5 Types of Management Styles that Managers Must Know

Which type of management style should you choose as a manager? Explore the 5 main management styles and explore their pros and cons in detail.

34% of employees globally have quit their jobs in the last year due to uncaring and uninspiring leaders, according to a McKinsey & Company survey.

With such a risk of attrition, the right type of management style can retain employees to meet goals without hassle. A management style plays a direct role in the employee’s job satisfaction. In most situations, a manager is more responsible for an employee’s retention than the company. 

Let’s explore the main types of management styles today. Find each of their advantages and disadvantages. 

What is a Management Style?

To implement management functions from planning to controlling, an organisation needs to adopt a specific management style that makes the work environment suitable for meeting goals and employee satisfaction. 

A management style describes how work is planned and organised, decisions are made, and every other managerial aspect. 

According to Chartered Management Institute

“Management or leadership style is the manner in which managers exercise their authority in the workplace and ensure that their objectives are achieved… The key components of management and leadership style are attitudes and behaviours, including: what a manager says; how they say it; the example they set; their body language; and their general conduct and demeanour.”

Explore the meaning and scope of what is management 

Important Elements of a Management Style 

According to Rick Roskin’s paper “Management Style and Achievement; A Model Synthesis”, three factors determine the success of management styles.

1. The manager’s personality
2. The type of employees under managers and how they work
3. The specific situation on any hour or day for the employee or manager

While these factors are broad, there are more variables to consider when a management style is successful. They are

• Hierarchy level and category of occupation, which denotes that the same kind of supervision is not the same for every level of employee.
• Organisational structure, which takes into consideration that employees have clarity on what their tasks are.
• Structure of the job, which determines how coordination works in an organisation.
• Management behaviour, which determines how effective the management is in maintaining relationships with employees.
• National culture, which is an indirect factor that affects the attitudes, awareness and ethics of employees in an organisation.

Many experts categorise the above into internal and external factors. 

Types of Management Styles

The types of management styles originate from the father of social psychology, Kurt Lewin. He characterised a model covering three broad categories according to different leadership climates. 

1. Authoritarian
2. Democratic 
3. Laissez-faire

These three management styles created the framework for organisations back in the 1930s. Since then, more models have been created by later social psychologists and researchers. 

Rensis Likert, Robert Tannenbaum and Warren H Schmidt (Tannenbaum Schmidt Leadership Continuum), Douglas McGregor (Theory X and Theory Y), etc., are among the main contributors. 

Based on all these models, there are many types of management styles today. Find the most popular types below. 

Authoritarian/Autocratic Management Style

This is where the manager/leader has all the authority, and the communication occurs top-down. 

The employees in a team are given tasks to complete by the managers, and they have to complete them under a specific time. As the manager retains all the authority to make decisions, this management style works when time is the main factor. 

Pros of Authoritarian Management Style

• Decision-making is quick, as there is only one leader who gives directions
• Tasks are more streamlined in the team as the rules and regulations are set by one leader
• Communication becomes more systematic and the original instruction is not misunderstood
• It is ideal for teams that do not have expertise on the work and who require detailed information to get tasks completed

Cons of Authoritarian Management Style 

• As the team has no power in decision-making, this management style can create too much dependency on the leader
• Employee morale can go down drastically, as importance is never given to employee recognition
• There is no scope for innovation or out-of-the box thinking

Democratic Management Style

The decision-making is done on a group level, where both manager and team are involved. While the managers are the authority, they give importance to the opinions of team members too. That’s why it is also known as a participative management/leadership style. 

Pros of Democratic Management Style

1. Improves working relationships between employees and management, and among employees, as the work environment remains participatory.
2. It promotes creativity as knowledge and ideas are shared openly during meetings.
3. With democratic management, there is more job satisfaction.

Cons of Democratic Management Style

1. Decision-making can take longer as everyone’s opinions are heard. It may take more time to reach a common point.
2. Democratic management style is not always great during crisis, as making fast decisions may not be comfortable for some team members. 

Related: Team leader interview questions

Laissez-faire Management Style

This type of management style goes a little further than democratic leadership. It gives the subordinates/team members more freedom to work. While the manager sets the goals, there is little intervention from their end. 

Pros of Laissez-faire Management Style

• It promotes innovation and individual growth, when there are self-motivated employees and who work better without an authoritative supervision.
• Subordinate employees only have to reach out to their manager only when they are in doubt, which can make the coordination between two parties valuable.

Cons of Laissez-faire Management Style

• It is not a guarantee for job satisfaction and can make employees complain more about their managers.
• Team productivity can reduce when employees are not self-motivated or feel neglected, as there is less intervention from the manager’s end.
• There are more chances of conflicts among team members.

Related: Conflict Management

Transactional Management Style

The transactional management style focuses on rewards and punishment. If the subordinate follows through and meets goals, the superior/manager will reward the employee as promised before. If not, there is some form of penalty. 

Pros of Transactional Management Style

• In this type of management style, the rules and goals are highly well-structured, and subordinates work systematically.
• This type of style is highly efficient, as it focuses on leading a team by tapping into the employees’ behaviour and providing constructive feedback.

Cons of Transactional Management Style

• There is no importance given to employee’s creativity, professional or organisational growth, as the management is only concerned with short-term goals.
• There is no flexibility in tasks and deadlines, that may eventually lead to employee dissatisfaction

Transformational Management Style

In this type of management style, the main purpose is to improve processes and increase employee motivation over time to achieve goals. It takes future uncertainties into account as well. 

This type of management/leadership has four elements, or the so-called 4 I’s. 

• Intellectual Stimulation – Here, the employees are not kept in the dark in regard to goals. The key is to help employees grow their analytical ability which leads to innovation. 
• Inspirational Motivation – The managers/leaders help the employees believe in the vision of the business. 
• Idealised Influence – The manager becomes the role model for the subordinates/employees. 
• Individual Consideration – The employee is provided with everything necessary for professional development

Pros of Transformational Management Style

• There is a common goal that is made clear to the employees who are motivated by the leader/manager
• It is extremely useful during change management and reduces resistance from employees
• It creates positive morale among employees 

Cons of Transformational Management Style

• As it is based on motivation, the ultimate vision may seem too conceptual, and it may demotivate some employees at an earlier stage who are looking for immediate rewards from the limited work they do
• Some employees may feel more pressure as the big picture may seem too hard to complete
• Communication becomes the most important aspect of this style of management. When it is not given importance, the entire vision may suffer. 

Parting Thoughts

So these are among the most popular types of management styles that you should know. Some other types include coach management style, pacesetting management style, etc. If you are an aspiring manager or preparing for managerial round interview questions for your next job, knowing these should help you explain your stance on management.

And, if this blog has inspired you to grow into senior managerial roles, take up some executive-level business management courses.