LEADERSHIP AND MANAGEMENT STYLES

Management involves getting things done through other people. Leadership, at its best, means
inspiring staff to achieve demanding goals. According to Peter Drucker, a manager does things right;
a leader does the right thing.
The way in which managers deal with their employees is known as their management style. For
example, some managers are strict with workers. They always expect deadlines to be met and
targets to be hit. Others are more relaxed and understanding. If there is a good reason why a
particular task has not been completed by the deadline, they will be willing to accept this and give
the employee more time. Although the way in which everyone manages will vary slightly from
individual to individual, their styles can be categorised under three headings: autocratic, democratic
and paternalistic.
Autocratic managers are authoritarian; they tell employees what to do and do not listen much to
what workers themselves have to say. Autocratic managers know what they want doing and how
they want it done. They tend to use one-way, top-down communication. They give orders to workers
and do not want much feedback. Democratic managers, by comparison, like to involve their workers
in decisions. They tend to listen to employees ideas and ensure people contribute to the
discussion. Communication by democratic managers tends to be two-way. Managers put forward an
idea and employees give their opinion.
A democratic manager would regularly delegate decision making power to junior staff.
The delegation of authority which is at the heart of democratic leadership can be approached in one
of two main ways:
1 Management by objectives the leader agrees clear goals with staff, provides the necessary
resources, and allows day-to-day decisions to be made by the staff in question; this approach is
advocated by Peter Drucker and by Douglas McGregor in his support for what he called the Theory Y
approach to management.
2 Laissez-faire, meaning let it be - this occurs when managers are so busy or so lazy
that they do not take the time to ensure that junior staff know what to do or how to do it. Some
people might respond very well to the freedom to decide on how to spend their working lives; others
may become frustrated.
It is said that Bill Gates, in the early days of Microsoft, hired brilliant students and told them no
more than to create brilliant software. Was this a laissez-faire style or management by objectives?
Clearly the dividing line can be narrow.
A paternalistic manager thinks and acts like a father. He or she tries to do what is best for the
staff/children. There may be consultation to find out the views of the employees, but decisions are
made by the head of the family. This type of manager believes employees need
direction but think it is important that they are supported and cared for properly. Paternalistic
managers are interested in the security and social needs of the staff. They are interested in how
workers feel and whether they are happy in their work. Nevertheless it is quite an autocratic
approach.

In the 1950s Douglas McGregor undertook a survey of managers in the USA and identified two
styles of management, which he called Theory X and Theory Y. Theory X managers tend to distrust
their subordinates; they believe employees do not really enjoy their work and that they need to be
controlled. In McGregors own words, many managers believe The average human
being has an inherent dislike of work and will avoid it if he can. Note that McGregor is not
putting it forward as a theory about workers, but about managers. In other words, Theory X is about
the view managers have of their workforce. Theory Y managers, by comparison, believe that
employees do enjoy work and that they want to contribute ideas and effort. A Theory Y manager is,
therefore, more likely to involve employees in decisions and give them greater responsibility. The
managerial assumptions identified by McGregor as Theory Y included:
Commitment to objectives is a function of the rewards associated with their
achievement.
The average human being learns, under proper conditions, not only to accept but to seek
responsibility.
The capacity to exercise a relatively high degree of imagination, ingenuity and creativity in
the solution of organisational problems is widely, not narrowly, distributed in the population.
It is clear that Theory Y managers would be inclined to adopt a democratic leadership style. Their
natural approach would be to delegate authority to meet specific objectives.
The Theory X approach is likely to be self-fulfilling. If you believe people are lazy, they will probably
stop trying. Similarly if you believe workers dislike responsibility and fail to give them a chance to
develop, they will probably stop showing interest in their work. They end up focusing purely on their
wage packet because of the way you treat them.
In his book McGregor drew upon the work of Maslow and Herzberg. It need be no surprise that
there are common features to the theories of these three writers. McGregors unique
contribution was to set issues of industrial psychology firmly in the context of the management of
organisations. So whereas Herzbergs was a theory of motivation, McGregors
concerned styles of management (and thereby leadership).
So, which is the right approach? Clearly a Theory Y manager would be more pleasant
and probably more interesting to work for. As outlined in the In Business on Harold
Geneen, however, a Theory X approach can work. It is especially likely to succeed in a business
employing many part-time, perhaps student, workers, or in a situation where a business faces crisis.
HAROLD GENEEN
Harold Geneen, who died aged 87 in 1998, was the man who made ITT one of Americas most
powerful multinational corporations.
When Geneen became President of ITT in 1959, the company was a loose-knit empire with modest
profits. By the time he left he had bought 350 companies in 80 countries and created
Americas 11th biggest firm with sales of S17 billion. Geneen introduced a system of
incredibly strict accountability. His system involved monthly meetings at which executives had to
explain their results and achievements to Geneen. The ordeal of being cross-questioned in these
meetings made some managers physically ill. According to Geneen the skill of management lay in
being able to smell the truth. He liked complete control, relied only on
unshakeable facts to make logical decisions and insisted, I want no

