Management styles: What makes a good leader?

Effective leadership is the cornerstone of a successful workplace, but with so many different management styles, how do you know which one is best for you? This is a particularly tricky question when you consider that each management style brings its own unique strengths and weaknesses. That’s why it’s crucial to understand the characteristics of different leadership approaches so that you can uncover the most effective management style for your organization and drive sustainable growth.

What is your management style? What skills help your managers get the most from their teams? Are your employees responsive?

In this article, we will explore different leadership styles in management and how you can determine what the best management style is for your business. We will also share a few management style examples and interview questions to help you find the perfect fit for your organization’s goals and values.

• What are management styles and why are they important?
• Types of management styles
• What is the best management style?
• Management style examples
• Management style interview questions
• People-first tools for people-first teams
• Managing talent with our free resources

What are management styles and why are they important?

Management styles refer to the different approaches that managers use to lead and oversee their teams and organizations. This includes the way that a large or small business manager plans, organizes, makes decisions, delegates, and manages their staff. These styles can vary significantly, and they play a crucial role in shaping the work culture and environment, employee satisfaction, and overall organizational success.

The management style a leader uses can impact various aspects of a department or organization as a whole.

This includes:

• Employee morale and productivity. Management styles directly influence employee morale, job satisfaction, and motivation. This is because employees are more likely to be engaged and productive when they feel valued and empowered.
• Communication and decision-making. Different management styles dictate the flow of communication and decision-making processes within an organization.
• Organizational culture. Management styles contribute to shaping the overall culture of the organization. A positive and supportive management style can foster a healthy work environment and a cohesive team.
• Adaptability and flexibility. Different situations may require different management approaches. Having a range of leadership styles in management allows managers to adapt to changing circumstances and challenges effectively.
• Employee development. Management styles that focus on employee development, wellbeing, mental health, and empowerment can lead to a skilled and motivated workforce, which contributes to the organization’s long-term success.
• Conflict resolution. The management style used in an organization influences how conflicts are handled within the organization. Effective management can facilitate constructive conflict resolution, promoting a harmonious work environment.

Ultimately, management styles impact the overall performance and success of an organization. A well-suited management style can lead to improved efficiency, higher productivity, and better business outcomes. The key is finding the right leadership style for the unique needs and circumstances of your company.

Types of management styles

As we mentioned briefly above, there is a range of leadership styles in management. Each management style has its advantages and disadvantages, and the most effective approach depends on various factors. This includes a company’s size, industry, organizational culture, and the nature of the tasks being performed. Some businesses may benefit from a more traditional, hierarchical management style, where clear directives and top-down decision-making are essential for maintaining control and ensuring efficiency. On the other hand, businesses in dynamic and innovative industries might find that a more flexible and collaborative management style, such as the democratic or coaching approach, encourages creativity, fosters teamwork, and adapts well to change.

So, what are the management styles that are most commonly used in organizations?

Let’s find out. Think about your own organization when you read the following definitions and consider which management style might work best for your business.

Autocratic management style

An autocratic management style is characterized by centralized decision-making authority and a high level of control exerted by the manager or leader. With this style, the manager holds significant power and makes decisions without seeking input or consensus from the team. The decision-making process is top-down, and employees are expected to follow instructions and directives without much room for independent judgment or creativity. Communication is often one-way, with limited opportunities for feedback or open dialogue.

While this style can lead to quick decision-making and streamlined processes, it can also stifle employee engagement and creativity. Employees may feel disempowered and less motivated, leading to potential issues with morale and job satisfaction. The effectiveness of the autocratic management style largely depends on the nature of the tasks and the competence and experience of the manager in making well-informed decisions.

Democratic management style

A democratic management style is characterized by a participative and inclusive decision-making process, where the manager actively seeks input and feedback from employees. With this style, employees are encouraged to contribute their ideas, opinions, and expertise, and their input is taken into consideration when making important decisions that affect the organization. The manager acts as a facilitator, promoting open communication and fostering a collaborative work environment.

With a democratic management style, there is a sense of shared responsibility and empowerment among team members. Employees feel valued and engaged as they have a voice in shaping the direction of the organization. This approach promotes teamwork, creativity, gratitude in the workplace, and innovation, as diverse perspectives are embraced and incorporated into the decision-making process.

While the democratic management style can lead to slower decision-making compared to autocratic styles, it often results in higher employee morale, increased job satisfaction, and a more resilient and adaptable organization. It is particularly effective in environments that require flexibility, creativity, and continuous improvement.

Laissez-faire approach

A laissez-faire management style, derived from the French term for “let it be”, is a hands-off leadership approach where the manager provides little direction or supervision to their team members. With this style, instead of focusing on micro-managing and time management skills, the manager delegates decision-making authority and responsibilities to employees, allowing them significant autonomy and freedom to operate independently.

