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6 min read
By Nick Bell

What are the different management styles?


Business

Not every company is managed the same way and these different management styles can greatly impact success depending on the company and its employees. Some CEOs are very hands-on while others are completely hands-off but both have found success in their own environments.

For this article, we will go through 5 different management styles and spell out all the benefits and potential shortcomings of them. All of these styles have found success in many different companies but have shown failure in the wrong settings as well.

PACESETTING MANAGEMENT

This management style is the “lead by example” style of management. This is where the leader steps in and works alongside their employees or management team and performs the daily tasks everyone else does.

Pacesetting management works very well in a competitive work environment that encourages employees to achieve the standard set by the leader of the company. Also, this can greatly help the image of the management team.

When employees see their superiors performing the same tasks as them, it usually shows them how to efficiently do it and motivates them to improve their work so they can match their standards.
However, this can lead to burnout if management expects too much of the employees. If you are performing the same tasks as employees, that means they will have to work harder to achieve your pace.
AUTHORITARIAN MANAGEMENT
This style of management centers around one person who is the primary decision maker for the company and has the final say in every decision. While it is fine to have a clear hierarchy of managers and decision makers, there should be no question on who is making the primary decisions.

Authoritarian management can certainly be effective in environments that have:

  • New or inexperienced employees
  • A well-defined hierarchy
  • A competent leader

Because these center around the decisions of the person at the top, the confidence that their team has and how well they can make decisions is what will determine their success.

Of course, if this authoritarian style is taken too far, it can lead to spectacular failure and a company that has no future. For example, if there is a poor decision or setback all of it falls on the head of the company.

One hard setback can easily make employees lose confidence in their leader and wonder whether their work is really going to mean something in this company. Plus, if there is not a concrete way to pass down leadership, once the leader of the company goes the authoritarian management style may become a thing of the past.

TRANSACTIONAL MANAGEMENT

Transactional management is a style that relies upon monetary rewards to motivate employee performance and generate more interest in achieving the company’s goals. Some ways transactional managers offer these incentives are through:

  • Bonuses
  • Incentives
  • Stock options

This management style can be highly effective because extra money will always motivate employees to work harder. At the end of the day, you go to work to make money and if you can get a little extra, most people will be more than willing to take it the extra mile.

Although, this management style is very risky and is usually only effective for short-term goals. If this style goes on for a while, employees will start expecting these monetary rewards and it can also land you in some hot water by giving away all the profits as bonuses.

VISIONARY MANAGEMENT

This style of management can be similar to authoritarian management but is much more hands-on than the latter. A visionary management style has a leader or leaders that directly relay the goals of the company and try to invoke motivation from employees through their charisma and overall mission.

This type of management works well for motivating dedicated employees and can get a whole team working towards the same goal easily. Plus, it makes leaders much more approachable and well-liked than in an authoritarian style.

On the other hand this type of leadership can lack attention to detail. While your end-goal is made abundantly clear, how to get there is usually left up to the management team and employees. Unless they have a concrete plan to reach these goals, they may not achieve them in the end.

This can quickly lead to bitterness between employees and make for a nasty work environment where employees may try to actively sabotage each other to get a leg up in the competition.

LAISSEZ-FAIRE MANAGEMENT

Much like the government style, this management style emphasizes freedom and is a completely “hands-off” style of management. This is where the head of the company is simply the head and lets their employees work at their own pace and gives them loose guidelines on their projects.

Laissez-Faire management has seen great success in companies that thrive through their creativity and have highly-skilled employees that can motivate themselves to complete projects successfully. It is also probably the best management style for employee happiness being that they can feel like they are their own boss.

Of course, the drawback to this management style is your employees also have the freedom to slack-off whenever they feel like it. If you do not have skilled, self-motivating employees this management style will not work because projects will either never get done or get done very sloppily.

SUMMARY

There are many other management styles out there and various renditions of the ones listed above but all of these are styles that have proven to be successful in the right environments and with the proper leader.

Whether you run a small business or a Fortune 500 company, you likely already have implemented one of these management styles to run your company. However, if you’re just starting out, you should consider which one of these is the best for your business.

The right management style can create a great environment to work in and the wrong one can be the ultimate downfall of your business. So pick carefully, and remember to keep in mind how to run your company using these styles.

About the author

Nick

Co-Founder of Lisnic.com 🔥 & Founder of 12 digital agencies 🎯
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