Management Styles: Their Effects on Organizational Performance

Economic globalization has motivated an increasing number of corporations and enterprises to set up branches and production facilities throughout the world. During this process, a manager's approach is considered to make a difference for the productivity of his or her staff, which partly contributes to the success of the company. Hence, many companies have realized that management style plays an important role, and they tend to take it into account while recruiting a manager. Currently, there is no one persuasive definition about management styles.

A common definition on the internet is “a management style is an overall method of leadership used by a manager. There are two sharply contrasting styles that will be broken down into smaller subsets: Autocratic and Permissive”(Rensselaer Polytechnic Institute, 2000).This definition demonstrates that management styles vary from individual to individual, and also generally points out two strikingly contrasting management styles. However, it cannot sufficiently illustrate the key factors that influence management styles. This essay will discuss these key factors, such as culture, gender, domain and cost of operating companies.

The first thing worth noting is that different cultures can lead to diverse management styles. Cultural difference frequently causes various approaches while managing the companies, but they may bring the similar consequences. For example, the father plays a role of incontrovertible authority in a Mexican family, managing and deciding the significant things. Children grow up in this patriarchy culture, and get used to relying on the people who are superordinate and respected by them to make decisions.

As a result, when they work under surveillance, they are not apt to take responsibility initiatively. In contrast, children growing up in the United States, experience less influence of paternal authority, since mother, who provides economic support to the family, can give a voice to the major things as father does. This kind of family pattern shows the importance of self-sufficiency.

Therefore, independence and individualism are long-honored in the United States society, and American employees tend to pursue a relatively free and relaxed working environment. Within two different cultures, Mexican executives make all decisions unilaterally for management, whereas American executives advocate a more permissive working environment.

Meanwhile, the loyalty of the former is more than the latter (Kras, 1989, cited in Morris and Pavett, 1992). Morris and Pavett (1992) furthered Kras’ research and found that productivity at American parent plant and its Mexican factory was equal, although there were striking differences between two managerial styles. The conclusion of above research was limited, because the study lacked a large representative sample, only focusing on a single multinational corporation (MNC) and its affiliated factory. Yet, it also implied that companies should adjust managerial styles to local cultures, so that productivity could be ensured effectively.

Accompanied with the remarkable increase of women leaders, it is considered that management styles vary with different genders. There exist two different views on this issue. On the one hand, it is believed that both genders can produce opposite management styles. According to the research carried out by Case (1988, cited in Ladegaard, 2011 p6), generally, male leaders in her study tended to be competitive and confrontational, which was reflected in their direct and task-oriented management styles, and they often played a dominant role in the organization.

But female leaders preferred to be collaborative and person-oriented, and they did well in lubricating human relationships. Also, the conclusion of the research argued that diverse management styles in both sexes could achieve the equal management effect, and women did not need to follow men’s management modes. Since the number of people involved in the research was only ten, it might lack representativeness.

A large-scale research project related to communicating at work had been implemented in New Zealand (Holmes and Stubbe, 2003, cited in Ladegaard, 2011 p6). On the basis of data collected from the project, Holmes (2006, cited in Ladegaard, 2011 p7) claimed that more similarities, compared to differences, could be in both sexes’ management styles. At present, male and female managers can face a variety of complicated problems working with their subordinates.

Rigidly conducting an exclusively male or exclusively female management style, may fail to inspire the potential of employees and promote the competitive power of enterprises. Particularly successful managers seem to be flexible and contextually sensitive; that is, when they get on with staff and assigns tasks, direct and indirect management styles can be effectively combined, creating a harmonious working atmosphere and admired by employees (Ladegaard, 2011).

Various domains are thought to have produced a variety of management styles. Business and nonbusiness organizations can be two main parts of social institutions, each of them has its own characteristics, and managers often need to adopt appropriate leadership styles to manage their staff according to the features of their areas. Bass and Valenzi (1974, cited in Chitayat & Venezia, 1984) defined five styles of leadership: direction, negotiation, consultation, participation, and delegation.

From the results of the study conducted by Chitayat and Venezia (1984), it could be found that direction style received more preferences from senior officials of nonbusiness organizations than business leaders, yet participation style experienced an opposite situation. A probable explanation for this conclusion is that nonbusiness organizations, e.g. government apparatus and military agencies, have strict rules and procedures, and that compels leaders to manage subordinates with a power way, namely, direction style.

However, business managers enjoy a relatively free working environment, and they may prefer to share ideas with their staff, which is deemed to have benefits for decision, that is, participation style.

Cost may be the essential factor that influences the company's business performance, and it is also thought to be another key factor causing unlike management styles. Human resource management may account for the efficiency of organization operation and affect the company's expenses. With the advancement of economy and technology, certain human resource management styles may be outdated, especially in manufacturing enterprises, possibly becoming an obstacle to the corporations of rapid development.

Therefore, the change appears to be indispensable, because cost-effective management approaches are being favored and admired. During the process, organization change can be the essential part. Employees are simply considered to be the role of handling the machine and unvalued in the traditional organization. However, the new organization advocates optimization that is based on cooperation, and acknowledges the value of employees as a valuable resource.

Moreover, the traditional organization tends to minimize assignment distribution, which encourages the specificity of personal work, and it can cause a problem in that employees fail to adapt themselves to changing circumstances. For instance, a new machine with different technologies is introduced, and employees may find their existing skills insufficient to handle it. Under this situation, top-down supervision and rigid procedures are necessary, and that shows a trend towards an autocratic managerial style. In contrast, the new organization stands for unfixed task grouping, and various skills are promoted.

To some extent, staff can deal with some special problems flexibly according to the change from internal or external environments. This increases the chance of communication between leaders and subordinates, and also amongst employees. Hence a participative management style can effectively match this articulated system (Cross, 1989). Besides, organization change needs the support of advanced technology and equipments, probably replacing large-scale artificial operation, and it may cause evident reduction of labor cost.

Finally, it is important that management styles need to be adjusted according to different cultures and working areas. To meet the enterprises’ expectations of profit maximization, learning the differences of various cultures can be conducive to finding out the optimal management methods for goals. Different working areas may require multiple management styles, and also there is no explicit boundary both sexes’ leaders should employ certain management styles.

Managers should be good at adjusting their managerial styles flexibly, in order to coordinate work and make staff competent for their assignments. In addition, both new technology and experience of predecessors can be used to assist executives in managing companies. The introduction of high-tech technology may ensure the timeliness and accuracy of information delivery, and experience inheriting from predecessors often provides effective methods to deal with certain difficult managerial problems.

In the future, there will be a variety of new management styles, while stereotypical management styles may fade. Meanwhile, managers should explore and analyze them from different perspectives, and prepare to meet the new challenges.

References

Chitayat, G. and Venezia, I. (1984) Determinants of Management Styles in Business and Nonbusiness Organizations. Journal of Applied Psychology, 69(3), pp. 437-447. Cross, M. (1989) Flexibility and Integration at the Workplace. Management Decision, 27(4), pp. 43-47. Ladegaard, H.(2011) ‘Doing power’ at work: Responding to male and female management styles in a global business corporation. Journal of Pragmatics, 43(1), pp. 4–19.

Morris, T. and Pavett, C. (1992) Management Style and Productivity in Two Cultures. Journal of International Business Studies, 23(1), pp. 169-179. Rensselaer Polytechnic Institute (2000) Management Styles. rpi.edu. Retrieved 28 August, 2013 from http://www.rpi.edu/dept/advising/free_enterprise/business_structures/management_styles.htm.