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.
Likert’s Management Systems
Key Elements
Analysis
Implications
Applications
Examples
Definition
Likert’s Management Systems are a set of four organizational management styles developed by Rensis Likert. These styles range from System 1 (Exploitative-Authoritative) to System 4 (Participative Group). They describe the nature of leadership, communication, and employee involvement within an organization.
Analyzing Likert’s Management Systems involves understanding the characteristics and behaviors associated with each system. It requires assessing the extent of employee involvement, communication openness, and decision-making processes within an organization. Organizations can determine their current management system and its impact on employee morale and performance.
Likert’s Management Systems influence organizational culture, employee satisfaction, and overall effectiveness. Recognizing the characteristics of each system helps organizations identify areas for improvement and make informed decisions about leadership and management practices.
Likert’s Management Systems are applicable in various industries and organizational settings. They can be used by leaders, managers, and HR professionals to assess and adapt their management styles to better align with organizational goals and employee needs.
– Implementing a participative leadership approach to foster collaboration and engagement. – Assessing the communication channels and decision-making processes within an organization to identify areas for improvement. – Training managers and leaders to adopt leadership behaviors that align with a desired management system.
System 1 (Exploitative-Authoritative)
In System 1, leadership is characterized by authority and control. Decisions are made at the top, and communication tends to be one-way. Employees have little involvement in decision-making, and there is a focus on task efficiency.
Analyzing System 1 involves recognizing the top-down management style, limited employee involvement, and an emphasis on task completion. It often results in low employee morale, resistance to change, and a lack of innovation. Organizations using System 1 may experience compliance but struggle with employee engagement and creativity.
System 1 can lead to a culture of fear and dependence on leadership. It may result in low employee satisfaction, high turnover, and difficulties adapting to change. Organizations seeking to improve employee engagement and innovation often shift away from System 1 management practices.
System 1 is less commonly applied in contemporary organizations but may be found in highly hierarchical or traditional settings. Recognizing the drawbacks of this system can prompt organizations to adopt more participative and inclusive management styles.
– Transitioning from System 1 to a more participative management approach by involving employees in decision-making. – Encouraging open communication channels and feedback mechanisms to build trust and engagement. – Providing training for managers to develop leadership skills that support a more inclusive management style.
System 2 (Benevolent-Authoritative)
In System 2, leadership remains centralized, but there is a degree of benevolence and concern for employees. Managers may seek employee input but retain decision-making authority. Communication is typically top-down but may be more supportive and open than in System 1.
Analyzing System 2 involves recognizing the mix of control and employee concern. It represents a more supportive atmosphere than System 1 but still maintains a centralized decision-making process. System 2 may result in improved employee morale compared to System 1, but it can still limit innovation and autonomy.
System 2 acknowledges employee well-being but retains a hierarchical structure. While it may enhance employee satisfaction compared to System 1, it can still face challenges in promoting employee engagement and innovation. Organizations using System 2 may be more open to feedback and suggestions.
System 2 is often found in organizations where leaders recognize the importance of employee satisfaction but may not fully embrace participative decision-making. It can be a stepping stone toward more participative management styles, and organizations may adopt elements of System 2 in their approach.
– Introducing mechanisms for gathering employee feedback and suggestions to enhance the decision-making process. – Encouraging managers to show empathy and support for employees while still retaining decision-making authority. – Gradually transitioning toward more participative decision-making processes as trust and employee engagement grow.
System 3 (Consultative)
In System 3, leadership encourages employee input and involvement in decision-making. There is a balance between centralization and participation. Managers seek input from employees and value their contributions. Communication is two-way, and there is a focus on collaboration.
Analyzing System 3 involves recognizing the collaborative nature of decision-making, the importance of employee input, and the open communication channels. System 3 fosters employee engagement, innovation, and a sense of ownership in organizational outcomes. It can result in improved employee morale and performance.
