Management styles

Business Valuation Melbourne

All businesses need a manager. From corporations with multi-million-dollar turnovers to corner stores, if business is being done someone needs to manage it. Even a sole trader needs to be able to self-manage their time and productivity. If you own a business or are looking to start one you need to be ready to manage yourself and your team. But this all begs the question. What kind of manager should you be?

There are as many types of managers as there are people managing but we can categorize these types into four main categories. These are Autocratic, Laissez-Faire, Democratic, Collaborative and Results Based. Once you know the positives and negatives and which category works with your natural personality, you are one step closer to being the best manager you can be.


The word autocratic might have a lot of negative connotations but sometimes a business needs a strong leader. In this style of management, the manager acts more directly as the single authority. As a manager you are always the ultimate authority in the workplace, but the Autocratic manager places this fact front and centre. Staff members follow instructions and there is little to no room for two-way communication.

As previously stated, this approach has its uses. When decisions need to be made right in the moment and a top-down view is needed the Autocratic manager shines. They can focus a team's efforts towards a goal and make sure that all staff members are on task. This style takes someone that is not only confident but also knowledgeable about the businesses. Staff members will quickly lose patients with an autocratic manager that makes the wrong choice again and again.

This style of management does not work in every circumstance. If a manager is too controlling, staff members can become discontented. When the amount of staff an Autocrat manages grows too large their control can be stretched too thin and they can end up doing more harm than good.


This management style is perhaps the opposite to the Autocratic. As the name suggests a Laissez-Faire manager is very hands off and gives their staff a large amount of freedom in how they complete their work, letting them find their own way to get the work done. While ultimately authority still rests with the manager, staff members will not feel the effects of this on a day to day basis.

This form of management might at first look too gentle but there are many different situations where it can work wonders. When working with a highly skilled and motivated group of people this manager is able to step back and let their staff do what they do best. In this system staff members are able to find their own ways and don't need to contend with an overreaching manager.

Just like the Autocratic system, the Laissez-Faire management system does have its drawbacks. More than any other type of management it lives and dies based on the quality of staff. If employees are not motivated or not working at the level they need to be, the Laissez-Faire style of manager is ill equipped to change things.


Like the Laissez-Faire manager the Democratic manager works very differently to the Autocrat. This style looks to build a consensus between staff members when big directions are made. This manager will always ask the opinions of their staff and more than just that actually take these opinions into consideration. While different opinions are taken into consideration the manager still retains power over the final decision.

Employees under this manager will feel empowered and feel like their opinions matter. This leads to a staff base that is more invested in the work they are doing and the financial health of the business they work for. These employees will often be able to solve minor issues between themselves as they are more experienced with explaining their ideas and putting them into practice.

This style can also lead to employees feeling left out if only certain members of staff are listened to. This can lead to disagreements and even disengagement from the quieter staff members.


This style of management is almost an extension of the Democratic one. While the Democratic manager might encourage participation from their staff the Collaborative manager demands it. This makes every decision a totally collaborative one that has been built on everyone's opinions.

Like the Democratic style, Collaborative management will involve all staff in how the business they work for is run. This increases their investment in their company and can help them to see the outcomes of their work.

Unlike the Democratic style the Collaborative style limits staff’s feelings of being left out of the decisions. It does not create a situation where only a few voices are being heard but can actually create the opposite issue. Some staff members will feel pressured to give their opinion even when they do not feel confident in it.

Results Based

This style of management is closest to the Laissez-Faire approach. The only thing that a Results Based manager is interested in are the concrete results of the work that their staff complete. This manager will often use KPIs and other metrics to ensure that everyone has a view of what work is being done and who work is affecting the business.

This style gives staff clear targets and goals. They know what outcomes they need to reach and in most cases, will be able to find the approach to reaching that outcome that works for them. With clear goals to hit and targets to beat each employee knows what they need to be doing at any given moment.

The Results Based approach can also lead to high levels of pressure. Staff members unable to reach their goals can become discouraged when they do not meet their targets. This often leads them to perform at a less than optimal level and damage the productivity of the business. The manager must also have a plan when goals are not reached that help their staff members to succeed.


At the end of the day what management style you choose depends on who you are as a person and the type of business you are running. You need to find what works best for you and most importantly don't be afraid to experiment. If your current style of management is not working, try something else and find what fits your situation the best.

It is also important to have a comprehensive view of your business. The business valuation services that we conduct can calculate the value of your business and show you all you need to know.