10 Management Styles That Build Better Companies [+Expert Approved]

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10 Management Styles That Build Better Companies [+Expert Approved]

If you are thinking of improving the way your ‘s management works, you’ll find this post useful. I’ll show you ten different management styles that will help you find the best way to manage your staff. These are styles that successful Fortune 500 CEOs use every day and help them keep low employee turnover rates.

management styles

Many companies have management styles that allow them to increase productivity levels and foster good relationships among the staff. That said, the relationship between employees and managers can sometimes become difficult when communication fails, objectives are unclear, and engagement levels are low.

According to the Project Management Institute, not having clear goals is the most common factor of project failure with 37% of the cases studied.

No matter how complicated things might look in your , managers and employees can work as a team if you select the ideal management style. By doing so, communication, engagement levels, productivity, and other important aspects will improve in the short and long term.

Let’s take a look at different management styles so you can adopt the one that fits into your ‘s culture.

Leadership and Management Styles [Complete List]

1. Authoritarian Management

Authoritarian Management

This is the classical management style most people think of when they hear the word “boss”. However, having a bad connotation doesn’t mean it can’t work when applied correctly.

Authoritarian management means that the manager is one hundred percent in control.  It is a top-down management style.  It is their job to provide employees with a goal and a clear strategy that will lead them to accomplish different objectives. The steps the employees will follow as part of the strategy will be designed, explained, and supervised by the manager only.

Moreover, all the decision-making process will rely on the CEO or a selected group of supervisors. When a runs under this management style, employees are there to make sure the strategy is completed under the manager’s vision.

An example of an authoritarian management style is Microsoft, which works under Bill Gates’ vision. It didn’t matter if employees couldn’t understand the strategy, they were there to make it happen. This is a positive authoritarian management style that was applied successfully.

Even though this management style is not the best for some companies, it can work well in many others. Let’s take a look at the advantages and disadvantages.

Advantages

This management style can be the best one for your if you have a clear vision and specific goals. Employees and different managers won’t interfere with your vision and the results will be accomplished following a unique plan.

In addition, this strategy is useful in companies where the creative process is straightforward.

Disadvantages

When not applied correctly, it can turn the work environment into a negative one. Authoritarian doesn’t mean that you don’t about employees or that you see them as replaceable assets. It means that a single authority will lead the team towards the desired direction.

Another disadvantage is that it takes a lot of effort and time to run a under this management style. Even though other supervisors are there to help you, all the decisions will ultimately rely on the CEO.

2. Delegative Management

Delegative

Among the different management styles, this is the one that provides low-level managers with the most freedom. When this happens, low-level managers have the power to make decisions that would normally be the leader’s responsibility.

Working under a delegative management style requires a lot of confidence in your employees’ skills. Even if not all the decisions are delegated to other managers, some of these decisions are important enough to have a positive and also a negative impact on the .

Therefore, it is important that you provide the staff with the right kind of professional training beforehand. Otherwise, delegating important tasks can be detrimental to the .

The perfect example of a delegative CEO is Warren Buffet. He views himself as the capital allocator of his and empowers executives to make the decisions.

Let’s take a look at some of the advantages and disadvantages it has.

Advantages

One of the biggest advantages is that it increases employee engagement and satisfaction. Giving employees some freedom when making decisions is a way of boosting employee development in your .

Moreover, delegating allows leaders to have a more efficient distribution of the time and effort put into every task. This means that the can be more productive and efficient when there are more people in charge of the decision-making process.

Delegating tasks also helps employees improve their skills and confidence since a big part of the ‘s success will rely on them.

Disadvantages

Like any of the other management styles on this list, delegative management has a couple of downsides too. On the one hand, allowing low-level managers to make important decisions entails possible risks. The level of trust you need to have in your employees has to be high in order to do so.

On the other hand, allowing several people to make decisions can sometimes result in disagreement. When something goes wrong, it can be difficult for managers to take responsibility since not everyone might have the same opinion.

3. Transactional Management

The concept behind the transactional management style is that you can motivate employees through rewards. In today’s industry, it is common to find companies that use this style in order to keep high levels of employee engagement.

By offering employees tangible benefits for their work, you can increase productivity levels and overall satisfaction. There are many things you can offer your employees when you adopt a transactional management style.

There are the classical bonuses, days off, prizes and more. One of the benefits that has become popular is offering employees help to pay off student debt, which is a major concern these days.

Many employers are joining FutureFuel in order to offer this as an employee benefit. FutureFuel helps employees who have student debt save up thousands of dollars in the long term by offering refinancing options and more.

