Likert’s management systems were developed by American social psychologist Rensis Likert. Likert’s management systems are a series of leadership theories based on the study of various organizational dynamics and characteristics. Likert proposed four systems of management, which can also be thought of as leadership styles: Exploitative authoritative, Benevolent authoritative, Consultative, Participative.
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Understanding Likert’s management systems
During the 1960s, Likert distributed questionnaires to managers from 200 organizations to study patterns in leadership style.
Specifically, Likert evaluated management performance by determining whether leaders could extract higher productivity levels from their subordinates.
He discovered that greater organizational efficiency occurred when managers applied a general supervision style and focused on building relationships.
These managers were defined as employee-centered.
Conversely, managers who maintained the constant pressure of production through a focus on tasks were said to be job-centered.
Likert and his colleagues argued traditional methods for measuring bottom-line performance ignored the human component.
As a result, they emphasized the need to consider both human resources and capital resources as assets requiring proper management.
More broadly, Likert’s work made it possible to quantify the research many other theorists were doing into group dynamics at the time.
Likert’s four systems of management
Likert proposed four systems of management, which can also be thought of as leadership styles.
Each describes the relationships, involvement, and roles of managers and subordinates in an industrial setting:
Exploitative authoritative
In this system, responsibility and power lie in the upper echelons of the management hierarchy.
Superiors have no trust or confidence in subordinates, with decisions imposed on the latter with no scope for discussion.
Motivation is based on threats and fear and management is highly task-oriented.
Benevolent authoritative
Authority and decision-making ability remains with upper management, but subordinates are motivated by rewards.
As a natural consequence, leaders have condescending confidence and trust in their subordinates similar to a master-servant relationship.
Benevolence also means a limited number of decisions are allowed to be made by middle or lower management.
Consultative
This system of leadership uses rewards, autonomy, and participatory teamwork as the basis for motivation.
Management has substantial but not total confidence in subordinates, with some degree of horizontal and vertical communication.
Employees are involved during some decision-making processes – particularly if decisions are likely to make a significant impact on them.
Participative
Likert considered this system to be the most satisfying for employees.
Superiors have full confidence in subordinates and encourage them to participate in group-based decision making – which also serves as a motivational driver.
Two-way communication is also prevalent as the subordinate feels empowered to discuss any job-related issue with their superiors.
The seven variables of Likert’s management systems
Each of the management systems above, Likert argued, are underpinned to varying degrees by seven key variables:
Motivation
Whether positive (rewards and incentives) or negative (punishment).
Leadership styles encompass the behavioral qualities of a leader. These qualities are commonly used to direct, motivate, or manage groups of people. Some of the most recognized leadership styles include Autocratic, Democratic, or Laissez-Faire leadership styles.
Communication
Likert also suggested the way communication is utilized determines the way power and authority are distributed throughout an organization.
One-way communication is associated with exploitative systems, while two-way communication is seen in participative systems.
The linear model of communication is a relatively simplistic model envisaging a process in which a sender encodes and transmits a message that is received and decoded by a recipient. The linear model of communication suggests communication moves in one direction only. The sender transmits a message to the receiver, but the receiver does not transmit a response or provide feedback to the sender.
The transactional model of communication describes communication as a two-way, interactive process within social, relational, and cultural contexts. The transactional model of communication is best exemplified by two models. Barnlund’s model describes communication as a complex, multi-layered process where the feedback from the sender becomes the message for the receiver. Dance’s helical model is another example, which suggests communication is continuous, dynamic, evolutionary, and non-linear.
Interaction/Influence
What level of influence do employees have on decision-making?
The more participatory the system, the more influence employees possess.
Decision-making
Not to be confused with the fourth variable, decision-making describes the extent to which employees are asked to give their opinion on business operations or strategy.
In some systems, decision-making ability or engagement increases motivation.
Furthermore, employee thoughts or values may directly or indirectly influence the beliefs of superiors.
Control
How concentrated are management oversight and quality control functions?
