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What is Laissez-faire Leadership Style?

Laissez-faire leadership style is a radical democratic leadership style where leaders take a “hands-off”approach, leaving all (or majority of) decision making tasks to their employees. This approach has grown in popularity over the last 2 decades and many global firms are using it today despite the fact that researchers have discovered that this management style has the lowest productivity rate among employees. Indeed the philosophy sounds attractive: give employees full freedom and they will be highly motivated, but does it actually work?

“Laissez-faire leadership style: The leader provides little or no direction and gives employees as much freedom as possible. All authority or power is given to the employees and they must determine goals, make decisions, resolve problems on their own” (Khan et al. 2015)

The SEMCO Case Study – Example

Ricardo Semler, founder of SEMCO in Brazil, is one of many business leaders that implemented the “hands-off” leadership approach successfully. Following his father’s footsteps he first imposed high controls, rigid processes and long-working hours which demotivated his employees leading to a high staff turnover and low motivation levels. After years of struggling with an authoritative leadership style, in 1990 he implemented a radical change and decided to give his employees more freedom and be less involved in managing the business. Semler defined his new leadership philosophy as follows: “leadership is most effective when the boss is nowhere near the office, nowhere near his employees, in a word – gone”.

Semler defined his new leadership philosophy as follows: “leadership is most effective when the boss is nowhere near the office, nowhere near his employees, in a word – gone”.

Few highlights of Ricardo Semler’s “hands-off” leadership style include the following:

• SEMCO offers complete freedom to employees to decide when, what and how the tasks are performed
• About 3000 SEMCO employees set their own working hours and their salaries.
• Their supervisors are hired and reviwed by the subordinates.
• If the employees had spent Saturday afternoon in the office then they are encouraged to spent their Monday morning at the beach.
• There is no organisational chart as such in the organisation, no corporate value statement, no 5 year plan is implemented as most of the organisation does.
• The employees are not required to follow any dress code.
• There are no written rules or policy statements, as SEMCO is quite flexible.

Criticism of Laissez-faire Style

A 2007 survey among Norwegian firms has found that laissez-faire leadership was positively correlated with role conflict, role ambiguity, and conflicts among coworkers (Skogstad et al. 2007).  The results also supported the notion that laissez-faire leadership behavior is a destructive leadership behaviour. Moreover, in laissez-faire style of leadership there is no exchange relationship between leaders and followers. It represents a passive non-transactional style, in which “decisions are delayed, actions postponed, and managerial authority is misused or unutilized” (Skogstad et al. 2007)

Past researchers supported the notion that laissez-faire leadership behavior is a destructive leadership behaviour in forms of employee stress.

Even though the laissez-faire style of leadership has been dismissed by many researchers  as leading to poor employee productivity, there are certain circumstances when this style can be very effective. In those environments where group members are highly skilled and motivated, it can actually produce excellent results. For a example, a laissez-faire leader would thrive in a design field. As team members get to enjoy a great deal of freedom (as opposed to micromanaging), they often feel more inspired and creative.

QUIZ! Find out more about which leadership style you lean towards naturally by taking this quick and easy quiz developed by Mindtools: What’s your leadership style?

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References:

Mullins, L. and Christy, G. (2013). Management and organisational behaviour. Harlow: Pearson

Maddux W.W., Swaab R., Tanure B., Williams, E. (2014). Ricardo Semler: A Revolutionary Model of Leadership

Skogstad A., Einarsen S., Torsheim T., Aasland M.S., and Hetland H. (2007) The Destructiveness of Laissez-Faire Leadership Behavior (PDF Download Available). Available from:https://www.researchgate.net/publication/6547331_The_Destructiveness_of_Laissez-Faire_Leadership_Behavior [accessed Sep 19, 2017].