Before inserting citations and creating a Reference list, it is best to set your ‘Bibliographic style’. There is a short list of 12 styles to choose from. This is set by Microsoft.
This guide shows examples using the APA (6th edition) style.
This will open the 'Citations and Bibliography' section of Word
Click the drop down arrow to the right of 'Style'
Choose the style you require (e.g. APA)