8 Management Styles in Business: Choosing the Best Fit

Written by Coursera • Updated on

Learn about the effectiveness of different management styles and how to determine which management style you should use in different situations.

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There are several unique leadership styles, and each one can help you find success as a leader when used in the right situation. Finding the management style that is most effective for you is also dependent upon many factors, such as your personality, your goals and needs, and the personalities of those you’re managing. Learn more about the three main management styles and how to figure out which is the best fit for your position.  

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What is a management style?

Indeed defines management style as “the methods a person uses to manage an individual, meeting, project, group of people, or organization” [1]. You might use one management style across all aspects of your job or shift from one to another based on various scenarios. How much work you need to do, how quickly you must complete the work, your company culture, your personality, and your team goals may all have an impact.  

Your management style helps those around you understand how you work, your expectations, and how to communicate with you. When you have a clear approach to management, your employees are typically more productive because they know what you expect from them (and what to expect from you).  

8 management styles (and when to use them)

As a leader, you have a choice of several management styles. Each has its particular characteristics, but you'll also find they overlap and share traits. You may also prefer to use a combination of styles rather than just one. Let's take a look at several in more detail:

1. Authoritative

Leaders take a unilateral, top-down decision-making approach in the authoritative or autocratic management style. Autocratic managers have clearly defined rules and manage rigid, structured environments. While this style can save time, boost efficiency, and reduce uncertainty, particularly in high-pressure or crisis situations, it also leaves little room for creativity or outside-the-box thinking. 

This style works when

  • There's time pressure

  • You're in a crisis situation

2. Democratic

A democratic manager encourages team participation and discussion when making decisions. This style benefits from bringing more diverse perspectives into the decision-making process while allowing team members to feel valued and engaged. This approach can enhance collaboration and creativity. It can also take more time and may increase the potential for conflict.

This style works when

  • Decisions don't involve private or confidential information

  • An organization wants to promote and develop talent from within

3. Laissez-faire

The laissez-faire management style is not quite a hands-off leadership approach, but it allows the manager to take a step back. Employees make their own decisions and work with little guidance or instruction. In turn, the manager can answer questions and help when necessary. This can boost employee motivation and creativity as part of a relaxed company culture, but it can also pose a challenge for employees needing more direct support (particularly new arrivals or those early in their careers). 

This style works when

  • An organization has a more relaxed company culture 

  • Employees are self-motivated or have been doing their jobs for a long time 

4. Transformational

Transformational leaders create an environment constantly changing to reach and exceed company goals. Managers inspire employees to push beyond their comfort zones by expanding their skills and expertise and taking on new projects to achieve a shared goal. This focus on lofty goals and long-term development often boosts innovation and intrinsic motivation but can also lead to burnout and can feel disruptive. 

This style works when

  • A company is values-driven

  • Employees are adaptable and willing to take calculated risks

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5. Collaborative

Collaboratively managed teams open up all ideas for discussion, with final decisions made by the majority preference rather than management alone. This style can improve employee morale while developing the leadership skills of future company leaders. Like the democratic style, this can be time-consuming. It's also possible to arrive at a majority decision that isn't right for the company. 

This style works when

  • There's open communication between managers and employees

  • There's a clear objective that could benefit from innovative ideas

6. Transactional

Transactional management rewards employees for reaching a goal with incentives like bonuses or stock options. Leveraging extrinsic motivation in this way can be effective when undesirable work needs to get done, but it can also discourage creativity and risk taking. When using this style, it's important to remember that intrinsic motivation has been shown to be stronger in the long run. 

This style works when

  • A project requires a fixed, linear process

  • Managing time-sensitive short-term goals

7. Coaching

When you take a coaching approach to leadership, you take on the role of a coach to your "team" of employees. This often means a focus on your team's long-term career development, even if that means more mistakes in the short term. A coaching style can create strong team bonds, encourage a culture of learning, and improve engagement. It can also lead to a toxic level of competition if taken too far.

This style works when

  • Teams are small, leaving time to connect one on one

  • Long-term progress is more important than short-term success

8. Visionary

If you have a vision for your company or team–and you're effective at communicating that vision to others–this leadership style could be a good fit. A compelling vision can inspire team members to put forth their best work while connecting the team through a collective purpose. This style can be effective in the right circumstances, but it might prove challenging for those who are more introverted or risk-averse.

This style works when

  • Experienced teams are good at managing themselves

  • A company or team needs to undergo change

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How to identify your management style

You can take several steps to discover how you prefer to manage. Start with these options:  

Trust your intuition.

Look inward and assess your personality, values, priorities, and goals. This will get you off to a good start in identifying your management style. Not only that, but intuition is an important skill for all managers, and practicing it can help make you a better leader. 

Consider your company culture.

It’s important to take the values of your organization into account when you are determining which management style fits you best. If your organization values collaboration, you may not want to take an autocratic approach to management. If your organization values fast growth, you may want to incorporate traits from the transformative management style into your leadership. 

Find a mentor.

Is there a leader within your organization who you admire? If so, asking if they can mentor you to help you refine your management style may be worth it. Hiring a business coach is another option. Leaders utilize business coaches for several reasons, and improving your management skills is one of them. If you don’t know where to look for a business coach, start by asking the leaders around you for recommendations. 

Take a leadership assessment.

Leadership assessments are a great way to help you get to know yourself better because they often remind you of characteristics you tend to forget or push to the side. They also highlight your strengths and opportunities for growth, allowing you to create a clear vision for developing into the leader you want to be. 

Take a course.

If you prefer a more formal approach to accessing and improving your management style, take a course led by an accomplished professional. Having a management course on your resume will also show your dedication to being a strong leader. 

Next steps

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Article sources

  1. Indeed. “8 Types of Management Styles for Effective Leadership” Accessed October 19, 2023.

Written by Coursera • Updated on

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