Whether you’re a first-time people manager or seasoned CEO, leading a team can have its challenges. For those running a digital agency, there’s sticking to a budget, delivering key materials on time and keeping your team engaged.
This requires figuring out your management style and embracing authentic leadership. How you lead can directly reflect on your individual performance, while impacting your organization’s productivity, company culture and retention. That goes double for anyone managing remote employees.
There’s plenty to be gained by defining your business management style. Leaders who deploy successful management styles can achieve heightened productivity, while also fostering higher work engagement and employee buy-in, according to a 2022 study published in PLOS One.
But which style of business management is right for you and your team? And are there any types that should be avoided at all costs? (Spoiler alert: yes.) Check out some of the most common business management styles, along with their perks and drawbacks. Then, read more about Wix Studio to see how you can collaborate more effectively at scale.
Common business management styles
Below find out what research and Angelo Valenti, PhD, consulting psychologist and owner of The Company Psychologist in Nashville, TN say about common management styles—and which ones to avoid.
01. Autocratic leadership
You’ll know one when you see one. An autocratic (or authoritarian) leader generally avoids feedback and seeks to maintain control over the organization. “This style involves centralized decision-making where the leader has full control,” Valenti says. This type of management might be most frequently found in manufacturing, he says, where strict efficiency and safety protocols need to be adhered to.
Pro: These leaders can “enable quick, decisive action in crisis situations or when dealing with inexperienced teams,” Valenti says. But it's not great for creative teams. (See our next point.)
Con: This leadership style can backfire over time as it “can lead to low morale, high turnover and missed opportunities for innovation from team input,” Valenti says.
02. Democratic leadership
On the other hand, democratic leaders often cast a net for insights from peers and employees alike. These “leaders involve team members in decision-making processes,” Valenti says. This style might be most often detected in consulting firms or creative agencies, as they benefit from “diverse expertise and ideas.”
Pro: Because these leaders foster communicative environments, workers can feel higher levels of buy-in to the overall mission or process. This style of management “increases job satisfaction, creativity and commitment to organizational goals.” (Learn more here: How to motivate creative teams.)
Con: While autocratic leaders may thrive in a crisis, democratic leaders can sometimes lag due to spending time surveying the team before making a decision. The style “can be time-consuming and may lead to decision paralysis in urgent situations,” Valenti says.
03. Transformational leadership
If you’re discussing a leadership style and names like Oprah Winfrey and Bill Gates come up, you know it’s time to take notice. Transformational leaders like Winfrey and Gates emphasize motivating teams to reach a shared goal. This style of leadership “focuses on inspiring and motivating employees to achieve extraordinary outcomes.” Perhaps unsurprisingly, tech and start-ups can respond positively to this type of management, Valenti says, since it can “drive innovation and adapt to rapid market changes.”
Pro: Transformational leadership “drives innovation, fosters strong organizational culture and develops future leaders.”
Con: These unicorns aren’t perfect. They “may neglect short-term operational details and can be less effective in stable, routine environments,” Valenti says.
04. Transactional leadership
Transactional leadership centers on crystallizing goals—and the necessary systems to accomplish them. They can also work toward mitigating role ambiguity, while offering incentives to the team. According to Villanova University researchers, transactional leaders prioritize goals, while providing clear reasons to support the mission. This style can be commonly found in sales departments.
Pro: Leaders who follow this style can be experts at clarifying role ambiguity, especially as it relates to reaching a goal.
Con: Transactional leaders might have a laser focus on reaching goals—but forget to check in with their teams. “Transactional leaders are often acutely focused on results only, with little to no interest in personal relationships,” said the Villanova researchers.
05. Situational leadership
This might be the most frequent style of leadership, as it requires managers to respond in real time to the people, events and context of any given situation. According to The Center for Leadership Studies, situational leadership is “a common-sense, contingency-based leadership model that consists of four common leadership styles,” which are telling, selling, participating and empowering. Any of these approaches might be used based on a range of factors like budget, team morale, goals and overall vision.
Pro: This style, particularly “participating,” can emphasize team buy-in, and result in enhanced morale over time, per The Center for Leadership Studies.
Con: Depending on the specific approach, leaders might need to remain quite involved in the work production, rather than delegating to focus on high-level issues, to ensure tasks are completed according to plan.
06. Pacesetting leadership
Ever have a boss who couldn’t move a project along until everything was just so? They may have been a pacesetter manager. According to Harvard Business Review [HBR], this style of leader holds themselves—and their teams—to impossible standards.
Pro: Sometimes a project really does need to be perfect, especially if you work in the medical field. HBR called out that legal teams also might adhere to this type of management for similar reasons.
Con: No one likes feeling like they can’t meet expectations, or worse, being set up to fail. Without careful attention, this type can fall into this trap.
07. Laissez-faire leadership
On the flip side of pacesetting leaders, laissez-faire managers can be frustratingly hands off. This style should be avoided, Valenti says, as it “can lead to a lack of direction, poor performance and team conflicts.”
Pro: If there’s one to be found here, it might be that some employees enjoy autonomy. But Valenti says this type should generally be avoided.
Cons: “It should be avoided in most situations as it can be interpreted as a lack of care or engagement from the leader,” Valenti says.
08. Micromanagement
Ah, micromanagers. Who doesn’t love the feeling of someone breathing down your neck? “This style stifles creativity, reduces productivity, and erodes trust,” Valenti says.
Pro: It’s hard to find a perk to micromanaging. Consider looking into styles like transformational leadership that inspire staffers to do their best work, so you can focus on yours.
Cons: Do we need to say it? “Micromanagement can lead to high-stress levels and turnover rates among employees,” Valenti says. It also makes it difficult to work efficiently at scale.
09. Narcissistic leadership
While there’s nothing wrong with being ambitious or focused on career growth, narcissistic leaders tend to prioritize their gains over the growth of the teams they manage, Valenti says.
Pro: Crickets. These leaders are better off harnessing their ambition into more productive styles, like democratic or transformational.
Con: These leaders can negatively impact team morale, and more broadly, company culture, Valenti says.
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