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Leadership Theories In Retail Environment


The leadership approaches that managers take in running retail organizations influence the culture of the employees and the loyalty of the customers. The way the leader applies his personality and temperament influences the reactions of the employees and how they serve the customers in the retail context. Retail leaders focus on managing people and setting task directions to ensure efficient and effective service to customers. A task-oriented leader is likely to succeed in a retail setting by getting the employees complete their tasks with effectiveness and efficiency. However, such a leader should be careful not to concentrate too much on what employees do and abandon the views of the customers. An effective leader should also consider the complaints of the employees and involve them in decisions that relate to customer problems.

Successful leaders tend to find a balance between their goals and the welfare of the employees. The task-direction that these leaders take involves the contribution of employees in decision-making. Leaders that show that they care for their employees find time to talk to them since they are in contact with the customers (Janhonen and Lindstrom, 2015). However, an overly-relational leader may lose authority and control over the employees. When retail employees are happy, they tend to find balance between serving the customers and engaging in other duties that relate to their work. Based on these considerations, retail leadership applies different dimensions of leadership concepts that aim at helping the firms succeed in the industry. In the Canadian retail industry, leaders apply transformational, contingency and behavioral concepts as they try to solve the emerging retail challenges in the country.

Leadership Concepts/ Theories and Dimensions in Retail Context

Retail leaders apply trait theories of leadership in that they use their characters to influence the employees to be effective. Leaders that adhere to the trait theories tend to apply the pioneering dimension of leadership in their daily activities (Parris and Peachey, 2013). For instance, a retail leader can use his charisma to lead the employees towards ensuring efficiency in service delivery in the organization. A pioneering leader leads with examples and aims at influencing the workers to emulate his character for them to succeed (Hunter et al., 2013). Retail leaders can use their personality traits to influence the workers and customers. The leaders tend to impact their beliefs and core values on the employees as a way of motivating them to emulate their traits and become effective in offering services to the customers in the retail context. For instance, a retail leader can act as an example by being dynamic in the way he addresses challenges that come up in the daily operations of the organization. Such a leader can interact with the employees and show them how to find solutions to problems within a short time.

Leaders that adhere to the trait concepts of leadership tend to be interactive and relational. They engage in close interactions with employees to ensure that they help them acquire their traits (Hunter at al., 2013). For instance, a retail leader that is an adherent of trait leadership concepts strives to be quick in reacting to challenging situations and encourages workers to be like him when faced with customer problems that pose a dilemma. According to Parris and Peachy (2013), relational retail leaders take actions that aim at influencing the behavior of the workers. The leaders can influence employees by proposing different solutions to a challenge such as delivery of a wrong consignment to customers. The dynamism that the leader portrays to the workers can influence their personality and values that they apply in decision-making and thereby become effective.

In the retail context, leaders can apply the behavioral theory of leadership. Leaders that apply behavioral concepts in leadership tend to follow the commanding and affirming dimensions of leadership. Such leaders believe that their behaviors can affect the efficiency of the employees (Arnold et al., 2009). Retail leaders can adhere to the behavioral concepts of leadership by being task-oriented. According to Arnold at al. (2009), the focus of such leaders is what employees do to affect the task direction of the organization. In some cases, task-oriented retail leaders tend to forget managing their employees and give all their attention to the tasks that the subordinates should undertake to deliver services to the customers (Janhonen and Lindstrom, 2015). For instance, a retail leader can be more focused on the task of delivering to the distance clients and end up forgetting that employees get tired. Although such leaders can succeed and oversee workers completing their tasks with effectiveness, failure to consider employee motivation can affect the future effectiveness.

Interestingly, retail leaders can be autocratic in their relationship with the employees. In such cases, the leaders command the employees to implement decisions even without getting their views. According to Janhonen and Lindstrom (2015), task-oriented leaders become authoritarian when they focus on meeting the customer demands even when their workforce is not enough to deliver all the services. Leaders in charge of high-volume stores may behave in a way that shows little effort to the people that they work with since they focus on customer complaints and profits. Although the autocratic leadership approach might bring high turnover to the organization, it may lower the employee motivation and make them less productive (Hunter et al., 2013). Thus, retail leaders can succeed if they apply democratic approach of leadership and allow the employees to have a say in the decision-making. Leaders that are democratic tend to be approachable, positive and friendly and always strive to understand the challenges of the employees that may affect their relationship with customers in the retail environment.

The contingency approach of leadership can succeed in a retail context. Contingency approaches apply the leader’s traits and situational factors in making decisions. Leaders that apply contingency theories are inclusive and diplomatic (Parris and Peachy, 2013). Using inclusivity and diplomacy as leadership dimensions, contingency leadership strives to balance between tasks and management of employees. In a retail context, a leader can apply the path-goal model as part of contingency leadership. In such a case, the leader explains to the employees how they should package the services to win customer loyalty. Also, the leader can give rewards to employees if they succeed in meeting the sales goals. Besides, contingency theory is applied in moderately favorable conditions when employees and customers agree on the mode of service delivery. In a favorable condition where the manager knows that the retail organization meets the customer needs, the leader can try to be relationship-oriented. In building relationships with the employees, the leader can build a team culture where the workers operate in teams to ensure effective service delivery.

Based on the inclusive dimension, retail leaders can apply the Hersey-Blanchard situational approach to manage workers. For instance, the leader can respond differently to the employees based on the time they have spent in a store. Leaders that apply this model assess the level of maturity of the employees based on how long they have been working in the organization (Hunter et al., 2013). When dealing with new employees, the leader should tell them how they should respond to customer requests. The leader can also tell the new entrants when to report customer complaints.

