Rensis Likert`s 4 Management Systems

Organizational performance and efficiency is closely connected with the system of management and leadership style adopted by organizations. Approach to management proposed by Rensis Likert is based on so called system approach to management which views organizations as systems. In general, a management system encourages one to consider the cutting across of tradi­tional boundaries of responsibility between departments in order to appreciate the objectives of the whole organization (Miner, 2002). Rensis Likert proposes a theory which helps to think about management with knowledge of human behavior and helps to postulate conceptually the interrelationship of apparently sepa­rate and even contradictory ideas underlying management theory.

Rensis Likert suggests that an organization is more likely to harness effectively its staffing resources if there is a participa­tive style of management. On the basis of a questionnaire to managers in over 200 organizations and research into the performance characteristics of different types of organizations, Likert identifies a four-fold model of management systems.

According to Likert the four management systems are: System 1 (Exploitive authoritative); System 2 (Benevolent authoritative); System 3 (Consultative); and System 4 (Participative group) (Likert, 1967). Some researchers, including Miner (2002), state that “Likert’s formal specification of concepts, such as the principle of supportive relationships, also appears to have been influenced by the results of the research. Thus the studies may be viewed as tests of the theory only in a general form” (Miner, 2002, p. 369).

In System 1(Exploitive authoritative) decisions are imposed on subordi­nates, motivation is based on threats, there is very little team-work or commu­nication, responsibility is centered at the top of the organizational hierarchy. A leader gets others to thing by giving them little scope to influence decisions. The main tools of his influence on subordinates are fear, threats and his authority.

The authority in System 1 is based on fear and the subordinate’s perception that the leader has the ability to punish or to bring about undesirable outcomes for those who do not comply with directives; for example, withholding pay rises, promotion or privileges; allocation of undesirable duties or responsi­bilities; withdrawal of friendship or support; formal reprimands or possibly dismissal (Likert, 1967).

In contrast to System 1, System 2 (Benevolent authoritative) can be describes as a condescending form of leadership. The main similarity between System 1 and System 2 is that there is limited team-work or communication. In contrast to System 1, motivation is based on a system of rewards. Also, there is responsibility at managerial levels but not at lower levels of the organizational hierarchy (Likert, 1967).

In contrast to other systems, the affective component of attitudes therefore should not be under­estimated; neither can its relationship with a host of other variables concerned with the motivation and morale of individuals at work. In contrast to other management styles, benevolent authoritative leaders see themselves more as conservators and regulators of the exist­ing order of affairs with which they identify. Their sense of identity does not depend upon membership or work roles and they search out opportunities for change (Olmstead, 2002).

System 3 (Consultative) differs greatly from System 1 and System 2. Consultative leadership involves some trust in subordinates. It is possible to say that this leadership is based on the subordinate’s perception that the leader has a right to exercise influence because of the leader’s role or position in the organization.

Consultative power is based on authority, for example that of managers and supervisors within the hierarchical structure of an organization. In this System, motivating other people is about getting them to move in the direction a leader want them to go in order to achieve a result (Pugh, et al 1971). Similar to System 4, motivation becomes as goal-directed behavior and ability to contribute to a solution.  Similar to System 2, motivation in System 3 is based on rewards. Responsibility for achieving the goals of the organization is spread more widely throughout the hierarchy.

In System 4 (Participative group), leadership involves trust and confidence in subordinates. Similar to System 3, motivation is based on rewards for achievement of agreed goals. In contrast to three other systems, there is participation and a high degree of team-work and communica­tion. In System 4, responsibility for achieving the goals of the organization is widespread throughout all levels of the hierarchy (Likert, 1967).

Taking into account four systems of leadership, it is evident that motivation and rewards are the most important elements of management for Likert. People are motivated when they expect that a course of action is likely to lead to the attainment of a goal and a valued reward – one that satisfies their needs (Golembiewski, 1972). Following Likert, it is reasonable to believe that strong commitment to work is likely to result in consci­entious and self-directed application to do the job, regular attendance, nominal supervision and a high level of effort (Olmstead, 2002).

