What is the type of organization where the decision-making authority lies with the top management?

Every team is unique and requires a different type of management style depending on the situation, requirements, and culture. Therefore, a manager should understand each management style in depth to make them better and more efficient.

Social psychologist Douglas McGregor developed the first management style theory in the sixties.

What is a Management Style?

Definition: A management style is a way of working where a manager organizes, plans, delegates, make decisions, and manages the team. Each manager has a different style of management depending on the organization, team behavior, industry, culture, management level, the operating country, etc.

Effective managers adjust their management style to fit organizational goals, team requirements, and targets.

The 6 Types of Management Styles

A management style can be of the following type:

1. Authoritarian
2. Democratic
3. Visionary
4. Laissez-faire
5. Transactional
6. Persuasive

#1. Authoritarian

In an authoritarian or autocratic management style, managers take full control and direct employees to achieve objectives. An authoritarian manager works towards an organizational goal and ensures that each employee works towards the same, without paying much attention to employees’ career development.

Authoritative managers assert strong authority over decisions and employees and have complete control over decision-making, defining roles, reporting structure, and responsibilities. They care less about employee growth and expect total obedience.

An effective authoritarian leader is focused on the organization’s goals. These managers work best in traditional cultures with less experienced employees. 

#2. Democratic

A democratic or collaborative manager is the opposite of an authoritarian. In this management style, managers care about employees’ opinions. These managers encourage employee participation and welcome a difference in opinion. 

The goal of democratic managers is to grow the company and employees. These managers always seek suggestions and potential solutions to solve organizational issues. 

The final decision making authority still lies with the manager in this management style. However, democratic managers consider the opinions of their team members. 

A democratic management style works best in dynamic organizations where team members are experienced and skilled and appreciate group participation. 

#3. Visionary

A visionary or charismatic manager can convince their team to focus on and believe in a purpose. A visionary manager conveys the organization’s vision and inspires the team to work hard to achieve it. Such managers believe in letting their teams take on routine work and interfere in prominent decisions. 

The visionary management style involves motivating, encouraging, inspiring, aligning the team with the bigger goal and providing them with the support they need throughout the process. 

Visionary managers allow their team members to work on their terms, provided they are productive and working towards the end goal. However, managers check on the team members regularly to see if they are facing any issues.

This type of management style is best used with team members who like to be self-driven and are motivated through autonomy or authority. When team members reach a top management level, they like to complete tasks independently with minimal interference, and this is where a visionary manager is the right fit.

#4. Laissez-faire

The laissez-faire management style places importance on employee freedom. As the term means ‘let do’ in English, this is precisely what laissez-faire managers practice. They let their team members do what they think is best. Managers don’t interfere in this management style, but the team must meet certain expectations. Here, decision making power rests with the employees. However, they can seek the manager’s help whenever needed. 

This management style is best used with self-driven and self-motivated teams that need minimal guidance. Such team members are experts in their fields and do not require managers’ guidance.

#5. Transactional

The transactional management style uses rewards, bonuses, and tangible and intangible incentives to motivate team members to perform better. This management style also includes punishment like warnings, pay cuts, and notices when employees do not perform well. Transactional managers focus on bringing out the optimal performance of the team to reach organizational goals. 

This management style can be used for projects or teams with strict deadlines and is only motivated by rewards.  

#6. Persuasive

A persuasive management style refers to managers inhabiting strong control, centralized reporting, and decisions based on both the manager and team’s opinions. It is like a diluted version of the autocratic style since persuasive managers encourage questions, respond to their team members, and guide them towards better performance. 

In this management style, the manager discusses issues with team members to reach a decision. Employees are motivated to perform better through persuasive methods like creating urgency, connecting emotionally, and providing evidence to support the project’s progress instead of using the reward and punishment system. 

Managers use this style of management when they are experienced and skilled, and there is clear communication between the manager and the team. The manager can persuade the employees to enhance their productivity and build their team’s confidence.

Examples of Management Styles

John is a manager of a team of ten members. We will discuss all the six management styles within this example, with John using a hybrid approach to use the different management styles in different situations. 

The team is assigned a project to be completed in the next four months. Two members in this team are top management level employees, six are middle-level employees, and two are low-level employees. 

In the beginning, John follows the autocratic style and assigns duties to each team member. He conducts a session for the six middle level employees and two low-level employees. John informs them of the organizational goals and expectations from the team.

Moving forward, he uses the democratic approach to delegate the work authority and responsibility to the two top management level employees and assigns them four employees each. John has shifted his authority to the two top level employees who will manage four employees and have the power to make decisions. 

Next, the two top level employees conduct separate meetings with their subordinates and communicate their vision to complete the project. They motivate their team members by inspiring them to work better and giving them some authority at the individual level for minor tasks. 

John follows a laissez-faire approach with the two top level management employees as all three belong to the same managerial position. John trusts the expertise of both employees and allows them to act as they deem fit, providing them complete freedom. 

Coming back to the two employees at the top management level, they use the transactional management approach with their team members and offer them rewards based on their performance. Increments and bonuses are promised to employees who perform as expected, and warnings are sent to the under-performers. 

Lastly, John uses a persuasive style of management on both top level employees, wherein he ensures that the top authority lies with him and that the work is completed as per expectations. John considers the opinion of the two top level employees and includes them in the decision making process. 

The two top level management employees follow the same methodology with their team members. They use the persuasive style of management by including their team members in the decision making process and encouraging questions.

How Can a Manager Choose the Ideal Management Style? 

#1. Analyze the Style That Suits Best

Some managers are born with an inbuilt management style that suits their traits. For example, some leaders are better at delegating work and trusting their employees, making them natural democratic leaders. On the other hand, some leaders have difficulty transferring responsibility to their team members and prefer working according to their own rules, making them natural authoritarian leaders. 

Identifying the manager’s natural management style is important to understand the style best suited for them in managing the team. 

#2. Identify Team Requirements

Some teams are naturally self-driven and need the freedom to work effectively. A mix of democratic and laissez-faire management styles can be used in this case. After identifying the management style, managers should analyze their team’s behavior and the type of motivation the team requires to be productive. 

If the teams require constant motivation and push, a hybrid of a visionary and transactional style of management can be used.

#3. Find a Balance Between Manager and Team Personality

After analyzing team requirements and the manager’s natural style of management, managers find the balance between the requirements and their management style. Managers should use the management style according to the team’s requirements as it will affect their performance.  

It is essential to use the style that suits the manager best so they can guide the team naturally yet effectively. 

#4. Define a Corporate Culture

Corporate culture is the combined belief and behavior between employees and management. The corporate structure impacts the management style that best fits a team, as it helps managers analyze the most suitable management style at that time. 

For example, during major organizational structural changes, the visionary style helps managers keep the team focused yet stress-free. However, if the corporate structure suggests that the team is highly demotivated, transactional and persuasive styles can help to positively impact their productivity. 

#5. Implement the Management Style 

After identifying the right management style for the manager and their team, the last step is implementing it. If a single approach is best suited, apply the approach to enhance the team’s efficiency. However, if more than one management style is necessary, apply the approaches in a hybrid manner, which means using the best type of management style based on the situation.

Conclusion 

Several management styles help managers become better leaders and enhance their team’s productivity. Different teams and different situations require a different approach for a successfully motivated team. Managers should identify the management style that suits them and their teams the best if they want to become successful leaders, encouraging organizational growth and employee development.