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Leadership Styles

Business Management and Enterprise (Year 12) - People (U4)

Le Thanh Thao

Management style refers to the way that managers work to fulfil their goals and to maximise the prosperity of the enterprises. 

Management style can vary depending on the company’s values and vision, level of management, industry, country, culture and also the personality of the managers themselves. 

The most effective manager is someone who can adjust themselves and respond to different factors and different situations with appropriate style, while keeping their focus on successfully achieving targets. 

Management style can also be affected by both internal factors and external factors.

Internal factors included: 

  • The overall organisational and corporate culture of the company. 

  • Policies

  • Priorities 

  • Employee engagement

  • Staff skill levels 

External factors included: 

  • Employment Laws/FairWork Act 

  • The economy

  • Competitors

  • Suppliers

  • Consumers 

Autocratic leadership

Autocratic or authoritarian leadership refers to the leadership or management style that leaders have complete control over decision making. 


  • Ensure faster decision making: there is a few levels if administration and hierarchy that you inform before implementing the decision. This ensure faster decision mahjong, especially in high-stress situations that demand an immediate resolution. 

  • Enhance workplace communication: This management style promotes one-way communications and ensures the information reaches the right audience. Therefore, this makes sure there is not much noisy information communicated from various channels. 

  • Reduce employee stress: Leaders will fully take responsibility for their work and reduce the workload and pressure from the employees. 

  • Provide results from inexperienced team: Employees can benefit from the competency offered by the leaders and replicate productivity by using the leader’s knowledge. 


  • Result in micromanagement: an autocratic leader typically supervises small details of the work their team members are performing, resulting in micromanagement and thus reducing productivity. 

  • Create dependency on the skills of the leader: Autocratic leadership might discourage feedback from team members, and can leak to less creativity and innovation. 

  • Create a high-pressure working environment: Autocratic leaders make most of the decisions. Therefore, they might feel overwhelmed and stressful, it can affect the rest of the team as no member can perform the role of the decision maker. 

  • Lowers employee morale: Another disadvantage of this is it can reduce employee morale. This is because autocratic leaders rarely value or seek input from others. This may leave their team members disheartened because they did not feel any recognition. 

Persuasive leadership

Persuasive leadership means that persuasive managers hold control of the decision-making, but they work to help employees understand why the decisions made by management are best for the company. 


  • Help to better the communication: managers who use this style are often skilled communicators who effectively convey their ideas to the employees. This can lead to a better understanding and clarity of expectations, resulting in higher productivity and engagement. 

  • Increase motivation and engagement: By persuading employees to buy into a particular vision or objective, managers can help to foster a sense of ownership and pride in their work. 

  • Create positive workplace culture: by using persuasive communication and focusing on collaboration and teamwork, a persuasive management style can help to create a positive workplace culture. 

  • Better communication: This can help employees feel more valued as they can get to understand the morale behind the decisions and get to know about the decision making process. 


  • Lack of diversity: A persuasive management style can sometimes disencourage employees to share their ideas and perspective. This is also a part of autocratic management style, which is only utilise one-way communication. 

  • Resistance from employees: Some employees may resist persuasion, particularly if they feel their autonomy is being threatened. If the persuasive tactics are too forceful, it can lead to employee resentment and disengagement. 

  • Ineffective communication: While persuasive management style can be effective in certain situations, it can also lead to ineffective communication if the managers are not skillful in explaining. This can lead to misinterpretation and confusion among employees. 

  • Short-term focus: Managers who rely on persuasion may focus more on a short-term goal than a long-term goal. This can lead to lack of strategic vision and planning. 

Consultative Leadership

Consultative leaders assume their teams has the capability and knowledge to excel at their job. While the leader has the authority to make the final decision, they prefer to listen to the team members’ viewpoints before acting. 


  • Create deeper bonds among leaders and their subordinates: Increase employee engagement as team members are often consulted and feel respected. 

  • Creates a sense of involvement: When employees get asked for their input, it encourages them to voice their opinions more regularly.

  • Improves quality of decisions as it considers input from many perspectives. 

  • Different creative ideas may be generated during the decision-making process as people feel safe to voice their opinions. 


  • Time-consuming as it involves many rounds of meetings. This style is less effective for urgent tasks. 

  • Sense of insecurity: Manages conflicting opinions, which results in some people being unhappy with final decisions. 

  • Slow in decision-making as it is sometimes difficult to arrive at a consensus. 

Participative Leadership

Participative leaders normally involve their entire team into the decision-making process. When conducting meetings the leader takes a hands-off approach and acts more like facilitators and letting employees open up and do the talking. 


  • Engaging employees in decision-making processes help companies get various perspectives and this leads to better and quicker problem-solving. 

  • Such leadership motivates employees, makes them feel valued at their workplaces, and increases the employee retention rate. 

  • It also increases job satisfaction among the employees, enabling the company to attract better talent. 

  • Teams more readily accept decisions: Knowing that each team member contributed to the decision-making process makes employees feel more confident about the final outcome. 


  • Involving all employees in the decision-making process can be time-consuming and tedious: it slows down the decision-making process. 

  • This kind of leadership is difficult to implement in a hierarchical or bureaucratic organisational structure. 

  • Diminish quality of expertise: if you have a specialist on your team with valuable insight regarding the decision, their knowledge maybe drowned by the opinions of others

  • Require employee participation: participative management only works if employees are willing to engage. Employees may not want to voice their opinion for a variety of reasons.  

Laissez-Faire Leadership

Laissez-Faire leaders have an attitude of trust and reliance on their employees. They don’t micromanage or get too involved, they don’t give too much instruction or guidance. Instead, they let their employees use their creativity, resources and experience to help them meet their goals. They only give guidance and take responsibility when needed, they give the subordinates and team members the real lead. 


  • Higher retention: Employees who are trusted feel confident in their work and want to stick around in an environment that makes them feel relaxed and relied on. 

  • Accountability: This is a great way to ensure that they do the best they can - ultimately they are on the line for their project, so they want to do the best job possible. 

  • Relaxed company culture: People don’t feel micromanaged or that a manager is constantly looking over their shoulder. This helps them relax, enjoy their work and interacts well with their peers. 

  • Creative environment: Employees feel they have permission and authority to try new things, think outside the box. 

  • Motivation for employees: They are motivated by their own thoughts and ideas, they know they have autonomy over their part of the project and feel excited about showing what they can do. 


  • Difficult for newcomers: Newcomers often need more direction and instruction than this style of leadership allows, making it harder for them to adjust. (Imagine starting a job and being left alone to do your role!)

  • Confusion about who is in charge: Sometimes more dominant personality employees will try and take charge, creating miscommunication and issues. 

  • Lack of structure and support: This leadership style is very hands-off, so there is not often a set plan, check-in meetings, group organisation, etc. This sometimes is difficult for team members to navigate through. 

  • Problematic for groups: It is a very individual-based leadership style, so groups may not be able to work well together in this setting. 

  • Responsibility avoiding: Sometimes employees will try to pass accountability back onto the managers or other employees because they say they did not understand the goal and the requirements. It is also difficult for groups and teams to take responsibility because it is very individual. 

  • Leaders can seem uninvolved: Sometimes, leaders of this style can be difficult on morale because leaders may seem uninvolved. Employees want recognition for their work and if the leaders are not involved, can lead the employees to the wrong way. 

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