Managers who adopt a laissez-faire style trust their employees’ abilities to accomplish tasks and make decisions without much intervention. They offer minimal guidance and interference in day-to-day operations, focusing on providing necessary resources and support when needed. This approach is commonly observed in highly skilled and self-motivated teams, where individual members are experts in their respective fields.

While laissez-faire management styles can foster creativity and innovation by giving employees space to explore their ideas, they may not be suitable for all situations. Without proper oversight, it can lead to disorganization, lack of accountability, and reduced productivity. Therefore, the success of the laissez-faire style relies heavily on having a competent and self-directed workforce, as well as clear communication and well-defined goals.

Transformational managing style

Transformational management styles are characterized by a visionary and inspirational leadership approach, aimed at driving significant positive change within an organization. Leaders who adopt the transformational style focus on motivating and empowering their team members to achieve extraordinary results beyond their perceived capabilities. They articulate a compelling vision of the future, inspiring employees to embrace a shared mission and work toward common goals.

With the transformational management style, leaders display charisma, enthusiasm, and a genuine passion for the organization’s purpose, motivating employees to commit fully to the cause. They promote a culture of innovation, continuous learning, and personal growth, encouraging employees to challenge the status quo and think creatively.

Additionally, transformational leaders provide individualized support and mentorship to their team members, recognizing and nurturing their strengths and potential through platforms like employee spotlights. They build strong relationships based on trust, open communication, and mutual respect.

The transformational management style is particularly effective during times of organizational change, fostering adaptability and resilience. It enhances employee engagement, fosters a positive work environment, and drives sustainable long-term success for the organization.

Transactional managing style

Transactional management styles emphasize clear and specific goal-setting, structured performance expectations, and a system of rewards and recognition based on achieving those goals. With this style, managers and employees engage in a transactional relationship, where tasks are viewed as transactions that require completion for a predetermined reward or consequence.

Managers using the transactional style establish well-defined performance metrics and provide incentives, such as bonuses or promotions, for meeting or exceeding targets. Conversely, they may apply disciplinary measures for failing to meet expectations.

This management style is rooted in the concept of exchange, where employees are motivated by tangible rewards and consequences. It can be effective in organizations with routine tasks and when there is a need for immediate performance improvement.

However, the transactional style may not foster long-term employee engagement or creativity, as it primarily relies on extrinsic motivation. It is most suitable for situations where a clear and structured approach is necessary, but it may not be as effective in dynamic and rapidly changing environments. To promote overall employee satisfaction and growth, a combination of transactional and transformational elements in leadership may be beneficial.

Coaching

A coaching management style emphasizes the growth and development of individual employees to maximize their potential and performance. With this style, managers take on the role of coaches. They work closely with their team members to identify strengths, areas for improvement, and specific developmental goals.

Coaching managers provide guidance, support, and constructive feedback to help employees enhance their skills and achieve personal and professional growth. They encourage open communication, active listening, and two-way feedback, fostering a positive and collaborative work environment.

Unlike a directive approach, coaching managers empower employees to take ownership of their work, offering assistance when needed. They focus on unlocking employees’ potential through continuous learning, skill-building, and opportunities for career advancement.

The coaching management style is particularly effective in building strong relationships between managers and their teams, fostering employee engagement and motivation, and driving overall organizational success. By investing in the development of individual team members, coaching managers create a culture of continuous improvement and long-term performance excellence.

Conflict management styles

When you hire a manager, it’s also important to make sure that they have good conflict management skills. This differs from an individual’s general management style. A manager’s overall management style includes their leadership approach, decision-making process, and communication style. Conflict management skills, in turn, relate specifically to a manager’s ability to handle and resolve disagreements and disputes within the team. This includes the ability to listen actively, identify underlying issues, and facilitate open and respectful communication among team members.

But the concept goes deeper than that. In fact, there are five distinct conflict management styles that you should look out for:

• Accommodating. Managers prioritize maintaining harmony and relationships by accommodating the needs of others, even if it means sacrificing their own interests.
• Avoiding. Managers choose to ignore or evade conflicts, hoping they will resolve naturally. This can lead to unresolved issues and potential escalation.
• Compromising. Managers seek a middle ground and encourage both parties to make concessions to reach a mutually acceptable solution. This style is best for situations where immediate resolution is necessary.
• Competing. Managers assert their own interests and objectives without considering others. This can be effective in emergencies but may harm relationships and morale.
• Collaboration. Managers foster open communication and joint problem-solving, seeking win-win solutions that promote teamwork, trust, and long-term success.

Which conflict management style do you think would work best in your organization?

What is the best management style?