Advantages

The main advantage is that giving rewards and benefits to your employees can boost their productivity and engagement levels. When employees are expecting some kind of reward, they will often work hard to do their best.

In addition, giving employees benefits and rewards is a way of recognizing their effort. According to a TinyPulse study, 58% of employees demand more recognition.

Rewarding employees is one of the many employee appreciation ideas you can use in a transactional management style.

Disadvantages

Using rewards only to boost employees engagement and performance works for short periods of time. Unless you combine this with other employee development ideas, engagement won’t last long.

Moreover, employees tend to get used to getting rewards every time they complete a task. This can be detrimental when there aren’t rewards to offer for determined tasks.

4. Democratic Management

A democratic management style, also known as affiliative management style, works under the concept of allowing the decision-making process to be open. When a runs under this style, every employee has a say when deciding for the best course of action.

Even though it’s similar to the delegative management style, the final decision will always rely on the CEO. The idea is that employees give suggestions and ideas from their own positions, which ultimately will help the leader decide.

One of the main characteristics of managers who adopt this particular style is that they are always encouraging employees to be participative and share their ideas.

One example of a democratic style manager is Ricardo Semler, CEO of SEMCO SA. He actively encouraged employees to come up with new ideas and innovative solutions. He was famous for having fired 60% of the managers on his first day as CEO.

Advantages

Democratic management encourages employees to think for themselves and become more creative. Also, employees feel valued and recognized, which helps keep turnover rates low.

Employees who work under this style tend to be more and engaged in their positions. Moreover, they tend to contribute with valuable ideas that otherwise wouldn’t be presented to the rest of the staff and managers.

Disadvantages

When adopting a democratic management style, favoritism can become an issue. It is important that you take everyone’s ideas and suggestions into consideration. Not doing so can result in some employees being resentful if they feel you are leaving them aside.

5. Pacesetting Management

Pacesetting Management

This is one of the more demanding management styles on this list. When a manager adopts this style, they will set goals that are highly challenging and motivating for their teams.

Different from Laissz-faire managers, the leader will work in conjunction with the staff by setting goals and strategies, but also the pace to achieve those goals. When this happens, the employees tend to work hard to keep up with the pace the manager set at the beginning.

The majority of companies that adopt this style are industries where deadlines have to be met and the workload is heavy. When applied correctly, a pacesetting management style can produce outstanding results regarding productivity and ROI.

Even though it is true that “working under pressure” is not for every employee out there, some people enjoy working under these parameters to achieve goals that produce high levels of satisfaction.

Let’s take a look at some of the advantages and disadvantages of adopting this style.

Advantages

The most tangible advantages are high levels of productivity and return on investment. Adopting this style correctly can lead your team to a healthy competition environment that can produce outstanding results.

Disadvantages

When working under this style, employees have a higher risk of burnout. Also, setting unrealistic goals can lead your team to think they are not capable and they might feel bad. If you are to adopt this style, you have to keep an eye on employee turnover.

6. Paternalistic Management

In a paternalistic management style, managers and employees are treated like a big family where the leader has the final word. Employees will have the chance to give suggestions and share ideas but they won’t have a say in the decision-making process.

When this style is adopted, employees understand that the decisions made by the leader are made taking this big family into consideration. Managers tend to encourage employee development and satisfaction when working under these parameters.

A paternalistic management style is based on trust. Employees need to trust the organizational leadership of your if you want to adopt this style.

Like all the other management styles, it has pros and cons. Let’s take a look at them.

Advantages

Managers who adopt this style often promote employee development and value education and skills above all. They are willing to provide employees with professional training and courses to help the employees cope with their positions. This is an effective way to combat employee turnover in companies.

Disadvantages

When working with a “family”, there will be hierarchical structures. If not done correctly, favoritism accusations and hurt feelings can become present if employees don’t feel they are getting what they deserve. Also, when the trust in the organizational leadership gets broken, it can be difficult to get it back again.

7. Visionary Management

Visionary managers often put all their effort into conveying the ‘s mission and values to employees. They prefer to work directly with motivation levels and let low-level managers deal with most of the everyday challenges.

Visionary leaders will try to encourage their staff to work as a team and will find a way to keep employees motivated. Managers who adopt this leadership style value emotional intelligence and like designing strategies to keep a healthy work-life balance.

One of the points that characterize visionary managers is that they tend to be flexible leaders. This is a trait employees value when they are in a situation that requires schedule changes or a slower pace to accomplish a goal.

Visionary managers don’t get involved in the everyday details and value results more than the way to achieve goals.

Advantages

One of the most important advantages is that it fosters good relationships and encourages employees to be motivated. By adopting this style, you can promote a healthy corporate culture and work environment.

