This thesis deals with basic terms in the areas of management, business leadership and types of leadership. The functions of management have been defined, so as the terms related to it. The differences between a manager and a leader have been described, as well as the concept of a leader, along with his or her required skills and the ways in which they can affect both the followers and the co-workers. The differences between male and female leadership styles have been shown as well. Both classic and contemporary leadership style has been illustrated in detail, so as the characteristics of Generation Y. A quantitative research has been conducted by questionnaire on a suitable sample of 81 respondents belonging to Generation Y, namely undergraduate and graduate students. The main goal of this thesis has been to determine which leadership styles are preferred by Generation Y. Relevant data from scientific and professional literature has been used for both formulating a theoretical framework and for creating a short review of past research. It can be concluded that undergraduate part-time students and graduate students from VERN’ University of Applied Sciences, belonging to Generation Y, prefer two-way communication with employees, with the leader making decisions in cooperation with employees who support the leader, as well as the situations where the leader and employees work together as a unity, otherwise known as a democratic leadership style.