System 3 promotes a culture of collaboration and involvement, enhancing employee satisfaction and motivation. It allows organizations to tap into the diverse perspectives and ideas of their workforce, leading to more effective problem-solving and decision-making. However, it may require a transition period and cultural shift for organizations used to more authoritative styles.
System 3 is a popular choice for organizations aiming to improve employee engagement and innovation. It is often associated with a more modern and inclusive leadership approach. Implementing System 3 requires building trust, encouraging open communication, and empowering employees to contribute to decision-making.
– Establishing cross-functional teams or task forces to address organizational challenges and make decisions collectively. – Conducting regular feedback sessions with employees to gather their input on strategic initiatives. – Providing training to managers on facilitating participative decision-making and fostering a collaborative culture.
System 4 (Participative Group)
In System 4, leadership fully embraces employee involvement in decision-making. Employees are empowered to make decisions related to their work, and there is a strong emphasis on collaboration and shared responsibility. Communication is open, and there is a sense of ownership among employees.
Analyzing System 4 involves recognizing the high level of employee empowerment, shared decision-making, and a collaborative organizational culture. System 4 promotes a sense of ownership, creativity, and innovation among employees. It results in high levels of employee engagement, motivation, and job satisfaction.
System 4 represents a shift toward a more decentralized and inclusive management style. It empowers employees to take ownership of their work and contribute to organizational goals. However, it may require significant cultural changes and a high degree of trust between leadership and employees.
System 4 is ideal for organizations seeking to foster innovation, employee autonomy, and a culture of continuous improvement. It is commonly associated with progressive and agile organizations that value employee contributions and adaptability. Implementing System 4 requires a commitment to shared decision-making and a supportive leadership approach.
– Establishing self-managing teams where employees have the authority to make decisions related to their work. – Encouraging open dialogue and idea sharing among employees, regardless of their position within the organization. – Creating a culture that values and rewards innovative thinking, collaboration, and employee-driven initiatives.
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?
Drawbacks of Likert’s Management Systems
Over-Simplification
The classification can oversimplify complex organizational dynamics and management styles, potentially overlooking nuanced aspects of organizational culture and behavior.
Resistance to Change
Organizations entrenched in one management style may face resistance when attempting to transition to a more participative system.
Misalignment with Organizational Goals
Certain management styles may not align well with the goals or operational needs of specific types of businesses.
One-Size-Fits-All Approach
The theory implies a one-size-fits-all approach to management, which may not be effective in all contexts or for all organizations.
Challenges in Implementation
Transitioning to a more participative management system can be challenging, requiring significant changes in organizational culture and mindset.
When to Use Likert’s Management Systems
Organizational Development
The model can be used to analyze and develop organizational structures and management practices.
Leadership Training
Likert’s theory is useful in leadership training programs to understand different management styles and their impact on employees.
Change Management
The model can guide change management initiatives, particularly in shifting towards more inclusive and participative management practices.
Employee Engagement Strategies
Organizations looking to enhance employee engagement and satisfaction might use the model to move towards a more consultative or participative system.
How to Implement Likert’s Management Systems
Assess Current Management Style
Determine the current management system in place within the organization.
Develop a Change Plan
If a change in management style is desired, develop a plan that outlines the steps to transition to the preferred system.
Train Management
Provide training and development for managers to adapt to the new management style.
Foster Open Communication
Encourage open communication channels and feedback mechanisms, especially if moving towards a more consultative or participative system.
Monitor and Adjust
Regularly monitor the impact of the new management system and make adjustments as necessary based on feedback and performance metrics.
What to Expect from Implementing Likert’s Management Systems
Changes in Organizational Culture
Adopting a different management system can lead to significant changes in organizational culture.
Enhanced Employee Morale
Moving towards more participative or consultative systems can enhance employee morale and job satisfaction.
Potential Initial Resistance
There may be initial resistance to change, especially if moving from a more authoritative to a participative system.