surprises.
The role of managers is changing in many firms, which are now encouraging employees to work in
teams. In this system managers are increasingly seen as a support to employees rather than as a
supervisor. In the words of Tom Peters , they are coaches and facilitators not
policemen; they are there to help employees fulfil their potential. This approach
relies on a high degree of trust between employees and managers and a common sense of purpose.
To gain this trust managers must show that they want employees to contribute and take greater
responsibility for decision making. They must show they value the workers input. In
companies such as Rover and Unipart, for example, employees are encouraged to take control over
their own work and develop ways of improving the process for themselves. In such organisations
there is a conscious effort to remove the distinction between managers and workers (or them
and us). At Rover, for example, everyone is called an associate; at Unipart everyone is a
team member.
Although a simple change of name could in itself be a gimmick, it reflects a move away from the
traditional company hierarchy. All Unipart employees are salaried (rather than being paid wages or
piece-rate) and have the same terms and conditions as managers. Salaries differ according to
different skills and responsibilities, but everyone is treated in the same way, I.e there is single
status. In the past, people would eat in different canteens according to their rank within the
organisation. They would have different car parking areas and would have different sickness
benefits. In many companies such obvious distinctions no longer exist.
Strangely, though, this progressive move has coincided with a rapid increase in share options and
other financial incentives for directors and senior managers. Huge payouts for those at the top of an
organisation must undermine the desire to build team spirit.
Each style of management can work well in different situations. If there is a crisis, for example,
people often look for a strong leader to tell them what to do. Imagine that sales have unexpectedly
fallen by 50%, causing uncertainty, even panic, within the organisation. The management needs to
take control quickly and put a plan into action. An autocratic style might work well at this moment.
In a stable situation where employees are trained and able to do their work successfully a more
democractic leadership style might be more appropriate. It is often said that countries elect very
different types of leaders when there is a threat of war or economic instability than when the
country is doing well. Similarly, think about how people react when they are learning to drive. For
the first few lessons they are uncertain what to do and are grateful to be told. Once they have
passed their test and have driven for several years they will no doubt resent anyone telling them
how to drive better! The best style of management at any moment will depend on an enormous
range of factors such as the personalities and abilities of the manager and the workers, and the
nature of the task. Imagine a confident manager who knows his or her job well but is faced with an
unusually difficult problem. If the staff are well trained and capable, the manager would probably
ask for ideas on what to do next. If, however, the manager was faced with a fairly routine problem
he or she would probably just tell the employees what to do because there would be no need for
discussion.
A managers style should, therefore, change according to the particular situation and the
people involved. It will also vary with the time and degree of risk involved. If a decision has to be
made urgently and involves a high degree of risk, the manager is likely to be quite autocratic. If
there is plenty of time to discuss matters and only a low chance of it going wrong the style may well
be more democratic.