According to Gallup, one of the most critical choices that companies make is selecting their managers. However, they often make the wrong decision. In fact, Gallup’s research suggests that companies fail to pick candidates with the right management style a staggering 82% of the time.

Unfortunately, much of this is down to the fact that there is no one-size-fits-all best management style. In fact, the best approach depends on a variety of factors. This includes the organization’s culture, the nature of the tasks, the skills and preferences of employees, and the overall goals of the company.

It’s also important to understand that different situations may call for different management styles. For example, in a crisis or urgent situation, an autocratic management style with quick decision-making may be necessary. On the other hand, during periods of innovation and creativity, a more democratic or transformational style that encourages collaboration and idea-sharing might be more suitable.

The key to effective management is flexibility and adaptability. Great leaders are those who can recognize the unique needs of their team and adjust their management style accordingly. As a result, a combination of management styles, known as a situational or hybrid approach, can be beneficial in addressing different circumstances.

Ultimately, though, the best management leadership style is one that fosters a positive work environment, promotes employee engagement and development, and aligns with the organization’s values and objectives. It is a style that empowers employees, encourages open communication, and enables the team to achieve its full potential.

Management style examples

The following fictional examples demonstrate how different management styles can impact team dynamics and organizational culture.

• Authoritative. John is a no-nonsense manager who makes decisions quickly and expects his team to follow his directives without question. He is confident in his leadership and values efficiency above all else.
• Democratic. Sarah leads her team by encouraging open discussions and involving everyone in decision-making processes. This is because she values diverse opinions and believes that collaborative problem-solving leads to better outcomes.
• Laissez-faire. Alex is a hands-off manager who trusts his team’s expertise and allows them to work independently. Moreover, he believes in giving his employees the freedom to explore creative solutions and take ownership of their tasks.
• Transformational. Emma inspires her team with a compelling vision of the company’s future. She encourages them to embrace innovation and continuous improvement. She also fosters a culture of growth and empowers her employees to exceed their potential.
• Transactional. Mike uses a performance-based approach, offering bonuses and incentives for achieving specific sales targets. This is because he believes that setting clear goals and rewarding exceptional performance are key to motivating his team.
• Coaching. Lisa is a nurturing manager who invests time in understanding her team’s strengths and weaknesses. She also provides personalized feedback and mentoring to help each team member reach their full potential.

Management style interview questions

The key to hiring leaders with the right management skills comes down to asking the right management style interview questions. It’s important to ask questions that relate to a candidate’s leadership approach, problem-solving abilities, conflict management skills, and ability to motivate and inspire a team.

Here are a few management style interview questions that you can use:

• How do you approach decision-making as a manager? Can you provide an example of a challenging decision you had to make and how you handled it?
• How do you handle conflicts within your team?
• What strategies do you use to motivate and engage your team members? How do you ensure that individual goals align with overall team objectives?
• Can you describe a situation where you had to adapt your management style to address the unique needs of a team member or a project?
• How do you promote open communication and feedback within your team?
• Describe a time when you had to deal with a team member who was not meeting performance expectations. How did you address the issue, and what was the outcome?
• What steps do you take to foster a positive and inclusive work environment where team members feel valued and respected?
• Which techniques do you use to handle stress and pressure as a manager? How do you prevent stress from impacting your team’s morale?
• Can you share an example of a project you led where collaboration played a crucial role in achieving success? How did you encourage teamwork and cooperation?
• How do you stay updated with the latest management practices and trends to improve your leadership skills?

People-first tools for people-first teams

Ultimately, whatever management styles you decide might work best in your organization, it’s essential that you have access to the right tools and resources to identify and nurture the skills of your managers and drive organizational success.

Factorial offers a suite of people-first tools designed to help organizations identify, develop, and support their managers in creating positive and productive work environments.

For example, Factorial’s software provides a comprehensive range of advanced analytics and data-driven insights that you can use to identify patterns and trends in managerial behavior, facilitating a deeper understanding of each manager’s strengths and areas for improvement.

Moreover, through its intuitive interface, Factorial equips managers with the tools they need to effectively handle conflicts, foster open communication, and promote collaboration among team members. And the platform’s performance management features enable managers to set clear goals, provide continuous feedback, and track individual and team progress, promoting a culture of growth and accountability.

In addition, Factorial’s training and development resources offer tailored learning programs for managers, empowering them with the skills needed to navigate various leadership challenges and adapt their management style to different situations. From workshops on effective communication to a management style quiz and courses on conflict resolution, Factorial supports the continuous growth of managers as they evolve into inspiring and impactful leaders.

Finally, Factorial’s employee engagement and feedback tools, including engagement surveys and pulse surveys, help you gather valuable feedback from your workforce, empowering your employees to share their perspectives on your management and organizational culture. You can then use this information to enhance your management styles and create a working environment where your employees can thrive.