The resolute dimension of transactional leadership theory is also applicable in the retail context. According to Van der Merwe and Verwey (2007), a resolute leader is expected to be rational and challenging. He recognizes the interdependence of the competencies of the employees and the other managers. Transactional leaders tend to distribute responsibilities among employees. For instance, in a retail context, such a leader can change the cashiers based on the nature of operations that take place in a day. In distributing responsibilities to cashiers, the leader considers their efficiency. Distribution of responsibilities among employees helps the leader to see what happens when some workers are in charge of some units in the firm. It also helps in encouraging adaptability and resilience among the workers. However, a transactional leader should try to give rewards to employees that accept to undertake activities that are outside their obligations.

Also, the energizing dimension of transformational leadership theory can succeed in a retail context when the leader is aware of self and others. A transformational retail leader engages in intellectual stimulation and motivates employees through idealized influence (Parris and Peachy, 2013). The leader knows what the firm needs and understands the perceptions and expectations of the subordinates. In a retail context, a transformational leader interacts with the employees at a personal level and helps them understand what they should do to enhance customer loyalty (Janhonen and Lindstrom, 2015). The leader encourages team-work among the employees to ensure that they feel motivated to move forward as a group and not individuals. For instance, when one employee is off, his team can pick up his tasks and perform effectively given the motivation that they receive from the transformational leader. Motivated retail employees treat customers with courtesy since they are treated similarly by their leaders. Such employees are not arrogant and they strive to respond to customer concerns and when they fail, they refer them to the managers.

Examples of Application of Leadership Concepts

In 2014, when I worked with Canadian Tire Corporation, I witnessed the application of behavioral, contingency and transformation leadership concepts. The following year, the company was rated one of the best-managed retailers in the country. Regarding behavioral leadership concept, the firm applied people-oriented dimension as a leadership approach as Janhonen and Lindstrom (2015) suggests. All the managers in charge of the Toronto store where I worked were charismatic and dynamic. They behaved as pioneers of the decisions that we were implementing. As a result, they influenced workers to emulate their core values and personality. They supported and we felt motivated to work hard to achieve the organization’s goals.

The contingency theory that Canadian Tire leaders applied involved the combination of task-oriented and people-centered leadership dimensions. Janhonen and Lindstrom (2015) suggests that firms should align their core values with leadership approaches. One of the core values of Canadian Tire is to meet the customer and employee needs. The leaders in charge of our activities were task-oriented in that they ensured we put efforts to serve the customers. For instance, I remember working overtime to achieve the firm’s objectives in one of the festive seasons. Also, our managers were people-oriented in that they developed bonds with us as employees. They encouraged us to stand in for our colleagues when they were out. Transformational leadership was seen in the way the leaders motivated us to form teams. Our team-oriented leaders were transformational in that they led us towards success. They gave us ideas that energized us to work hard. The need to meet customer expectations guided our relationships with our leaders.

The above leadership concepts influenced my perception of leader leadership. My experience at Canadian Tire influenced me to see leadership as a tool that leaders use to get work done. As Armstrong et al. (2017) suggest, I have learned that a leader should balance between tasks and the subordinates to be effective. Thus, I see leadership as a multitasking activity that one uses to see the success of the teams.

Challenges in Canadian Retail Sector

Shopper dissatisfaction is one of the leading challenges in the Canadian retail industry. Various retailers including Target have expressed their fears that customer dissatisfaction threatens their stay in the market. The concept of customer satisfaction relates to the organizational leadership in many aspects (Atluri Dietz and Henke, 2017). People-oriented leaders focus on building relationships with customers to ensure that they are satisfied. In the Canadian retail sector, the concern of customer satisfaction touches on the leadership dimensions that the firms use. To address the challenge, leaders in the Canadian retail sector need to follow the charismatic dimension of leadership where they act as champions of customer needs as Armstrong et al., (2017) points out. The leaders also need to change to become people-oriented and transformational to motivate and train their employees on the need to work towards customer satisfaction.

Another challenge facing the Canadian retail sector is the shift of retail sales to the online platforms. The growth of the digital space has seen transactions moving from face-to-face engagements to the online platforms where customers order and pay for the goods online. Although Canadian retailers are embracing the move to the digital space, they have been accused of laxity in shifting their retail sales to the online channels. The result of this laxity is the decline of sales. Therefore, as Atluri, Dietz and Henke (2017) suggest, addressing this challenge requires industry leaders to engage in contingency and transformational leadership approaches where they invest in the digital space and respond to challenges as they occur. In making such investments, Canadian retail firms should focus on the customer needs and build online platforms that help in accessing customer feedback.


The application of leadership theories and dimensions is evident in various retail environments across the world. Leaders in the retail industry apply behavioral and trait theories by showing charisma to their juniors. In this case, the leaders use the charisma and a leadership dimension. Retail leaders that are people-oriented and task-oriented apply contingency concepts of leadership. The task-oriented leaders strive to influence the employees to be effective. My experience at Canadian Tire where leaders applied transformational and behavioral leadership influenced my perception of leadership. I regard leadership as a role that requires multitasking where the leader balances between managing people and tasks. The Canadian retail industry is facing the challenge of customer dissatisfaction, and that calls for the leaders to try transformational leadership approaches to help the employees work in a way that meets the customer needs based on the Canadian buying habits.

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