The way in which a manager deals with his or her colleagues can have a real impact on their
motivation and how effectively they work. An experienced workforce which is used to being involved
in decisions may resent a manager who always tries to tell them what to do. This might lead to a
reduction in the quality of their work, a fall in productivity and an increase in labour turnover. If,
however, these employees were involved in decision making, the firm could gain from better ideas
and a more highly motivated workforce. This does not mean that everyone wants to be involved or
indeed that it is appropriate. Employees may lack the necessary training or experience. Therefore a
democratic approach might simply mean taking longer for management to reach the decision it was
going to make anyway.
The style of management which people adopt depends on many factors such as their personality, the
particular circumstances at the time and the culture of the organisation. Although we have discussed
three main styles the actual approach of most managers is usually a combination of all of them,
depending on the task or the nature of the situation. If an order has to be completed by tomorrow
and time is short, for example, most managers are likely to be autocratic to make sure it gets done.
If, however, there is plenty of time available the manager may be more democratic. No-one is
completely autocratic or completely democratic, it is simply a question of degree. However, some
managers do tend to be more autocratic than others. This often depends on their own experiences
(What was their boss like? What worked well when they were being trained?) and their personality
(Do they like to be in control of everything ? Are they willing to delegate? Do they value the opinions
of others?).
In general the move has been towards a more democratic style of management in the UK in recent
years. This is probably because employees expect more from work than they did in the past. They
are better educated, have a higher basic standard of living and want more than just money in return
for their efforts. Having satisfied their lower level needs they are now looking to satisfy their higher
level needs. The growth of democratic management and greater participation has also increased
with the move towards lean production and the emphasis on techniques such as total quality
management. These methods of production require much more involvement by the employees than
in the past. Employees are given control over their own quality, given the authority to make
decisions over the scheduling of work and are expected to contribute ideas on how to improve the
way they are working. This approach requires much more trust in employees than was common
many years ago. It has to be matched with a more democratic leadership style.
ARE YOU BORN A GOOD LEADER?
Acccording to management writer Warren Bennis, the most important ingredient of a business
leader is the ability to provide a vision. He or she must also show passion, integrity, curiosity and
daring. The question is, can such qualities be taught or are you born with them? Ruth Tait, head of a
recruitment company, interviewed a series of business leaders for her book Roads To The Top. She
found it difficult to identify any common attributes although many of the executives had some
childhood adversity that seemed to give them their drive. She also found that while management
education was regarded as helpful it was stressed far less than the learning they achieved from
experience.
Although there is always argument about whether leaders are born or made, the idea that leadership
is acquired through experience seems to be gaining favour.
Among the main lines of analysis are:
Management style can have a significant impact on the way people work. By adopting the right

approach employees are likely to be more motivated and show greater commitment.
Therefore effective analysis of leadership should be rooted in the theories of writers such as Mayo
and Herzberg.
The correct management style will depend on factors such as the task, the people
involved and the amount of risk. There is no one style which is always appropriate. Therefore the
context of the business case is always relevant.
It may not be easy for managers to change their style. There may be situations in which managers
should be more democ- ratic; this does not necessarily mean they will be. Effective management
training could be a useful way to persuade managers to be flexible.
There is some debate about the extent to which you can train people to become effective managers
or leaders. One extreme view is that good managers and leaders are born that way if this is
true companies have to put their resources into finding the right sort of person. It is more likely that
a good leader is a combination of training and personal characteristics.
All firms are seeking effective managers. Good managers make effective use of the firms
resources and motivate the staff. They provide vision and direction and are therefore a key element
of business success. Look at any successful company and you will usually find a strong management
team. The problem is knowing what it is that makes a good manager and what is the
best management style. Even if we thought we knew the best style, can we train
anyone to adopt this approach or does it depend on their personality? There are, of course, no easy
answers to these questions. The right style of management will depend on the
particular circumstances and the nature of the task and while it is possible to help someone develop
a particular style it will also depend on the individuals personality. As employees have
benefited from a higher standard of living in the UK and have higher expectations of work, managers
have generally had to adopt a more democratic style to motivate people. However, there are plenty
of autocratic managers who also succeed.
AUTOCRATIC MANAGEMENT autocratic managers keep most of the authority to
themselves; they do not delegate much or share information with employees. Autocratic or
authoritarian managers tend to tell employees what to do.
DEMOCRATIC MANAGEMENT democratic managers take the views of their subordinates
into account when making decisions.
PATERNALISTIC MANAGEMENT a paternalistic manager believes he or she knows what is
best for the employees. Paternalistic managers tend to tell employees what to do but will often
explain their decision. They are also concerned about the social needs of employees.
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SINGLE STATUS occurs when all employees are given the same rights and conditions, e.g.
the same rights to pension and sickness benefits.
TEAM-BASED MANAGEMENT decisions are made by teams rather than workers being told
what to do by a supervisor.