Management models: understand types and how to choose

There are a number of management models coexisting in the labor market, such as hierarchical, by skills and horizontal. Finding the best format for your company is not an easy task, as it depends a lot on the sector in which it operates, as well as on values ​​and purposes.

To help you with this task, we will talk about the evolution of business and people management throughout history, as well as detailing the main models, each meeting the needs of the organization. Good reading!

What is a management model?

In a simplified way, a management model is a way of managing. It is how organizations make decisions about available resources – financial, material and human – to achieve their goals.

Thus, we can say that management models are norms and principles that guide managers in choosing the best alternatives for managing companies.

Business and people management, the beginning

We tend to recognize contemporary business and people management models as unique. However, we ignore the long list of successful organizations – public and private – in history. Many leading companies have performed impressive leadership development procedures that are now considered outdated.

In fact, the concepts of management and leadership emerged a long time ago, with the advent of civilizations. In order to reign and offer protection to citizens, pharaohs and kings needed to collect taxes. They were unable to perform these basic tasks without management and leadership to share roles and responsibilities in the kingdom. The beginnings, therefore, of management begin with the evolution of the first communes and the growth of old societies.

Evidence shows that the first successful HR practices in history occurred in armies. They demanded a good organization of positions and tasks, even if they used labor without formal education.

From the personal department to modern HR

The history of HR evolution begins with the Industrial Revolution, which started in England. In it, the founding of large factories has significantly increased the demand for workforce and the rapid development of new inventions and approaches has dramatically changed the world.

Fast and cheap production has become a priority for many industries. To meet the demand, the factories hired thousands of workers, men, women and children, who produced for up to 16 hours a day.

It did not take long for the negative consequences of long hours for workers and companies to be observed, given the low productivity under these conditions. Governments have begun to intervene to implement fundamental human rights under labor safety legislation.

Organizations were then forced to create the personnel department, which had a more bureaucratic and service bias. The area dealt with all issues related to employees and was responsible for fully complying with the newly introduced legal requirements.

Models of people and business management

From the First Industrial Revolution to today, we observe the evolution of business and the work environment guided by different management examples. The adhesion of people management models by companies is guided by different elements, the main ones being:

• Principles
• Policies
• Law Suit
• Structure
• Management style
• Industries in which they operate

In some cases, given the diversity of elements that guide companies, it is possible for an organization to have characteristics of more than one management model at the same time, which we start to unravel in the following topics:

Authoritarian, autocratic or vertical management

It is a model in which the person who is the manager assumes the responsibilities individually and the team, in theory, is exempt in the event of failures and structural problems in the processes, as decision-making came from top to bottom. It is the famous “send who can and obey who has judgment”.

In this model, the team does not have much voice, because decision making tends to be cascaded top to down.

Flexible management model

Although it maintains some aspects of a vertical and hierarchical structure, this type of management allows greater participation of employees in decision making.

Practices such as delegation of tasks, constant feedbacks and recognition of the team’s achievements are present in companies that adopt the flexible people management model.

Performance management

The performance management model is based on improving the performance of employees in order to achieve the company’s results.

Through the individual learning and development of each employee, in this type of management, it is possible to achieve good results with the use of human capital.

Competency management

In the competency management model, the skill of each employee is identified and maximized in favor of the team and the business. This type of management takes into account the technical and behavioral skills of employees.

In this format, companies understand that it is much better to retain the professional’s qualities and offer feedback and training so that he can change negative points, instead of dismissing him immediately and trying to find a better qualified employee.

Value chain management

The phrase “adding value to your business” defines this management model very well, as it is based on meeting the needs and expectations of each client.

It is as if it were a more personalized service, because the company adapts to that reality and prepares all the planning thinking about the specific demands of the consumer. In this model, the professional needs to be versatile and easily adapt to different routines.

Horizontal management model

In the wake of globalization and the emergence of start-ups that have become, in a short time, technology giants, we observe a boom in modern administrative theories willing to deal with diverse motivations and a plural workforce. Among them, there is horizontal management, practiced at VAGAS.com.

It breaks the verticalization format of the structures, as in other models previously analyzed here. In a vertical organization, for example, decisions always come from top to bottom, following the hierarchy. Employees are given a set of guidelines to follow and must work according to what is proposed to them.

On the other hand, horizontal organizations empower their employees to make daily operational decisions. In this structure, there is autonomy for employees, who can act according to what they believe to be best in the work environment, in relation to schedules, behavior, structural processes, among others – as long as there is a consensus with the rest of the team.

However, nothing should be messed up. At the same time that independence is welcomed, responsibility increases.

The main characteristics of this management model are autonomy with the establishment of goals, strong collaboration and communication between the company’s employees.

How is horizontal management in practice?

For Ligia Lotério, SEO specialist at VAGAS.com, horizontal management helps to highlight the company’s design. “Everyone works guided by purpose, and not just with the intention of earning a salary or pleasing bosses,” he says.

In the professional’s view, it is stimulating to work in a horizontal company, since it allows the creation of true goals and promotes mutual respect between employees.

The SEO specialist also highlights the independence of professionals as a positive side of horizontal management. “It is a model that gives a lot of autonomy to employees, but requires proactivity, because, after all, you have no one to give you orders”.

Without hierarchies and commands, the model works as a great inducer of collaboration and learning among professionals. “The exchange of knowledge does not happen only from top to bottom, as in the vertical model”, says Ligia.

In this way, highlights the executive, the employee puts himself in a more humble position to learn from colleagues, regardless of positions, “This strengthens friendship, ‘let’s learn together’ and ‘let’s grow together’. There is no atmosphere of rivalry ”, he highlights.

How to choose the best management model for your company?

a management model it involves choices at the most fundamental level about company management.

These decisions shape the company’s specific practices and behaviors. As these principles are invisible and rarely explicit, it is often difficult to select a people management model that considers the following topics:

• Personal values ​​and ideals
• Personality of managers
• Company production goals
• Team size
• Profile of led professionals
• Organizational culture
• Internal company policies
• Socioeconomic scenario
• Market competitiveness

By understanding the management principles that operate within companies and the alternatives, it is possible to make conscious and hugely beneficial changes. However, for this it is necessary to consider the following themes:

Conscious choice

There is no “best management model”, just as there is no old set of principles that needs to be replaced by a new one. Instead, there are choices to be made. Therefore, the most appropriate decision depends on circumstantial and competitive factors.

Competitive advantage

Remember: companies that generate competitive advantage from their management model are those that make conscious and distinct choices about which principles to follow.

Market forces

Three market forces are making companies familiar with problems related to people management as they have never done before. One is the changing expectations of employees, especially employees of generations Y and Z, who demand more humane, flexible and fun workplaces.

The second is technological change and, in particular, the emergence of “Web 2.0” technologies, which allow collaboration between peers and the transfer of information in ways that were impossible 10 years ago.

And the third is the emergence of new competitors, usually from emerging economies, such as India, that do not necessarily start from the traditional management principles that Western economies consider standard. The innovation of the management model is not a new concept, but its potential value has never been greater.

Future management models

Experts in people management and futurologists point out that more autonomous and collaborative models will gain prominence in organizations.

What is known is that the future of Human Resources is full of challenges and, perhaps, new models of people management will still be created to account for the new times. But this debate is certainly for another post!

Do you want to know more about horizontal management and how it differs from other management models? How about, then, also read the report A Company Without Bosses – Inside Horizontal Management?