There are many different management styles that you can follow when deciding what type of manager you’ll be. And depending on your specific business, you may benefit more from one type of management than another.
Any management style you choose will have to meet the four functions of management and allow you to develop your team effectively. And just as important as knowing the right management style is knowing how not to manage your employees.
Table of contents
What is a management style?
Management styles refer to how managers accomplish their goals, specifically when dealing with their employees. Your management style determines how you organize and prioritize tasks, how you delegate responsibilities and make decisions, and how you communicate with your employees.
Whichever management style you choose needs to facilitate the four functions of management. Those functions are:
- Planning: Planning tasks include setting goals, identifying obstacles, and optimizing strategy
- Organizing: Organizing means structuring your organization, assigning responsibilities, and distributing resources
- Leading: Leading tasks relate to providing a sense of purpose, delegating tasks, and motivating your employees
- Controlling: The controlling aspect of management refers to managing schedules, evaluating employee performance, and finding opportunities to upskill employees
Finding the right management style has many benefits to your business; with a Harvard Business Review study even attributing 30% of a business’s revenue to the style of its managers. Beyond helping you execute the four functions of management, a strong management style:
- Improves engagement: Clear expectations and adequately assigned resources (part of the control function of management) help employees feel supported and able to excel
- Improves culture: Different management styles can change the culture of a business in different ways, and it’s a manager’s job to create a positive environment
- Fosters communication: Communication is a cornerstone of management, and regular feedback to and from employees is central to a healthy business
- Retains talent: Disputes with or dislike of management is a massive driver of employee turnover, which continues to be a big problem for businesses
What are the most common management styles?
Every business has the same general goal – to remain profitable, meet production goals, and maintain a stable environment – but there are several ways managers accomplish this. Management styles evolve and new trends emerge regularly, but the most common ones remain widely used across business types. Here’s a summary of these different management styles.
Authoritative management is a top-down management style characterized by firm rules and the expectation that employees follow these rules without question. Authoritative managers tend to have low trust in employees, which leads to micromanagement.
Authoritative managers make decisions quickly and their expectations are clearly defined, but run the risk of alienating workers. The lack of a feedback in authoritative management also means change is slow.
This type of management is almost the opposite of the authoritative style. By treating employees as equals and giving them all a voice in decision-making, democratic management celebrates diversity of thought in a business and strengthens collaboration. Empowering employees to make meaningful decisions also increases morale.
Because more people are involved and because the manager has less absolute power, decisions are made more slowly, which can be an issue in time-sensitive situations.
Like a democratic management style, consultative management means sourcing opinions from employees to help you make decisions. But unlike democratic management, you as manager still have the final say.
Decisions can be slow as with democratic management, and since there is no guarantee the employee viewpoint is reflected, there’s potential to feel like managers are making empty gestures, in which case you would need to address these concerns.
Laissez-faire or “let it be”management is the most hands-off type of management. It’s characterized by high trust in employees, but also by low guidance. Managers still give constructive criticism where necessary, and are ultimately accountable for employee actions.
Laissez-faire management increases employee motivation and is great for self-managing workers, since it enables them to solve problems their way. But it also creates chaos and a lack of direction can be frustrating, especially to new hires. And having everyone doing their own thing isn’t necessarily going to lead to teamwork.
Transformational management is focused on developing employees and their skills. Instead of focusing on specific accomplishments, this management style emphasizes a shared company vision and values to bring out intrinsic motivation.
Transformational managers push employees to try different things and get out of their comfort zones, which can be positive but also lead to uncertainty and burnout. Transformational management also relies heavily on feedback and on the manager’s vision being shared.
Transactional management is based on rewards and punishments. Positive performance is rewarded while failing to meet an objective is punished. The idea is to provide a clear, top-down structure as with authoritative management, and to give explicit instructions that employees follow exactly.
While it is easy for employees to understand their roles in a transactional management system, transactional management ignores relationship building and work environment. Also, not all employees are motivated by the same rewards.
How do you choose a management style?
As already stated, the best management style for your business depends a lot on your specific needs. It also depends on your personality as a manager – some things just won’t feel natural. When you’re determining your management style, ask:
- What is your temperament?
- What personality traits do your workers share?
- What motivates your employees?
- What are your business’s goals?
- What sort of work is being done?
- What is the culture/values in your organization?
When you’re answering these questions, using an evaluation checklist helps you put your observations in written form, so you can refer back to them as needed. It’s also a good idea to redo this checklist regularly, so that you can see any changes in company conditions.
That’s because your management style has to reflect the business you are managing, so it won’t always stay the same. Understanding when to adapt is tricky but essential if you want to be successful in business management. It’s also common for your management style to shift when you’re dealing with a sudden organizational change.
That said, there is some consensus on which management styles are typically good and which are typically not good for a business. Management styles seen as positive include:
- Consultative management: Because of the democratic but still centralized nature of consultative management, employees remain motivated and listened to, while decisions can still be made relatively quickly. Consultative management works best when your employees are experts in their field.
- Democratic management: Employees in a democratic management system have as much power as managers to make decisions, which makes them quite influential and improves morale. The sense of trust and importance of diversity in democratic management often help to motivate better work.
- Transformational management: A similar sense of trust and confidence inspires employee satisfaction and loyalty, and investing in team development has long-term benefits for your organization. The Harvard Business Review found that employees working for transformational managers are generally happier.
Types of management generally seen as counterintuitive to organizations include:
- Authoritative management: Despite the speed of decisions and the clarity provided by a strict top-down structure, authoritative management is criticized for giving employees little to no autonomy and often relying on fear, shame, or guilt as motivators
- Laissez-faire management: Autonomy for employees is good, however a lack of guidance or explanations can very easily mean employees have no concept of a shared vision, which makes contributing to business goals more difficult
- Transactional management: The reliance on external rewards to motivate employees assumes that all employees want the same rewards, which is not the case. And external motivation has a time limit – eventually the rewards stop being worth it, and may even lower motivation if they are the only reason employees work.
Digital apps like Lumiform can help you decide on a management style. The best management style for a business depends a lot on the types of work employees have to do, and Lumiform makes it easy to download or create checklists so that employee tasks are clear. You can also use the inspection app to solicit employee feedback and evaluate employee performance, two things which will help you figure out if your management style helps or hinders the four functions of management.