How is productivity and performance data used? Is it a motivator or controller?
How are organizational goals established? To what extent is there resistance to implementing evidence-based practices?
Key takeaways
Likert’s management systems are a series of leadership theories based on the study of various organizational dynamics and characteristics. They were developed by Rensis Likert after an analysis of 200 organizations in the 1960s.
Likert proposed four management systems: exploitative authoritative, benevolent authoritative, consultative, and participative. Each describes different interactions between leaders and subordinates in an industrial setting.
Likert’s management systems are based on seven dynamic variables: motivation, leadership, communication, interaction, decision-making, control, and goal setting.
Key Highlights:
Likert’s Management Systems:
Likert’s management systems are leadership theories developed by Rensis Likert, an American social psychologist.
These theories are based on the study of various organizational dynamics and characteristics.
Background and Research:
Likert conducted research in the 1960s, distributing questionnaires to managers from 200 organizations to study leadership styles and productivity.
He emphasized the importance of considering human resources and capital resources as assets requiring proper management for organizational efficiency.
Four Management Systems (Leadership Styles):
Exploitative Authoritative: Centralized power and decision-making, with motivation based on threats and fear.
Benevolent Authoritative: Upper management holds authority, subordinates are motivated by rewards, limited decision-making by lower management.
Consultative: Motivation through rewards, autonomy, and participatory teamwork, some degree of communication and decision-making involvement.
Participative: Employee-centered, superiors have full confidence in subordinates, two-way communication, group-based decision-making.
Seven Dynamic Variables:
Motivation: Positive (rewards) or negative (punishment) influences on employee behavior.
Leadership: Different leadership styles, including autocratic, situational, and transformational.
Communication: One-way communication in exploitative systems, two-way in participative systems.
Interaction/Influence: The level of employee influence on decision-making and organizational processes.
Decision-Making: Employee engagement in decision-making, alignment of employee thoughts with superiors’ beliefs.
Control: Management oversight, quality control, use of performance data.
Goal Setting: Establishment of organizational goals, resistance to implementing evidence-based practices.
Leadership styles encompass the behavioral qualities of a leader. These qualities are commonly used to direct, motivate, or manage groups of people. Some of the most recognized leadership styles include Autocratic, Democratic, or Laissez-Faire leadership styles.
Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles.
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Succession planning is a process that involves the identification and development of future leaders across all levels within a company. In essence, succession planning is a way for businesses to prepare for the future. The process ensures that when a key employee decides to leave, the company has someone else in the pipeline to fill their position.
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Developed in the 1960s and first published in 1973, action-centered leadership was revolutionary for its time because it believed leaders could learn the skills they needed to manage others effectively.
Adair believed that effective leadership was exemplified by three overlapping circles (responsibilities): achieve the task, build and maintain the team, and develop the individual.
High-performance coaches work with individuals in personal and professional contexts to enable them to reach their full potential. While these sorts of coaches are commonly associated with sports, it should be noted that the act of coaching is a specific type of behavior that is also useful in business and leadership.
When most people are asked to define power, they think about the power a leader possesses as a function of their responsibility for subordinates. Others may think that power comes from the title or position this individual holds. Tipping Point Leadership is a low-cost means of achieving a strategic shift in an organization by focusing on extremes. Here, the extremes may refer to small groups of people, acts, and activities that exert a disproportionate influence over business performance.
The Vroom-Yetton decision model is a decision-making process based on situational leadership. According to this model, there are five decision-making styles guides group-based decision-making according to the situation at hand and the level of involvement of subordinates: Autocratic Type 1 (AI), Autocratic Type 2 (AII), Consultative Type 1 (CI), Consultative Type 2 (CII), Group-based Type 2 (GII).
Likert’s management systems were developed by American social psychologist Rensis Likert. Likert’s management systems are a series of leadership theories based on the study of various organizational dynamics and characteristics. Likert proposed four systems of management, which can also be thought of as leadership styles: Exploitative authoritative, Benevolent authoritative, Consultative, Participative.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
