Autocratic business leadership in a recession
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
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
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 Sugars 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!
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