  • Entrepreneurial nursing jobs

Being an effective nurse leader

Studies have shown that effective healthcare leadership is the relationship between the leader and their team rather than the actual behavior of the leader. The behaviors of good leaders are situational rather than permanent. However, it is still important to adapt to one leadership style or pick a few traits from the other styles. This helps give you direction and keep you organized when leading a nursing team.

No matter what your leadership style is, effective leaders possess similar qualities.

  • They are self-aware.
  • They are emotionally and culturally intelligent.
  • They are Intentional with their work.
  • They promote better patient outcomes.
  • They communicate effectively. 
  • They build community.
  • They show empathy.

Ineffective nurse leaders 

Ineffective leaders may or may not be aware of their behavior when they are in nursing leadership positions. They may not have the mission and vision of the company in mind when they are managing their teams. Ineffective leaders usually are unfavorable with employees and can cost organizations loss of money and employees. Qualities of ineffective leaders include:

  • Bullying
  • Favoritism
  • Being punitive with team members 

Think of nurse leaders that have come before you. How did you like their leadership style? How did they behave? Were they effective? When choosing a leadership style, think of the setting and who is on your nursing team. This will help you adapt to the best leadership style for you.

It’s sometimes said that leaders are born, not made — but leaders can be taught. They can learn from their mistakes and reinvent themselves. It's essential to keep your promises, admit to your mistakes, make your goals clear, and hold your team accountable.