8 Management Styles in Business: Choosing the Best Fit

Key takeaways

Management styles describe how managers guide, motivate, and support their teams, and these different styles shape the overall work experience.  

• Managers can draw on a range of styles, including authoritative, democratic, laissez‑faire, and transformational approaches, depending on the context.

• Managers tend to rely on an innately preferred way of working, which becomes clear in how they communicate, make decisions, and handle everyday leadership tasks.

• You can identify your own management style by reflecting on your values and those of the organization, while using mentorship, leadership assessments, or formal courses to refine your approach.

Discover the value of different management styles and how to identify yours. If you’re ready to start providing employees with learning opportunities to help them gain in-demand skills and advance into management, Coursera for Business can provide valuable training materials in a diverse format, including Guided Projects and Professional Certificates.

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What are management styles?

Management styles refer to the different ways managers choose to guide and support a team. Even though all managers have similar duties, each style shows how they employ their abilities to inspire others and lead successfully. Every manager has a natural approach that shows in their leadership habits, daily communication, and decision-making. It is simpler to understand how a manager affects the team and shapes the overall work experience when that default style is recognized, often in ways previously hidden.

As a leader, you might use one management style across all aspects of your job or shift from one to another based on various scenarios. How much work you need to do, how quickly you must complete the work, your company culture, your personality, and your team goals may all have an impact.  

Your management style helps those around you understand how you work, your expectations, and how to communicate with you. When you have a clear approach to management, your employees are typically more productive because they know what you expect from them and what to expect from you.

8 types of management styles (and when to use them)

As a leader, you can choose from several management styles. Each has its particular characteristics, but you'll also find some overlap and share traits. You may also prefer to use a combination of styles rather than just one. Consider  each of these styles in more detail:

1. Authoritative

Leaders make unilateral, top-down decisions in an authoritative or autocratic management style. Autocratic managers have clearly defined rules and manage rigid, structured environments. While this style can save time, boost efficiency, and reduce uncertainty, particularly in high-pressure or crisis situations, it also leaves little room for creativity or outside-the-box thinking. 

This style works when:

• You’re facing a tight deadline.

• You're in a crisis situation.

2. Democratic

A democratic manager encourages team participation and discussion when making decisions. This style benefits from bringing more diverse perspectives into the decision-making process while allowing team members to feel valued and engaged. This approach can enhance collaboration and creativity. It can also take more time and may increase the potential for conflict.

This style works when:

• Decisions don't involve private or confidential information.

• An organization wants to promote and develop talent from within.

3. Laissez-faire

The laissez-faire management style is not quite a hands-off leadership approach, but it does allow the manager to step back. Employees make their own decisions and work with little guidance or instruction. In turn, the manager can answer questions and help when necessary. This can boost employee motivation and creativity within a relaxed company culture, but it can also pose a challenge for employees who need more direct support (particularly new arrivals or those early in their careers). 

This style works when:

• An organization has a more relaxed company culture. 

• Employees are self-motivated or have been doing their jobs for a long time. 

4. Transformational

Transformational leaders create an environment constantly changing to reach and exceed company goals. Managers inspire employees to push beyond their comfort zones by expanding their skills and expertise and taking on new projects to achieve a shared goal. This focus on lofty goals and long-term development often boosts innovation and intrinsic motivation, though it can also stretch teams and feel disruptive at times. 

This style works when:

• A company is values-driven.

• Employees are adaptable and willing to take calculated risks.

5. Collaborative

Collaboratively managed teams open all ideas to discussion, with final decisions made by majority preference rather than management alone. This style can improve employee morale while developing the leadership skills of future company leaders. Like the democratic style, this can be time-consuming. It's also possible to arrive at a majority decision that isn't right for the company. 

This style works when:

• Open communication occurs between managers and employees.

• You present a clear objective that could benefit from innovative ideas.

6. Transactional

Transactional management rewards employees for achieving goals through incentives such as bonuses or stock options. Leveraging extrinsic motivation in this way can be effective when undesirable work needs to get done, but it can also discourage creativity and risk-taking. When using this style, it's important to remember that intrinsic motivation has been shown to be stronger in the long run. 

This style works when:

• A project requires a fixed, linear process.

• You’re managing time-sensitive short-term goals.

7. Coaching

When you take a coaching approach to leadership, you take on the role of a coach to your "team" of employees. This often means a focus on your team's long-term career development, even if that means more mistakes in the short term. A coaching style can create strong team bonds, encourage a culture of learning, and improve engagement. It can also lead to a toxic level of competition if taken too far.

This style works when:

• Teams are small, leaving time to connect one-on-one.

• Long-term progress is more important than short-term success.

8. Visionary

If you have a vision for your company or team and you're effective at communicating that vision to others, this leadership style could be a good fit. A compelling vision can inspire team members to put forth their best work while connecting the team through a collective purpose. This style can be effective in the right circumstances, but it might prove challenging for those who are more introverted or risk-averse.

This style works when:

• Experienced teams are good at managing themselves.

• A company or team needs to undergo change.

Read more: Leadership Styles: What They Are and Why They Matter

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Styles of business management: How to identify yours

You can take several steps to discover how you prefer to manage. Consider starting with these options:  

Trust your intuition.

Look inward and assess your personality, values, priorities, and goals. This will get you off to a good start in identifying your management style. Not only that, but intuition is an important skill for all managers, and practicing it can help make you a better leader. 

Consider your company culture.

It’s important to take your organization's values into account when determining which management style fits you best. If your organization values collaboration, you may not want to adopt an autocratic management style. If your organization values fast growth, you may want to incorporate traits from the transformative management style into your leadership. 

Find a mentor.

Is there a leader within your organization whom you admire? If so, asking them to mentor you and help you refine your management style may be worth it. Hiring a business coach is another option. Leaders utilize business coaches for several reasons, and improving management skills is one of them. If you don’t know where to look for a business coach, start by asking the leaders around you for recommendations. 

Take a leadership assessment.

Leadership assessments are a great way to help you get to know yourself better because they often remind you of characteristics you tend to forget or push to the side. They also highlight your strengths and opportunities for growth, helping you create a clear vision for becoming the leader you want to be. 

Take a course.

If you prefer a more formal approach to accessing and improving your management style, take a course led by an accomplished professional. Having a management course on your resume will also show your dedication to being a strong leader. 

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