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Kurt Lewin classified management styles and cultures into three categories - autocratic, democratic and laissez-faire. He conducted an experiment on a group of children who were guided by leaders, following the three leadership styles. He concluded, at the end of the experiment, that the democratic leadership style is the most effective one as all the group members participated in the final decision-making process.

Democratic Leadership

A participative leadership style is a very essential aspect of today's business sector. This style creates and maintains healthy relationships between the employees and the leader. This is probably the best type of corporate leadership style, that necessarily allows employees to give suggestions and take some of the crucial decisions, along with their manager. However, the final decision rests on the manager.

As the name indicates, a participative leader enables the employees to play a major part in any decision-making process, which makes employee performance better. Therefore, instead of the leader just throwing direct, stringent orders to the employees, he acts like a guide and a mentor to the employees, helping them in achieving their goals. So, it is like 'let us do...' rather than 'I want you to do... '.

The Other Styles

Apart from democratic style, there are two more leadership styles that are defined.

In a group led by an autocratic leader, the team members have no say in any of the decisions that are taken by the management. The views of the members are not even considered most of the time. The members might feel bossed as they are continuously told what is to be done. The productivity of the members might suffer.

Delegative (laissez-faire) leadership style is the one in which the decisions are taken by the employees while the leader is held responsible for the decisions that are taken. The employees themselves assess the situation and plan the line of action. However, with too much freedom given, deviation from work might take place.

The participative leadership style is considered to be the most balanced one. It increases manpower productivity, while giving the freedom of expression at the same time.

Benefits
  • The team members are encouraged to share their thoughts and participate in making critical decisions.
  • This increase in participation of the employees, makes them feel more driven to work, thus increasing the company's output.
  • The main advantage is that this technique promotes the development of potential leaders, amongst the team members.
  • There are many minds involved in the decision-making process, and hence the decision is certainly well-thought upon from all angles, ruling out the possibilities of taking a wrong decision.
  • With the involvement of so many people, a lot of alternative ideas can be generated. These ideas may prove to be beneficial in increasing the output efficiency.
  • The creativity aspect of the employees' personalities is also tapped, thus increasing the quality of ideas that are put forth by them.
  • It gives the employees more than one reason to stay back in the firm, thus increasing the retention rate.
Downsides
  • The theory of collective decision-making might slow down the process of achieving targets. It requires time for the brainstorming sessions to take place. Also, the participants of the sessions also need time to deliberate and come to an unanimous decision.
  • Secrecy of the information that is shared and the decision that is taken cannot be guaranteed. If the project is of utmost importance to the company and the related information needs to be safeguarded, this style of leadership might not work in the favor of the company.
  • This leadership style might not work for companies that have huge manpower. To involve so many people in the decision-making process, is not practically possible.
  • If the project requires extensive knowledge in a particular area, the involvement of employees with no/less knowledge in the field will be of no use for the company. Instead, the entire decision-making process will be further delayed.
Examples

Both Lewin's and Likert's participative leadership models and theories focus on the primary aim of getting the team members involved in the decision-making procedure.

Where participative leadership works...
Let us consider a small firm which is in the business of taking outsourced marketing projects. A particular team 'A' consists of thirty members excluding their leader/manager. The team has been assigned the task of initially presenting a rough draft of an AIDS awareness campaign to the client, and then eventually to take the project to its completion stage. The manager calls for a team meeting, where he discusses the clients needs and allocated budget plan for the same. The team members are asked to share their ideas and thoughts about the project. After conducting several brainstorming meetings, a rough draft is created by mutual consent, and the same is presented to the client. After client's approval, the entire team works on completing the project and making it a success. The employees show increased enthusiasm and determination towards their job responsibilities. The manager is also satisfied as the targets are achieved and the project is implemented successfully.

In such situations the participative leadership works best in favor of the company, and also that of the employees.

Where participative leadership doesn't work...
Let us take an example of a manufacturing unit with thousands of employees. The unit is a subset of a multinational firm. The plant/unit is given the target of producing around 100 cars per week. It is practically impossible to take the consent of each and every employee, who works in the plant, for finalizing the production schedule as the manpower number is huge. In such cases, usually the middle and the top management employees are involved in making the decision. The decision that is taken, is then passed down to the lower management and the worker class.

In such cases, this style of leadership does not come handy. If implemented, the entire decision-making process might get hampered, thus increasing the waiting time and production cost.

If this leadership style is adopted by managers, the employees are more likely to use their skills and capabilities to the fullest. With this technique of effective leadership, it is certain that the employee output would increase substantially.