When democracy works
We learned last week that when family businesses are just starting out and founders have more knowledge, skill, and experience than the employees, a dictatorship leadership style may work best.
When decisions need to be made quickly and decisively, dictators can ensure that businesses avoid waste and maximize efficiency.
Under a benevolent dictatorship, run by charismatic father and mother figures, employees readily give their trust and loyalty in exchange for stable jobs and other benefits promised them by the founders.
When the business grows
When family businesses grow, and employees are skilled and motivated, a dictatorship does not work well.
Skilled employees demand to be heard. They also want their suggestions to be taken into serious consideration and implemented, if necessary.
In a democracy, leaders provide employees as much information and resources as possible for them to do their work effectively.
They allow, and even encourage, employees to make decisions and to take initiatives.
They have no problem with debate and free flow of ideas, believing that freedom of expression can lead to innovations and fresh solutions.
In a democracy, leaders allow and even expect employees to set their own goals, as long as these are aligned with the business. Leaders encourage self-development (e.g. they give time off with pay for employees who become leaders in church groups) and reward achievement.
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When democracy works