There are factors, which affect leadership styles. Firstly, what tradition do you want to establish? There are Firms like Nissan, which build up a certain culture in some factories right from the beginning. So, tradition is an important factor, which can indicate a Style.
Secondly, you need to know the type of workforce you employ. A highly skilled workforce might be most productive when their opinions are sought, democratic leadership might be appropriate.
Thirdly, the size of the group. You have to consider that communication decreases the bigger a group becomes. In this case democratic leadership styles can lead to confusion.
Fourthly, leader and group personality are important. There are managers who can do well with a certain leadership style, but do not well in another. Some employees are not keen on making decisions, they think this is the managers´ task. Some people prefer to be directed rather than contribute, either because of lack of interest or because they hesitate to talk to managers. In this case an autocratic leadership style is more likely to make effective decisions
Last but not least, time is an important factor. The time available to complete a task might influence the style adopted.
When establishing a new company, one of the most important questions is, which style do we want to give the company. First of all you must take a look at the environment. This can already indicate which style is appropriate. In essence, you have to look at the market. Is it fast growing or slowly? Even more important is the situation in the economy. Is there a recession? If there is a recession it is not appropriate to set up a democratic management style, because it is obvious that there has to be a strong leader who can lead his company through crises. He has to watch the market carefully, has to react quickly to any threatened crises and he needs to decide quickly. Worker are likely to panic when there is a crisis, so the leader must give out clear targets and has to say what exactly he wants the workforce to do in order to manage the crisis. There is no time to consult employees before making each decision. Employees often look for a strong leader to tell them what to do. The leader has to be a role model for the workforce, he must be competent and he must not show any sings of threat. However, if the situation does not require a strong leader who decides alone, the autocratic style can easily lead to dissatisfaction among the labour. This results in little cohesion, the need for high levels of supervision and poor levers of motivation amongst employees.
A good example for a need of a strong leader is the Second World War, during the crises and threat of it, Britain had Winston Churchill as leader, but as the war ended people did not re-elected him, because there was no need for him.
So one can say that autocratic leaderships are only required when there is an emergency, like recession, sales decreases and increasingly strong competition.
Another important question is, whether the company has much time to establish. If there is not much time available, there should not be a democratic Management Style, because it needs more time to make decisions.
However, if the economy is stabile, a democratic Style is appropriate. Some authority can be delegated to supervisors, team leaders and Junior Manager, this is called Empowerment.
Nowadays, manager must conform to the workforce in order to be successful, at least at a certain degree. It does not mean that workforce should take over management. Well skilled employees should not be treated autocratically for a long time, because they can not develop their creative abilities. They should work under a democratic style, because they can have important opinions, which can increase productivity.
Another important thing, which has to be considered, is how great is the size of the company. If it is a small company, communication is not too difficult and a democratic leadership might be the right one. However, if the company is widely spread, that means great size, many branches, possibly spread over continents, communication is quite difficult and consultations with every person is almost impossible. A democratic style can hardly lead to success. An autocratic style is more appropriate.
To sum up one can say, that there is no manager who is totally autocratic or totally democratic. There should be a certain degree. It all depends on the time-, task-, tradition-, type- and personality factors. These can be helpful to indicate the appropriate management style. A manager should be flexible and should change the degree between autocratic and democratic if necessary.
Democratic Management style might sound better to the workforce, but it is hard for a great company to use this style because it is quite hard consult every one. However, if the company delegates the responsibility and empowers each branch, it can lead to a success. Bill Gates´ Microsoft has started with the order: ”create brilliant software”
Nowadays, almost everyone has Microsoft software.
Autocratic style is more an emergency management style. It surely can lead to success, but I think only over the short term. Workers do not feel good in an autocratic regime, and there is only one-way, top-down communication, which makes feedback impossible.
Other management styles like paternalistic style or laissez-faire are in essence autocratic and democratic in a certain degree. However they tend to be more autocratic.
However Management Styles certainly do matter. I have to emphasise, that it is styles. Styles have to conform to the external and internal situation. It would be foolish if a company kept the same style even through crises and good times.
