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.
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.
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.
