Most businesses start as sole-proprietorships. With time however, a few may grow to become large organizations with a few or even thousands of employees who will need to be managed or lead. Many of you have probably started internet businesses and have grown a network of entrepreneurs that you may need to coach and mentor to sustain your business growth.
There are many factors that determine which leadership style would be appropriate for your firm or internet business and choosing a fitting style can be very beneficial.
In a firm or an organization where you largely depend on the creativity and skills of your employees or the team members and where you want to encourage and allow members to make decisions and thus have access to management, a democratic leadership style may be the best fit. Because everyone has the opportunity to be involved and is hence put on a horizontal “line” of power, there may be conflicts between people caused by disagreements and no formal rule as to whose opinion or decision shall count over the others.
Sometimes however, especially in an internet business such as a multi-level marketing business, your downline may never interact with each other even though each person has their own business, which eliminates the above disadvantage of the democratic leadership style. That is why I would highly recommend for you to use this style of leadership if you are in a multi-level-marketing business and simply provide coaching and support to your downline while allowing them to have control over their own business.
In an organization where you may have contractors working for you for example, it is beneficial to have an open door policy, meaning that any employee has access to management or leaders (or you as the leader or manager), which is also referred to as the participative style of leadership. The employee or team involvement creates and environment of trust, initiative, and ingenuity and leads to satisfaction as well as organizational commitment as employees have the opportunity to express their opinions and suggestions and concerns, which can then be addressed by management. The advantage as a manager is that you still remain full control and power of your business as you are the one who has VETO power and makes the final decision, even if it is against the suggestions of employees or subordinates.
Arguments can arise when several subordinates submit conflicting suggestions and then feel disrespected or offended by their suggestion not being chosen or fulfilled by management.
When an organization is struggling due to poor sales or declining demand, the authoritative style of leadership is appropriate. Due to the stressful nature of these situation and the fact that it is ultimately your business that is on the line of failing or recovering from its low point, you should be the one to make the decisions and inform your employees or subordinates what their tasks should be, how and when they should be fulfilled and what the adjusted goals are. However, the disadvantage is that the authoritative leadership style tends to stifle creativity and individual initiative limiting employee’s actions to what you tell them. And because it is your business and you care about the outcome the most, you may be under a lot of pressure and stress and may not make decisions considering the consequences from different perspectives, which can sometimes lead to bad decisions.
Thus, if you feel like you have qualified subordinates who may be of valuable assistance to you in this situation, do not choose this leadership style. Instead choose a consultative leadership style that would also be the most appropriate style of leadership if a crisis were to occur in your business.
While you as the manager or leader assume a great deal of authority and discretion as well as control of decisions being made, this leadership style call for you to ask your subordinates for advice, input, and help, and allow your employees to have a voice. If you are ever faced with this situation, be very careful on whom you can trust and who is simply trying to take advantage of the situation to either destroy your business or seem helpful in order to receive incentives.