Regardless of how big or how small your business is, it needs a management style that is clear, concise, decisive and is in line with the goals of the company. While there are numerous views on management styles in general, small business organisation and staff interaction may differ extensively compared to larger or public company.

Implementing or adapting a management style that is effective for a small business must also be befitting the business owner’s leadership personality and company philosophy. Here are 5 common examples of leadership styles that are utilised by SMEs that may help you identify the right management style for your company.

An active management style can be easily summarised as ‘lead by example’. Active leaders understand that the team is essential to success. They often show concern over any issues or grievances that staff might have and espouses the values of teamwork on all levels of management. They exemplify the idea that small business staff greatly depend on each other.

Active leaders support and count on each employee to exhibit a high standard of cooperation. They are also usually involved with the day-to-day functions and are fully aware of the happenings at the office. They like to keep employees informed and involved through transparent communication.

This is a more tyrannical approach to running a business. Autocratic leaders make decisions without the input from advisors or managers and imposes their will on the company direction and employees. This style of leadership may work for businesses that require strict oversight and adherence to protocol, especially with regards to hazardous work conditions or mistakes that could lead to loss of life. This leadership style is rather unpopular with employees, especially people who are creative.

A democratic style of leadership is a very liberal stance, ensuring all opinions are heard before committing to a final decision. Some democratic leaders might even wait to reach a consensus before making a decision. As with any democracy, this leadership style tends to be slow and bothersome. SMEs have the advantage of being small, adaptable and versatile, which allows them to implement this style of leadership comparatively easily.

The feeling that all employees have a voice that is heard can make it easier to implement change. The resulting trust in the company promotes a sense of harmony and raises the job satisfaction scores.

A participatory style is a form open to employees being involved in the company’s decision-making process. This form of leadership relies on input from all workers as management seeks to build strong relationships with employees who deal directly with customers or clients. This allows for employees to provide leaders with innovative and creative solution as and when they need to. It also helps employees feel involved with the decisions and direction of the company.

The servant leader sounds like a walking contradiction. This style of leadership recognises the power of expertise, finding the most talented individuals and empowering them to do what they do best. The term stems from the leader seeing themselves as a servant to the customer. As such, these leaders see the importance of helping to mould employees to improve as human beings and grow in vital ways that are relevant to work.

This ideal recognises employees as human beings, and not simply workers who can be replaced. Employee knowledge, skills, and willingness to learn and grow fit with the company’s core values, so employees feel they contribute their skills on a daily basis.