How Do Different Management Styles Stack Up in the Profit Margins?

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Management can either make or break a company. After all, it plays a major role in organically optimizing productivity to motivate and mobilize employees. So, we can safely say that good managers also have a hand in a company’s success.

Employees are far more likely to give positive results when they believe management listens to them and is on their side. In this way, good management ensures each employee’s goals are in line with their company’s objectives. They also bear the responsibility of helping employees grow and utilize their skills in order to meet business targets.

Different managers utilize radically different styles, which can affect workplace communication in varying ways. You might be wondering what they are and how they affect company profits. This blog post is a detailed guide to comparing management styles.

Defining Management Styles

In simple words, a management style is a way a manager or supervisor plans, organizes, and makes decisions. Each person utilizes it differently when it comes to getting employees to align with the company’s goals and extracting the best out of them.

That being said, the chosen style can make a substantial difference in how management delegates, communicates, and ensures profits for a business. Utilizing them optimally can guarantee employees are satisfied with their job and deliver their best. On the other hand, bad management can create friction between them and the staff. This scenario can prove to be detrimental to employee retention.

Management styles usually vary depending on the company’s goals, level of management, industry and corporate culture. The individual’s personality also impacts how they manage employees to work together as a single unit. That being said, the most effective managers use a wide range of styles properly and according to the situation.

If we compare management styles, it can help us better understand how to utilize them as effectively as possible. Here are some of them:

Autocratic Management Styles

One of the most popularly known leadership styles, autocratic management utilizes a top-down approach. It entails having managers exercise centralized and strong authoritative control over their staff. As a result, communication only flows one-sided, and so are most of the decisions.

Unfortunately, autocratic styles of management rarely entertain employee concerns and ideas. Due to this lack of communication, they use external factors like rewards and penalties to mobilize and motivate their staff.

an authoritative manager giving orders to employees

Employees are expected to follow orders to a T each time without questioning management. This usually means that managers monitor staff without trusting them. They even resort to micromanagement as part of their constant supervision.

It’s safe to say that the autocratic leadership style has a lot of shortcomings. After all, centralized control and micromanagement tactics can increase employee dissatisfaction marginally. This often results in a lack of employee engagement, an ‘us’ vs. ‘them’ mentality, and higher turnover rates. However, the worst downside is that workers refuse to align themselves with the company’s benefits.

The command-and-flow style can prove to be beneficial in a time of crisis when you need rapid action. That’s because it enables management to make decisions quickly. It also helps them clearly map out roles and expectations. This can especially be helpful when it comes to ensuring that larger teams work without uncertainty.

Consultative Management Styles

When it comes to comparing management styles, it’s hard to leave out the consultative style. Unlike the authoritative style, this method encourages two-way communication between management and staff while still calling all the shots.

The consultative management style focuses on team-building and encourages consultation from employees in making decisions. They utilize their ideas, suggestions, and knowledge to make informed strategies. However, at the end of the day, the decision-making process rests in management’s hands.

The best part about the consultative management style is that managers encourage an open-door policy. As a result, they constantly hold discussions with team members about their opinions. This makes employees feel heard, valued, and respected.

By and large, consultative management styles are heralded for being effective in employee retention and satisfaction, as well as in aligning team members with company goals. However, it’s not without its drawbacks.

The biggest drawback of this management style is that it’s time intensive. This can prove to be a problem if managers are not skilled in time management.

Persuasive Management Styles

Persuasive leadership is often left out of discussion despite being an effective management style in the right circumstances. It bears resemblance to the authoritative style because it allows management to make all the decisions. However, the approach method and execution are significantly different.

Persuasive management styles call for managers to influence and convince their staff to move forward in the best way. So, instead of just giving orders, management explains the decision-making process behind their policies to convince employees that it is for their best.

This can be beneficial in some circumstances, such as when management knows about the subject better than employees. They understand why the policy is beneficial, and they can explain it in detail.

Another great benefit to this style is that it enables managers to establish a higher level of trust between them and staff. In this way, it won’t lead to friction that derails employee satisfaction. Employees will eventually grow frustrated when they aren’t invited to give feedback or solutions.

Democratic or Participative Management Styles

When comparing management styles, it’s difficult to leave the democratic style out.

More commonly known as the participative management style, this leadership method actively involves employees in the decision-making processes. Managers spread the authority to all members of the staff and invite them to the table for discussion. They present issues and goals to the employees and come to a final decision with their input.

Companies that conduct participative management styles encourage conversation and participation on all levels. It has become a popular and widely used management style with a variety of industries utilizing its elements.

The reason behind this is that the management style helps employees make meaningful contributions. This makes them feel valued and empowered. As a result, they respond with enthusiasm, and it increases their motivation. In addition, when employees feel like a more integral part of the company, it ensures they work harder to help meet corporate goals.

That’s not all, because it is also known for its benefits in polishing employee skills and helping them tap into their potential. However, like other management styles, it also has its downsides.

One of the biggest flaws of participative management styles is that it’s a slow process. Involving employees in the discussion can be time-intensive, especially when you make decisions with them. In some cases, louder and more assertive employees take charge completely. This can cause resentment, especially when it comes to less-assertive staff. Moreover, it can be risky to invite staff into every discussion in industries with trade secrets.

It’s why most companies prefer to use aspects of this management style instead of implementing it completely.

Did this comparison of management styles help you understand which one your company employs? Having seminars about management styles is a great way to create a better working environment for your employees. Moreover, it also helps you ensure you can meet company goals more effectively.

You can hire motivational business speakers for delivering motivating and inspiring speeches during conferences.

Steve Gilliland, a Hall of Fame motivational speaker, provides insightful tips on management while relating to the audience with his incredible wit and humor. He packs a lot of information in a humorous speech that can benefit management as well as employees. As a matter of fact, Steve Gilliland has helped hundreds of companies improve their employee satisfaction and retention rate as well as curtail employee turnover numbers.

Build your employees’ inner power with motivational and inspirational speaker Steve Gilliland. You can also view his online resources, including Motivation Bites. Follow this link to book Steve today for your company meetings and conferences.

Steve, you have proven yourself a man of rare approach, able to put across a powerful message in a captivating way. You have the unique ability to craft your message to be easily understood while making a fun, humorous, and memorable experience. It has been days since our conference, but we are still hearing comments from attendees like, ‘he was the best speaker I’ve heard’ and ‘Steve was a fantastic presenter with knowledge, humor and enthusiasm — the time flew by’ and ‘Bring this guy back!’”  – Lisa Brannan, Co-President, KHRMA