Decentralisation and Leadership Styles (AQA Paper 1 2019, Q20)

Here's a suggested answer for the 9-mark question on how different leadership styles in a business might impact the effectiveness of a strategy of decentralisation.

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Possible response

If many of the managers in the business have autocratic leadership styles, then this is likely to reduce the effectiveness of a strategy to decentralise the business. Autocratic leaders prefer to hold onto as much power and decision-making authority as possible, preferring to use a “command and control” approach. Consequently they are likely to resist sharing decision-making authority, or to switch from a top-down approach to communication to a two-way approach. Similarly, if managers in different parts of the business are autocratic, they will be unlikely to embrace the increased use of delegation which is usually a feature of effective decentralisation, reducing the effectiveness of this strategy.

Alternatively, if many of the managers in different parts of the business have a democratic leadership style, then a strategy to decentralise the business is likely to be effective. Managers with a democratic style tend to embrace the sharing of decision-making authority and the greater involvement of, and communication with, employees in business decisions. These are important parts of decentralisation because each business unit will need to be much more actively involved in decision-making rather than just accepting instructions from the centre in a centralised approach. Democratic managers are more likely to be able to gain the support of employees as they tend to be more consultative. Consequently, the different business units are more likely to accept the accountability that comes with decentralisation, since decisions will be taken more collaboratively.