Disadvantages

It may not be the most appropriate style to use if your staff is inexperienced or new. If you want to focus on motivation, there are other professional aspects that need to be covered first. If employees lack training and skills, motivation will have little or no effect.

8. Result-Based Management

Results Based

Under a result-based management style, the top priority becomes achieving goals. The way goals are achieved can be flexible and different as long as they are efficient. In addition, result-based managers value how quickly things get done.

One way to boost positive results when employers adopt this style is to offer rewards with certain tasks. In this sense, it is similar to the transactional management style. The only difference is that rewards won’t be the main strategy to accomplish goals.

By adopting this style, employees are able to develop strategies to produce tangible results. This allows them to have more control when it comes to making decisions that will lead them to desirable results.

Advantages

Giving your employees the freedom necessary to develop their own strategies can produce outstanding results. Working with a result-based management style will encourage employees to focus their resources on the right tasks. This translates into higher engagement and productivity levels.

Moreover, it encourages employees to be the best they can be. This is a good thing to some point, for example when goals are achievable and realistic.

Disadvantages

It is the previous point which can become a disadvantage when goals are unrealistic. If employees feel they are not good enough to produce the expected result, engagement levels and motivation can decrease.

9. Example-Setting Management

This management style is characterized for encouraging employees to work and accomplish goals following specific examples provided by leaders. This is the perfect management style for employees with a lack of skills or training.

When a adopts this management style, it is common to see leaders working hand-in-hand with employees to achieve specific goals. It is by setting examples and working hard that managers encourage employees to give their best.

Advantages

It is perfect for non-trained staff or employees who lack specific skills. It is a way to support your employees and lead them to the exact point you want them to go.

One of its main advantages is that employees feel supported and guided through specific examples and explanations. This way, they are more likely to have a positive employee experience at your .

Disadvantage

Employees that are often following examples of how to solve challenges might not develop their own criteria when it comes to dealing with challenging scenarios. Moreover, getting used to this type of management style can result in less creative team members.

In parallel, depending one hundred percent on a manager can have a negative impact on your . Example-setting management works better when adopted during specific periods of time, such an important change in the way the works or the introduction of a new product.

10. Charismatic Management

When we talk about management styles, this is the one that stands out as the “more human” of all. This is because charismatic managers tend to establish close and meaningful professional relationships with their employees.

The philosophy behind this management style is making employees feel more comfortable and supported at work. Charismatic leaders are often mentors and are willing to lead employees to the position in which they can be most useful for the .

One of the most important values when adopting this style is cooperation and teamwork. Charismatic management focuses on providing employees with a satisfactory employee experience and often has low turnover rates.

One example of a charismatic leader is Martin Luter King Jr. Even though he could be authoritarian he wan mainly a mentor to his followers.

Advantages

Working together with employees and acting as a mentor to them can improve engagement and satisfaction levels in your . When it comes to adopting different management styles, you want to make sure employee engagement is high.

Disadvantages

Being charismatic and empathetic can lead employees to take their jobs lightly sometimes. It is important that you are charismatic but strict enough when you have to. Otherwise, productivity levels can be affected.

Moreover, flexibility is another aspect employees might want to exploit based on the fact that you are charismatic and approachable. You can be flexible with your staff but to a certain point. Consider employees circumstances before allowing too much flexibility.

Choosing the Right Management Style for Your

There are many factors to take into consideration before adopting a specific management style. Some of the aspects you can consider are:

  • The type of industry
  • The current situation of the
  • The level of skills your employees have
  • The goals you want to achieve
  • The time you have to achieve goals
  • Turnover rates and employee development opportunities

Assessing your ‘s operations, processes, and staff is something you want to do before adopting any of the management styles mentioned on this list. If you choose the incorrect style, the result might not be what you expected.

Example

Let’s say you have a call-center or that your requires contact center departments. For this kind of industry, you might not want to adopt a visionary or delegative management. The reason is that a call-center has to deal with thousands of clients a day and solve thousands of problems.

A more appropriate style for a like this would be transactional or pacesetting. Another possibility is combining two or even more styles so you can adapt them to your ‘s needs.

In the previous example, for a high-stress job like a call-center agent, you can combine the effectiveness of the pacesetting style with the motivational transactional style. This way, employees are engaged, working under pressure, and getting rewards for accomplishing tasks.

Therefore, analyzing the type of you have and how all the processes work together is something you must evaluate first. Then, take the management style that best suits your needs or combine the best characteristics from a couple of them to create your own management style.

You are now prepared to choose one or two of the types of management styles on this list.

Good Luck!