tutor2u

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

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

5 Be calm under pressure and make clear decisions

5 Possess excellent two-way communication skills

5 Have the desire to achieve great things

5 Be well informed and knowledgeable about matters relating to the business

5 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 most
likely that well-known leaders or managers (Winston Churchill, Richard Branson or Alex Ferguson?) are
successful 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 in
complete control, whilst others are more relaxed and allow workers the freedom to run their own working
lives (just like the different approaches you may see in teachers!). Whatever approach is predominately
used it will be vital to the success of the business. “An organisation is only as good as the person
running 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 supervise
and 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 (as
highlighted by other motivational theorists such as Mayo and Herzberg) but it can be effective in certain
situations. For example:

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

f When controlling large numbers of low skilled workers.

Paternalistic managers give more attention to the social needs and views of their workers. Managers
are interested in how happy workers feel and in many ways they act as a father figure (pater means
father in Latin). They consult employees over issues and listen to their feedback or opinions. The
manager will however make the actual decisions (in the best interests of the workers) as they believe the
staff still need direction and in this way it is still somewhat of an autocratic approach. The style is closely
linked 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. This
requires 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 all
workers. 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 with
Herzberg’s motivators and Maslow’s higher order skills and also applies to McGregor’s theory Y view of
tutor2u
GCSE Business Studies

workers.
Summary of management styles

Description Advantages Disadvantages

Autocratic Senior managers take Quick decision making No two-way communication so

all the important Effective when employing can be de-motivating
decisions with no many low skilled workers Creates “them and us” attitude
involvement from between managers and
workers workers

Paternalistic Managers make More two-way communication Slows down decision making
decisions in best so motivating Still quite a dictatorial or
interests of workers after Workers feel their autocratic style of
consultation social needs are being management
met

Democratic Workers allowed to Authority is delegated to Mistakes or errors can be

make own decisions. workers which is motivating made if workers are
Some businesses run Useful when complex not skilled or experienced
on the basis of majority decisions are required enough
decisions that need specialist skills

Key Links for GCSE Business Studies

http://www.tutor2u.net/
Discussion Board for GCSE Business Studies
Other GCSE Business Studies Revision Notes and Resources from tutor2u
Tutor2u GCSE Business Online Store