This study examines the effects of principal leadership styles on the development of the working styles of seven local school councils in Memphis (Tennessee) during their first 15 months of operation. The successful implementation of a school-based decision making (SBDM) management model depends upon the ability of the local school council to develop an effective working style. The councils are comprised of parents, community residents, teachers, and other assigned school staff. An analysis of information obtained from observations, interviews, and reviews of documents found that the nature of principal leadership was related to the nature of initial council functioning, but the principal was not the sole facilitating factor. The following findings are reported: (1) principals who exhibited laissez-faire and democratic leadership styles encouraged councils to function cooperatively; (2) authoritarian principals inhibited cooperative council functioning, especially when information was controlled, communication with the central office and administrators was limited, and teachers did not advocate involvement in decisions; and (3) councils were more likely to function cooperatively when chairpersons were strong leaders, council members cooperated with the director and the professional association, and there was a common understanding of the council's role. Four figures illustrating the evolution of council working styles are included. A list of 16 references is appended. (FMW)