Commitment to the organization is related to the intention to stay – in other words, loyalty to the company (Golembiewski. 1972). Four Systems recognize motivation as a complex subject influenced by many variables. Individuals have a variety of changing, and often conflicting, needs and expectations which they attempt to satisfy in a number of different ways.

The similarity between System 3 and System 4 is that there is a fair degree of team-work, and communication takes place vertically and horizon­tally. In these Systems communication becomes an effective tool of knowledge sharing and problem-solving. Important in the above is the recognition that involvement of people in examining the problems and seeking to develop solutions. Employees are involved actively in that process (Golembiewski, 1972). Moreover, all manner of developments and improvements are discussed in the context of the strategy that management has agreed upon in order to turn the company around.

Responsibility and delegation of authority is different between authoritative systems (System 1and 2) and System 3 and 4. In considering the limits of authority, an obvious limitation is that action must conform with policies and programs of the organization. In System 3 and 4 the main purpose of delegation is to make organization possible. There is a limit to the number of persons that a manager can personally supervise.

After this limit, the leader must delegate authority to subordinates to make decisions. In Participative and Consultative Systems delegation becomes a process whereby an individual or group transfers to some other individual or group the duty of carrying out some particular action and, at the same time, taking some particular decision. According to Likert, “highly effective workgroups linked together in an overlapping pattern by other similarly effective group” (Rensis Likert`s Management Systems, 2005).  It means, in effect, entrust­ing some part of the work of management to subordinates. Responsibility is not, though, surrendered, as no manager avoids ultimate responsibility by delegating.

It is important to note that “Likert recognizes the need for clear definition of roles in an organization, but at the same time he advocates vertical and horizontal linking pin structures, cross–functional teams, and matrix designs that would be expected to increase uncertainty and conflict” (Miner, 2002, p. 374). In Systems 2, 3, 4, a leader inspires employees and motivates them to achieve objectives and goals.

In System 3 and 4, power is based on the subordinate’s identification with the leader. The leader exercises influence because of perceived attractiveness, personal characteristics, reputation. For example, a particular manager may not be in a position to reward or punish certain subor­dinates, but may still exercise power over the subordinates because the manager commands their respect or esteem.

In contrast to System 1 and 2, in Systems 3 and 4 employees provide companionship and a source of mutual understanding and support from colleagues. “The central thesis of the Likert (1976) theory is that system 4 is the best method currently available for dealing with conflict, not only in the organizational context but in other contexts as well” (Miner, 2002, p. 365)

This can help in solving work problems, and also to mitigate against stressful or demanding working conditions. Co-operation among employees is likely to be greater in System 3 and 4. Personal involvement of a leader is important for employees because they need to feel confidence and support. According to Likert, the forth system is “the ideal one profit oriented and human concerned organization” (Likert, 1967, p. 45).

The similarity between four management styles is that leadership provides the framework for guiding choices which deter­mine the organization’s nature and direction. Leadership strategy is therefore a declaration of intent; it defines what the organization wants to become in the longer term. The overall aim of leadership at corporate level will be to match or fit the organization to its environment in the most advanta­geous way possible.

Taking into account four leadership styles (systems), it is possible to say that they aim to improve the control mechanisms of organizational systems so that they can plan for, and react more effectively to, changes in the environment. Four systems stress the need for more understanding in the development of sophisticated problem-solving techniques. The approach to management and leadership proposed by Likert attempts to give managers a way of looking at organizations as a complete whole. Likert implies that activities in any part of the organization will affect the activities of every other part. Effective motivation process is at the heart of organization development and improved performance.

References

1. Golembiewski, R.T. Renewing Organizations: The Laboratory Approach to Planned Change. E. Peacock Publishers, 1972.
2. Likert, R. The Human Organization: Its Management and Value. New York: McGraw-Hill Book Company. 1967.
3. Miner, J.B. Organizational Behavior: Foundations, Theories, and Analyses. Oxford University Press, 2002.
4. Rensis Likert`s Management Systems. 2005. http://www.accel-team.com/human_relations/hrels_04_likert.html
5. Olmstead, J.A. Creating the Functionally Competent Organization: An Open Systems Approach. Quorum Books, 2002.
6. Pugh, D. S., Hickson, D. J., Hinings, C. R. (eds.) Writers on Organizations, Second Edition, London: Penguin, 1971.