Page 286 - Introduction to Business

260 PART 2 Managing Business Behavior

EXHIBIT 7.10
Leadership Styles

Contingency
Autocratic Democratic Free-Rein Approach to
Style Style Style Leadership

Leadership Top-down Active Employees Managers may
characteristic approach participation enjoy adopt autocratic,
with little of all complete democratic, or
input from members or freedom to free-rein
employees: employees: accomplish leadership style
“My way or “No policy agreed on the basis of
the high- implementa- on task the prevailing
way!” tion without within set business
representa- deadline: environment:
tion.” “laissez faire”“One size
doesn’t fit all.”

Examples of Privately Professional University Public/
organizations held firms service professors multinational
Family run organizations School enterprises
businesses Architectural teachers International
The military firms Researchers business
Consulting Software Businesses
firms engineers dealing with
Labor unions Lawn care culturally
diverse
Academic services
workforces
associations

Although the trend in most large companies is generally to move away from the
autocratic style of leadership, some companies continue to be managed by auto-
crats. Sanford “Sandy” Weill of Citigroup, who recently announced his retirement,
is known for his autocratic management style. He is said to terrorize subordinates
and his organization with his in-your-face management style and ruthlessness.
Business Week rated Sandy Weill as one of the worst managers of 2002, as the bank-
ing giant that he headed landed in a series of financial scandals through its associ-
23
ation with a string of failed companies like Enron. From his early years at Cogan,
Berlind, Weill & Levitt through his tumultuous tenure at American Express and sub-
sequent culture clash and battle for corporate power with John Reed of Citigroup,
Sandy Weill has cost shareholders billions of dollars in lost value. Also, autocratic
leaders generally tend to create a cadre of sycophants who will not voice their
candid opinions. It appears that Sandy Weill and Citigroup could have benefited
more from a participative style of management.

Democratic Style

democratic style A bottom-up approach A purely democratic style of leadership is practiced in only a few types of organi-
to management where management zations, most of which are professional, like consulting and architectural firms. The
receives input from its members and
major policies are accepted for American Economic Association, the Academy for International Business, and the
implementation on the basis of majority Academy of Management elect officers and vote on issues that affect their mem-
vote bers. The management receives input from its members, and major policies are
accepted for implementation on the basis of a majority vote. Leadership, policies,

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