Rensis Likert and his associates of the University of Michigan, U.S.A. conducted an extensive survey of management style and patterns in large number of organizations. Likert developed a continuum of four system of management. These systems indicate the stages of evolution in the patterns of management in organisations. These are based on several variables namely leadership, motivation, communication, interaction, influence, decision- making process, goal-setting and control process. A brief description of the Likert’s four management systems is given below –
System 1 – Exploitative Autocratic– The managers under this system make all work- related decisions and order their subordinates to carry out the decisions. The managers also define standards and methods of performance. The subordinates have absolutely no say in the decision-making process. The communication between the manager and his subordinates is highly formal in nature and downward in direction. Such managers believe in threats and punishments to get things done. They exercise strict supervision and control over the subordinates
System 2 – Benevolent Autocratic– System 2 managers are also autocratic but they are not exploitative. They adopt a paternalistic approach towards the subordinates. They allow some freedom to subordinates to carry out their tasks within the prescribed limits. The managers adopt patronising attitudes towards the obedient and faithful subordinates. They are rewarded for accomplishment of goals. But the subordinates who do not their tasks are treated harshly. Thus carrot and stick approach to motivation is adopted under this system.
System 3 – Consultative– Managers under this system set goals and issue orders after discussing them with the subordinates. They take major decisions themselves and allow subordinates to take the routine decisions. Subordinates are free to discuss the work-related matters with the managers. Thus there is two-way communication in the organisation. Managers trust subordinates to carry out their tasks. Greater emphasis is placed on rewards than on penalties to motivate the subordinates. The control system tends to be goal-oriented and flexible.
System 4 – Democratic– Under this system, goals are set and work related decisions are taken by the subordinates. Supervision and control are group- oriented. Managers are friendly and supportive in their attitudes towards the subordinates. Subordinates are permitted self-appraisal on the basis of mutually set goals. In addition to economic rewards, subordinates are given a sense of purpose and feeling of worth. The communication system is completely open. Likert suggested that System 4 is the ideal system towards which organizations should Work.