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GCSE Business Studies

Styles of Management

What makes a good leader or manager? For many it is someone who can inspire and get the most fromtheir staff.

There are many qualities that are needed to be a good leader or manager.

 Be able to think creatively to provide a vision for the company and solve problems

 Be calm under pressure and make clear decisions

 Possess excellent two-way communication skills

 Have the desire to achieve great things

 Be well informed and knowledgeable about matters relating to the business

 Possess an air of authority

Do you have to be born with the correct qualities or can you be taught to be a good leader? It is mostlikely that well-known leaders or managers (Winston Churchill, Richard Branson or Alex Ferguson?) aresuccessful due to a combination of personal characteristics and good training.

Managers deal with their employees in different ways. Some are strict with their staff and like to be incomplete control, whilst others are more relaxed and allow workers the freedom to run their own workinglives (just like the different approaches you may see in teachers!). Whatever approach is predominatelyused it will be vital to the success of the business. “An organisation is only as good as the personrunning it”.

There are three main categories of leadership styles: autocratic, paternalistic and democratic.

Autocratic (or authoritarian) managers like to make all the important decisions and closely superviseand control workers. Managers do not trust workers and simply give orders (one-way communication)that they expect to be obeyed. This approach derives from the views of Taylor as to how to motivate

workers and relates to McGregor’s theory X view of workers. This approach has limitations (ashighlighted by other motivational theorists such as Mayo and Herzberg) but it can be effective in certainsituations. For example:

When quick decisions are needed in a company (e.g. in a time of crises)

When controlling large numbers of low skilled workers.

Paternalistic managers give more attention to the social needs and views of their workers. Managersare interested in how happy workers feel and in many ways they act as a father figure (pater meansfather in Latin). They consult employees over issues and listen to their feedback or opinions. Themanager will however make the actual decisions (in the best interests of the workers) as they believe thestaff still need direction and in this way it is still somewhat of an autocratic approach. The style is closelylinked with Mayo’s Human Relation view of motivation and also the social needs of Maslow.

A democratic style of management will put trust in employees and encourage them to make decisions.They will delegate to them the authority to do this (empowerment) and listen to their advice. Thisrequires good two-way communication and often involves democratic discussion groups, which can offer useful suggestions and ideas. Managers must be willing to encourage leadership skills in subordinates.

The ultimate democratic system occurs when decisions are made based on the majority view of allworkers. However, this is not feasible for the majority of decisions taken by a business- indeed one of the criticisms of this style is that it can take longer to reach a decision. This style has close links withHerzberg’s motivators and Maslow’s higher order skills and also applies to McGregor’s theory Y view of 

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GCSE Business Studies

workers.

Summary of management styles

Description Advantages Disadvantages

Autocratic Senior managers takeall the important

decisions with no

involvement from

workers

Quick decision makingEffective when employing

many low skilled workers

No two-way communication socan be de-motivating

Creates “them and us” attitude

between managers and

workers

Paternalistic Managers make

decisions in best

interests of workers after 

consultation

   More two-way communication

so motivating

Workers feel their 

social needs are being

met

Slows down decision making

Still quite a dictatorial or 

autocratic style of 

management

Democratic Workers allowed tomake own decisions.

Some businesses run

on the basis of majority

decisions

Authority is delegated toworkers which is motivating

Useful when complex

decisions are required

that need specialist skills

Mistakes or errors can bemade if workers are

not skilled or experienced

enough

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