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Monday, April 25, 2011

Modern Management Styles: What Works | THE FOUNDERS DEN

Depending on the nature of the business, some thought must be given when picking an appropriate management style. The way a leader commands his subordinates is often the difference between a successful business and a miserable failure. There are four main management styles.

Democratic Management Style

This is typically the most popular management style. The staff members have full permission to make decisions. Because the manager gives a certain amount of authority to his staff, they are greatly responsible for completing the projects given to them. They will utilize their own heads and will follow their own work ethics.

There are several advantages to a democratic management style. Subordinates feel trusted and this trust is often very motivating because it makes the subordinate feel like an important part of the team. People usually function better when they feel in control of their circumstances so even though the individual may actually have more responsibility than before, he will work even harder to earn the trust of his teammates and the person who gave him the trust.

Democratic management styles can make the decision making process slow. Because everyone must be consulted when making a decision, workers may not always reach a common understanding. If the subordinates are not experienced or skilled in what they do, it can be a serious mistake to give them authority. Some workers may even slack off because other members of the team can do much of the work for them.

Autocratic Management Style

An autocratic manager gives orders to the staff and makes decisions by himself without consulting anyone. He is in total and complete control. Autocratic managers are divided into two types: directive and permissive. A directive autocrat supervises his workers closely and a permissive autocrat gives them some freedom when doing their work.

The main advantage of this management style is that decisions are very quick. This method is extremely effective when the subordinates are not very experienced or skilled. Decisions are quick because staff are not consulted and work is usually completed on time.

However, this type of management style can create a master-slave dynamic between workers and managers. This kind of dynamic can be very demotivating for employees as they feel that they are just cogs in a machine and that managers don’t care about them. There can be a significant lack of communication when employing this management style.

Paternalistic Management style

Essentially this is the same as the autocratic style except that the manager will receive the opinions of the staff and will explain the reasoning of his actions. However, the manager has full authority and will always make the final decision. Managers essentially act as fathers in the paternalistic system and they care about the happiness and well-being of their subordinates.

Decisions are reached fairly quickly, though not as quickly as in an autocratic management style. This style is very useful when managers want to apply an autocratic style, but cannot due to the risk of subordinates losing motivation and loyalty. There is also usually decent communication on businesses that operate using this model, although it is still usually a top to bottom kind of communication.

Laissez Faire Management style

Tasks and deadlines are given and the staff total freedom to complete projects as they wish. The manager’s involvement is limited as all he does is usually answer questions and teach subordinates what they may need to know to complete their task.

Communication is excellent in this style as both managers and workers feel that they are on the same level. There is a great sense of teamwork and responsibility which motivates individuals and mutual trust is often established. This is a very modern style and is commonly only successful based on the type of business and the actual people involved. Only those with a proven track record in their field can pull this off. Other managers have to establish credibility, which causes turmoil in the Laissez Faire style traditionally.

There is always the risk that the minimal amount of management could make the staff not take the project seriously or that the lack of input can cause staff members to feel lost.

Which Management Style Works Best?

There is no right answer that can be applied in all situations. An analysis of the situation Is required before deciding which style to employ and no single style is superior in all situations. Sometimes when tasks must be completed at all costs and the very fate of the company is at stake, applying an autocratic style can literally save the company from going under.

Harvard Business School Professor Scott Snook claims that what we believe about human nature influences our leadership style. He says that if the belief of people being fundamentally self-motivated is present in the managers, then the leadership style will be one way. Empowering workers and getting obstacles out of the way will be the most important thing, as well as setting ambitious goals while maintaining standards. If a great percentage of managers believe that people won’t do anything unless they are being watched, then they will use a system of rewards and punishments and tight supervision will ensue. Leadership will be controlling and social distance becomes amplified.

Productivity in hostile environments tends to be low. Regardless of which management style applies to the situation at hand, it must be remembered that people are human beings and that believing in them brings out the best results.

By Eric Rice

LWI and The Founders Den

The Founders Den

The Founders Den is a collaborative group of successful entrepreneurs, attorneys, investors, tax professionals, and advisors who are committed to sharing their knowledge, expertise, and resources to improve the environment for rising startup businesses. The Founders Den Members come from a variety of professional backgrounds and business sectors, and are focused on leveraging their wisdom and experience to offer advice to young companies, and in select cases the Den serves as an incubator for promising ventures who are in need of support to turn their plans into reality.

Eric Rice is a successful entrepreneur and has built a number of businesses in sectors ranging from financial services to gaming. He is currently the CEO of LWI, a non-traditional marketing firm specializing in social media and online branding.

Eric Rice

Kevin Harrington

David Mickelson

Martin Waters

Eric Donsky

Rick Shepherd
Owner, Principal Consultant

Frederick Gaston
Business Litigator
Gaston & Gaston, APLC

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1 comment:

chandra said...

Though things have changed a lot these days, but few management strategic still remains the same! anyways thanks for the stuff!
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