Improved Communication
More consultative and participative systems generally lead to improved communication and collaboration within the organization.
Long-Term Organizational Benefits
Although challenging to implement, these systems can lead to long-term benefits in terms of employee engagement, productivity, and organizational cohesion.
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.
Adaptive leadership is a model used by leaders to help individuals adapt to complex or rapidly changing environments. Adaptive leadership is defined by three core components (precious or expendable, experimentation and smart risks, disciplined assessment). Growth occurs when an organization discards ineffective ways of operating. Then, active leaders implement new initiatives and monitor their impact.
Authors and strategy experts Chan Kim and Renée Mauborgne developed the idea of blue ocean leadership. In the same way that Kim and Mauborgne’s blue ocean strategy enables companies to create uncontested market space, blue ocean leadership allows companies to benefit from unrealized employee talent and potential.
Developed by business consultants Kenneth Blanchard and Paul Hersey in the 1960s, delegative leadership is a leadership style where authority figures empower subordinates to exercise autonomy. For this reason, it is also called laissez-faire leadership. In some cases, this type of leadership can lead to increases in work quality and decision-making. In a few other cases, this type of leadership needs to be balanced out to prevent a lack of direction and cohesiveness of the team.
Distributed leadership is based on the premise that leadership responsibilities and accountability are shared by those with the relevant skills or expertise so that the shared responsibility and accountability of multiple individuals within a workplace, bulds up as a fluid and emergent property (not controlled or held by one individual). Distributed leadership is based on eight hallmarks, or principles: shared responsibility, shared power, synergy, leadership capacity, organizational learning, equitable and ethical climate, democratic and investigative culture, and macro-community engagement.
Ethical leaders adhere to certain values and beliefs irrespective of whether they are in the home or office. In essence, ethical leaders are motivated and guided by the inherent dignity and rights of other people.
Transformational leadership is a style of leadership that motivates, encourages, and inspires employees to contribute to company growth. Leadership expert James McGregor Burns first described the concept of transformational leadership in a 1978 book entitled Leadership. Although Burns’ research was focused on political leaders, the term is also applicable for businesses and organizational psychology.
Those who lead by example let their actions (and not their words) exemplify acceptable forms of behavior or conduct. In a manager-subordinate context, the intention of leading by example is for employees to emulate this behavior or conduct themselves.
A leader is someone within an organization who possesses the ability to influence and lead others by example. Leaders inspire, support, and encourage those beneath them and work continuously to achieve objectives. A boss is someone within an organization who gives direct orders to subordinates, tends to be autocratic, and prefers to be in control at all times.
Situational leadership is based on situational leadership theory. Developed by authors Paul Hersey and Kenneth Blanchard in the late 1960s, the theory’s fundamental belief is that there is no single leadership style that is best for every situation. Situational leadership is based on the belief that no single leadership style is best. In other words, the best style depends on the situation at hand.
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.
Fielder’s contingency model argues no style of leadership is superior to the rest evaluated against three measures of situational control, including leader-member relations, task structure, and leader power level. In Fiedler’s contingency model, task-oriented leaders perform best in highly favorable and unfavorable circumstances. Relationship-oriented leaders perform best in situations that are moderately favorable but can improve their position by using superior interpersonal skills.
In the context of an organization, cultural models are frameworks that define, shape, and influence corporate culture. Cultural models also provide some structure to a corporate culture that tends to be fluid and vulnerable to change. Once upon a time, most businesses utilized a hierarchical culture where various levels of management oversaw subordinates below them. Today, however, there exists a greater diversity in models as leaders realize the top-down approach is outdated in many industries and that success can be found elsewhere.
Action-centered leadership defines leadership in the context of three interlocking areas of responsibility and concern. This framework is used by leaders in the management of teams, groups, and organizations.
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.
Discover more from FourWeekMBA
Subscribe now to keep reading and get access to the full archive.
