Autocratic Business Leadership In A Recession Essay

, Research Paper

This essay will address the question of whether the autocratic style of

leader is the best type to have in an economic recession. After giving

a definition of what an autocratic is, and what an economic recession

entails, the reasons why this is the best style of leadership will

be addressed. The points in favour to be examined will be; that quick

decisions are reached, there is efficiency, a clear chain of command

and a lack of sentimentality. Also, one good example of an autocratic

leader will be included. Then the reasons why this leadership style

may not be good will be looked at. These will be; the over dependency

on one person, the frustration and resentment caused to the workforce

and the modern trend towards employee participation in decision making.

There will then be a brief look at three other leadership styles, which

will lead to the question being answered as a conclusion.

An autocratic leader in business terms is a person who keeps most or

all of the key authority for themself. They are very dictatorial or

authoritarian and tell their employees exactly what to do. They tend

not to delegate very much or share information willingly with their

subordinates, and they ?assume responsibility for all operational

aspects?.[1]

An economic recession seen through the cycle of an individual business

can follow this process; falling sales, intense awareness of competitors,

customers becoming very price sensitive, a cut in output, making workers

redundant, not implementing expansion plans, postponing capital investment

and cutting under-used capital equipment.

Efficiency is a quality inherent in a successful autocrat. They will, in

a recession, exploit all the resources available with no sentimentality,

and as a leader they will have insured there is a minimal level

of bureaucracy and middle management tiers to interfere with this.

There is likely to be a high output per worker and a low level of cost

per business unit output. Overall, the efficiency of the autocrat will

be vital in streamlining operations during a recession.

Quick decisions are needed in every size of business at one time

or another. Seeing a market gap or spotting a take-over opportunity

are areas where this is especially relevant, the autocratic leader in a

time of economic downturn can use their attributes very profitably here.

Being in some ways both a gambler and a dictator by nature, they will

back their own judgement and impose their will on their employees.

They will often follow their hunches, and although this has inherent

risks, the opportunities that are open in a recession can lead to them

successfully exploiting their rivals? weaknesses through being confident

enough to aggressively move in on their market share or even launch a

take-over bid. Also, there will in some heavy industries, be excellent

opportunities to purchase cheap heavy plant, and use the fact that land

and buildings are cheap in a recession to obtain improved or different

business premises. For these and many other reasons an autocrats?

speed of decision will give their business an edge. Having a clear

chain of command is another advantage of having autocratic leadership.

This leads to centralisation in an individual organisations structure,

with the autocrat at the top taking most or all of the key decisions,

ensuring tight financial controls and clear targets. There will

be coherent policies for production and marketing. Although rather

one-way, communication channels throughout the business will be plain

and instructive. These tight structures will hold firm, and I believe

will be an asset when faced with the realities and problems associated

with recession. An autocrat will strongly maintain the form of the

business, whether it is large or small, and will not lose sight of the

need for forward planning, even when their organisation is sailing in

troubled waters.

The autocratic style of leader has advantages over other styles in one

other important way crucial in an economic recession: They have a lack

of sentimentality. When downsizing becomes necessary, the unpleasant

issue of staff redundancy becomes unavoidable. The autocrat seems

particularly suited to making these hard decisions. Employees will be

laid off in a fashion that is least expensive to the business, and this

type of leader will use this as an opportunity to lay off any deadwood.

Also, recession is likely to lead to redundancies in rival businesses,

and there becomes a chance to cherry-pick from the newly available talent.

Wages can be cut too, and contracts with weak business partners can become

more exploitative and profitable. This unsavoury side of business would

be best carried out by a ruthless autocrat.

One example of a successful autocrat is Alan Sugar, whose company

Amstrad is particularly prominent in the personal computer and satellite

dishes field. In this company there is a power culture dominated by

one individual. Here, the company structure can be seen as a web, with

all the key decisions coming out from the centre. The clear advantage

to Amstrad in being run this way is that Sugar?s speed and clarity of

action enables the firm to tie up deals rapidly in an ever changing and

expanding market. Few decisions are taken collectively or by committee,

and the whole organisation works without many of the bureaucratic,

hierarchical middle management layers of its rivals. There is instead

a dynamic central force exercising a wide span of control. During the

1980’s his star soared because he had caught the personal computer market

at exactly the right time. At the start of the 1990’s recession Amstrad’s

share price plunged, but Sugar bounced back and de-merged successful!

ly with Viglen in 1997.

The autocratic leader can be bad in one area that is particularly

relevant in times of recession: They are likely to cause frustration

and resentment in their workforce. ?Some workers can be left to monitor

their own work and use their initiative profitably for their company? [2]

Laying down the law and imposing their will are two behavioural traits

of the autocrat. They will by their habit of overruling the decisions

of their underlings, trample on the egos of key workers. For example

if they change marketing strategy without consultation they upset a

line of people from the marketing director to the lowest operative in

this section of a business, they will feel undermined and powerless.

This may lead to a general frustration and a sense of a lack of worth

for individual and collective groups of employees, causing these workers

to lose motivation at a crucial time in the business cycle.

Over dependency on one person is a negative aspect for any size of

company. The autocrat takes and holds onto power ruthlessly, and is

notoriously bad at delegating key authority. There are many potential

dangers with this. One is that some physical problem may arise,

such as illness or a major stress problem, putting the leader out of

action for a short or prolonged period. New figures will have to take

over the running of affairs and because the autocrat organises things

in an authoritarian way, no logical replacement(s) can step into the

autocrats? shoes. A period of confusion in the command chain will ensue

and there may even be a potentially damaging internal power struggle.

There is a modern trend towards worker-participation in company decision

making, indeed this is a mandatory requirement of the ?European Social

Chapter? that Britain signed up to in 1997. The intention here is

?give workers the opportunity to discuss common concerns such as job

security or health and safety.?[3] The autocrat will quite likely run into

problems here, because they usually take decisions without consultation

with others. Another potential problem is with Trade Unions. Although

these are in decline in membership numbers and are under-represented

in many new high-tech and service industries, they still have a big

influence in many areas. The autocrat must surely be less likely to

reach satisfactory conclusions in any negotiations that they may have

with the unions than less confrontational leaders. Their authoritarian

and often confrontational personality could lead to numerous potential

difficulties, possibly even causing strikes or employees ?working to rule!

?.

Three other leadership styles of leadership are; the bureaucratic style,

the democratic style and the free reign style. A bureaucrat manages

strictly by the rulebook. The advantages of this are that there is

predictability and consistency, and every person knows exactly where

they stand. The disadvantage is when problems arise that are outside

the rulebook, such as economic recessions, then the leader is paralysed.

The democrat works well with experienced and confident employees who

can join in with group discussions and decision making, this would seem

particularly good in a small company. On the negative side decisions can

take too long to reach, which is very bad in a slump, and the leader can

lose overall control and evade their responsibilities at crucial times.

?The free reign leader sets goals for subordinates and clear parameters

within which they should work.? [4] This can work if employees are capable

in their field. However, there is a high risk with this sty! le because

of the total reliance on the abilities and motivation of the workers.

In conclusion it seems, on the balance of arguments used here, that in

times of economic recession, the best leader for any size of business

is the autocrat. In a troubled period for a business, speed of action,

decisiveness and a lack of sentimentality become a necessity. Decisions

in a recession become tough, laying off employees for example is a

stressful business. Also, having less bureaucracy in the organisation

is helpful. The dictatorial autocrat will impose their wishes clearly

and ruthlessly, and their dynamism is likely to give their business a

definite edge over competitors.

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