[Commerce Class Notes] on Likert’s System of Management Pdf for Exam

Rensis Likert established management styles called Likert’s management systems in the 1960s. To characterize the interaction, engagement, and roles of managers and subordinates in industrial contexts, he proposed four management systems. He developed the procedures based on research conducted with highly productive managers and their teams at an American insurance company. Later, he and Jane G. Likert altered the methods so that they could be applied in educational contexts. They were created to define the duties of principals, students, and teachers; however, other stakeholders like superintendents, administrators, and parents were subsequently added.

Rensis Likert and his colleagues at the University of Michigan in the United States studied the patterns and styles of managers for three decades and established a four-fold model of management systems. The model was developed using information from a poll of over 200 managers as well as research into the performance characteristics of various types of firms.

There are four management systems or four leadership styles, according to Likert:

Likert Management System

The Likert’s Management System was developed by Rensis Likert in the 1960s. Rensis Likert with his associates observed the different patterns and styles of management in various fields. He observed the styles for around three decades and came up with the Likert’s Management System. After years of observation and research, he outlined four styles of management which described the relationships, involvement and roles of managers and subordinates in an industrial setting. The observation of Likert was carried out at Michigan University, USA. 

The Four styles that were given by Likert were called Likert’s Leadership Styles. Likert developed these leadership styles with thorough research of various organizations. He also took the help of questionnaires which were distributed to managers from over 200 different types of organizations.  

After the successful development of the four leadership styles, Likert tried to modify the styles to suit the educational institutions. 

Likert’s Four Styles of Leadership

The Likert’s Management system consisted of four styles and they are Exploitative Authoritative, Benevolent Authoritative, Consultative and Participative. The four styles were developed with a lot of research and observation. These systems indicate the stages of evolution of patterns of management in different organizations. The system consists of different variables such as motivation, Influence, Leadership, communication, Interaction and decision making. Here we will discuss in detail the Likert’s Leadership Styles.

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Exploitative Authoritative System

It is the first system in Likert’s Leadership Styles. Under this style Likert states that the ultimate power lies in the hands of the top subordinates. The Top management makes the policies and rules and the employees in the lower level are bound to follow the instructions given to them by their superiors. Here, it is observed that the workers at the lower level do not feel free to discuss their work with their superiors. The communication and teamwork in this system are very little. 

The leaders in the system of Exploitative authoritative have a lower level of concern for their employees. They use threats or methods that involve fear to achieve their work. The method of threat works well and the employees work efficiently upon entering the organization. The leaders are ignorant of the psychological feelings of the employees and the communication between them is almost nil. 

In this type of system, the upper management burdens employees with a heavy workload and they are to finish the work without fail. The monetary benefits and work satisfaction in this type of system is very less. 

Benevolent Authoritative System

Under this system of Likert’s, it is observed that the authority lies in the hands of the managers and not in the hands of the lower-level workers. The superiors have a small amount of confidence and trust in the employees. The superiors have less control over the employees. They do not use methods of threats. However, the employees are rewarded and punished as per their performance in the organization. 

In this system of management, the employees are involved in some of the decision making processes. But the ultimate power lies in the hands of the superiors. Here also the communication is very little and the employees do not feel free to share their work experience with the superiors. 

Consultative System

This is the third style of leadership given by Likert. In this system, Likert has stated that responsibility and authority are spread widely throughout the organization. The subordinates in the different levels of the organizations are given different responsibilities. The employees and subordinates work as a team on certain decisions. There is fair communication between the employees and the superiors. However, the power to form policies and rules lies in the hands of the top management. 

Under this system, the employees are rewarded for better performance and at the same time, they are also punished for bad performances. The employees are free to communicate with their superiors and subordinates. They can share their work-related issues with the superiors freely. The system promotes a healthy work environment for the employees and motivates them to work efficiently.

Participative System

This is the last style of leadership given by Likert. Under this style, Likert states that the power and responsibility to achieve the goals of the organization is distributed among all the employees and subordinates in the organization. According to this system, each employee has a certain role to play in the success of the organization. The superiors have the utmost confidence and trust in their employees. 

The employees are made to participate in the decision-making process of the organization. The system states that there is a continuous flow of information in both an upward and downward direction. The employees are provided with a healthy work environment and they are motivated continuously by their superiors.