Likert’s Management Systems were developed by American social psychologist Rensis Likert. Likert’s management systems are a series of leadership theories based on the study of various organizational dynamics and characteristics. Likert proposed four systems of management, which can also be thought of as leadership styles: Exploitative authoritative, Benevolent authoritative, Consultative, Participative.

Understanding Likert’s management systems

During the 1960s, Likert distributed questionnaires to managers from 200 organizations to study patterns in leadership style. Specifically, Likert evaluated management performance by determining whether leaders could extract higher productivity levels from their subordinates.

He discovered that greater organizational efficiency occurred when managers applied a general supervision style and focused on building relationships. These managers were defined as employee-centered. Conversely, managers who maintained the constant pressure of production through a focus on tasks were said to be job-centered.

Likert and his colleagues argued traditional methods for measuring bottom-line performance ignored the human component. As a result, they emphasized the need to consider both human resources and capital resources as assets requiring proper management. More broadly, Likert’s work made it possible to quantify the research many other theorists were doing into group dynamics at the time.

Likert’s four systems of management

Likert proposed four systems of management, which can also be thought of as leadership styles. 

Each describes the relationships, involvement, and roles of managers and subordinates in an industrial setting:

1. Exploitative authoritative – in this system, responsibility and power lie in the upper echelons of the management hierarchy. Superiors have no trust or confidence in subordinates, with decisions imposed on the latter with no scope for discussion. Motivation is based on threats and fear and management is highly task-oriented.
2. Benevolent authoritative – authority and decision-making ability remains with upper management, but subordinates are motivated by rewards. As a natural consequence, leaders have condescending confidence and trust in their subordinates similar to a master-servant relationship. Benevolence also means a limited number of decisions are allowed to be made by middle or lower management.
3. Consultative – this system of leadership uses rewards, autonomy, and participatory teamwork as the basis for motivation. Management has substantial but not total confidence in subordinates, with some degree of horizontal and vertical communication. Employees are involved during some decision-making processes – particularly if decisions are likely to make a significant impact on them.
4. Participative – Likert considered this system to be the most satisfying for employees. Superiors have full confidence in subordinates and encourage them to participate in group-based decision making – which also serves as a motivational driver. Two-way communication is also prevalent as the subordinate feels empowered to discuss any job-related issue with their superiors.

The seven variables of Likert’s management systems

Each of the management systems above, Likert argued, are underpinned to varying degrees by seven key variables:

1. Motivation – whether positive (rewards and incentives) or negative (punishment).
2. Leadership – Likert’s systems cover many leadership styles, including autocratic leadership, situational leadership, and transformational leadership.
3. Communication – Likert also suggested the way communication is utilized determines the way power and authority are distributed throughout an organization. One-way communication is associated with exploitative systems, while two-way communication is seen in participative systems.
4. Interaction/Influence – what level of influence do employees have on decision-making? The more participatory the system, the more influence employees possess.
5. Decision-making – not to be confused with the fourth variable, decision-making describes the extent to which employees are asked to give their opinion on business operations or strategy. In some systems, decision-making ability or engagement increases motivation. Furthermore, employee thoughts or values may directly or indirectly influence the beliefs of superiors.
6. Control – how concentrated are management oversight and quality control functions? How is productivity and performance data used? Is it a motivator or controller?
7. Goal setting – how are organizational goals established? To what extent is there resistance to implementing evidence-based practices?

Key takeaways:

• Likert’s management systems are a series of leadership theories based on the study of various organizational dynamics and characteristics. They were developed by Rensis Likert after an analysis of 200 organizations in the 1960s.
• Likert proposed four management systems: exploitative authoritative, benevolent authoritative, consultative, and participative. Each describes different interactions between leaders and subordinates in an industrial setting.
• Likert’s management systems are based on seven dynamic variables: motivation, leadership, communication, interaction, decision-making, control, and goal setting.

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