The 11 Most Important Management Theories For Small Business
There are many management theories floating around in the business world. Some a...
Modern leadership theories tell us that great leaders aren’t born, they’re built. Can you learn the skills necessary to guide your team to greatness? Absolutely.
In this article, we’ll introduce you to the major leadership theories and styles so you can identify, develop, and perfect your unique approach to managing a team.
Leadership theories are principles that explain how and why certain individuals become leaders.
These theories also seek to uncover the traits and behaviors that give great managers their je ne sais quoi. All with the purpose of giving others the opportunity to learn about and build their own leadership skills.
As we’ll discuss, there is no perfect leadership theory. Different situations call for different tactics and styles, and not every employee will respond to each in the same way.
That’s why it’s so important to practice each of these theories and learn when it’s appropriate to implement each one.
With time and attention, you can master these skills and learn how to better lead your team, rather than falling back on your innate personality traits and hoping for the best.
As the name suggests, this set of leadership theories is rooted in behaviorism and focuses on a person’s actions and behaviors rather than their mental qualities or internal state of mind.
The behavioral leadership theory is the strongest proponent of the idea that individuals can learn to become a great leader through observation and practice.
It often lies in direct opposition to one of the other leadership theories on this list — the “Great Man” principle — but has, in recent years, rightly come to overshadow and debunk this outdated holdover from the 20th century.
More on the “Great Man” theory later on in this article.
Contingency leadership theories posit that there is no one right way to manage every situation. Instead, contingency theory focuses on specific environmental variables that can help managers determine which type of leadership best suits their team.
This theory suggests that striking a balance between behaviors, needs, and context leads to success.
Truly effective contingency leaders don’t focus on their own qualities, but on creating a balance between the needs of their direct reports, the situation at hand, and the behaviors they and their team exhibit.
As we mentioned earlier, the “Great Man” theory of leadership has largely fallen out of favor because it holds that great leaders are born with the requisite skills — e.g., charisma, confidence, intelligence, etc. — already present in their makeup.
This group of leadership theories suggests that people can’t learn how to become strong leaders — they’ve either got it, or they don’t.
In many ways, the body of evidence amassed over the past few decades and represented by the other seven leadership theories on this list has shown that the “Great Man” theory is not only false but wildly biased.
Not to mention its wild exclusivity and failure to include other groups of people who are, obviously, very capable of being great leaders.
Management leadership theories — also known as transactional leadership theories — emphasize the role of supervision, organization, group performance, and a system of rewards and punishments to get things done.
In many ways, the management theory is the foundation of modern business management.
When employees are successful or exceed expectations, management rewards them in some way. When employees fail or fall short, management punishes (e.g., reprimands) them in some way.
This group of theories relies on the basis that employees are mostly extrinsically motivated by things like pay and benefits, rather than internally motivated.
Management leadership theory style can often be effective in the short term, but the results may fizzle out in the long term.
Participative leadership theories revolve around the idea that great leaders take into account the input of others.
For example, managers who operate with the participative theory in mind encourage contributions from the team with the goal of helping them feel more relevant and part of the decision-making process.
That doesn’t necessarily mean that participative leadership is more democratic than other theories on this list — managers can still choose to allow or implement input as they see fit — but it does place more of an emphasis on team participation.
This kind of collaboration can lead to increased employee engagement, which is an essential element of employee retention.
Relationship leadership theories — a.k.a. Transformational Theory — places greater value on the connections that a leader forms with the members of their team.
Transformational leaders motivate, inspire, and direct employees by making sure that everyone understands the importance and higher good of the task at hand.
Managers that approach leadership in this way are often concerned with the performance of the team as a whole but also want every individual to realize and fulfill their full potential.
Situational leadership theories suggest that managers choose the best course of action based on the situation at hand.
As such, a different style of leadership may be more appropriate for certain types of decision-making events.
For example, if the group leader is the most knowledgeable, they might choose to adopt an autocratic style.
If, on the other hand, the group is made up of experts, the leader might choose to adopt a participative style (more on autocratic and participative styles later in this article).
Trait leadership theories posit that good management skills come down to particular personality traits, such as self-confidence and courage.
In some ways, Trait theory is similar to the “Great Man” theory mentioned earlier, but without the all-or-nothing aspect. You can be born with certain traits that make for a great leader, but you can also develop those skills through practice and repetition.
The leadership theories mentioned above give rise to several general categories of leadership styles, which, in turn, produce a wide variety of more specific named styles.
For more information on these specific named styles, take a few minutes to read this article from the Sling blog: 14 Types Of Management Styles For Effective Leadership.
The autocratic leadership style holds strong, centralized control from a single source of authority as its foundation.
In this style, orders flow from the top down, team members do not have the option to give input, and they are expected to comply without complaint.
A manager working under the autocratic style typically motivates their direct reports through rewards and penalties (e.g., the Management leadership theories) and has a tendency to get a lot done in times of crisis or when immediate action is required.
When exercised all the time, the autocratic style can cause employees to fear or dislike management and creates poor employee/employer relationships.
In a consultative leadership style, managers encourage two-way communication between them and their direct reports (as opposed to the top-down-only communication in the autocratic style).
Consultative managers will often hold discussions with team members to hear their opinions and get their input prior to finalizing a decision on their own.
Because this style adds a step for the manager — i.e., consulting with the team — it can slow the deliberation process and delay the implementation of important changes.
In the right context or situation, a consultative leadership style is an effective way to involve team members in the broader activities of the business. Used too often, though, it can cost your company time and money.
A participative leadership style promotes employee empowerment and involves all team members in the direction of the project or the business as a whole.
It also encourages each employee to be more self-directed and intrinsically motivated rather than depend on direction from others and external rewards.
Participative styles are frequently adopted by businesses with employees whose abilities and skills are on the same level.
A persuasive leadership style is characterized by strong, centralized control that makes decisions for the business. Persuasive leaders, though, take the time to invite questions rather than passing down ultimatums.
Similarly, once persuasive leaders come to a conclusion, they will discuss with the team members the basis for the decision-making process.
As a busy manager, it can be extremely difficult to find time to work on yourself, implement these leadership theories, and improve the way you work.
Like we mentioned above, there is no single best leadership theory. Every business, group, and individual will need a deliberate approach. That’s why it’s so important to find time to dedicate to learning and practicing these theories.
That’s where tools like Sling come in.
Sling is a software suite whose sole purpose is to streamline and simplify every aspect of your workforce management, all with the goal of giving you more time to work on discovering which of the major leadership theories is right for you.
Use the time you get back from automating your management tasks to work on your skills and build an even better team. You, your customers, and your employees will be glad you did.