2.3 Leadership & management

The functions of management

• Manager: responsible for setting objectives, organizing resources and motivating staff so that the organization’s aims are met.
  • Setting objectives and planning: all good managers think ahead.
  • Organizing resources to meet the objectives: this is not just about giving instructions. People throughout the business need to be carefully recruited and encouraged to take some authority and to accept some accountability via delegation.
  • Directing and motivating staff: guiding, leading and overseeing employees to ensure that organizational goals are met.
  • Coordinating activities: as the average size of business units increases, which is especially true for multinationals, so the need to ensure consistency and coordination between different parts of the organization increases.
  • Controlling and measuring performance against targets: management by objectives establishes targets for all groups, divisions and individuals. It is management’s responsibility to appraise performance against targets and to take action if underperformance occurs.

Mintzberg’s management roles

• Interpersonal roles - dealing with and motivating staff at all levels.

  • Figurehead: symbolic leader of the organization. Examples:
  • Opening new factories/offices
  • Hosting receptions
  • Giving important presentations
  • Leader: motivating subordinates, selecting and training other managers/staff. Example:
  • Any management tasks involving subordinate staff
  • Liaison: linking with managers and leaders of other divisions and other organizations. Examples:
  • Leading and participating in meetings
  • Correspondence with other organizations

• Informational roles - acting as a source, receiver and transmitter of.

  • Monitor (receiver): collecting data relevant to the business’s operations. Example:
  • Attending seminars, business conferences, research groups, reading research reports
  • Disseminator: sending information collected from external and internal sources to the relevant people within the organization. Example:
  • Communicating with staff within the organization using appropriate means
  • Spokesperson: communicating information about the organization (its current position and achievements) to external groups. Example:
  • Presenting reports to groups of stakeholders (e.g. annual
    general meeting) and communicating with the media

• Decisional roles - taking decisions and allocating resources to meet objectives.

  • Entrepreneur: looking for new opportunities to develop the business. Example:
  • Encouraging new ideas from within the business and holding meetings to put new ideas into effect
  • Disturbance handler: responding to changing situations that may put the business at risk and taking responsibility when threatening factors develop. Example:
  • Taking decisions on how the business should respond to threats such as new competitors or changes in the economic environment
  • Resource allocator: deciding on the allocation of the organization’s financial, human and other resources. Examples:
  • Drawing up and approving estimates and budgets
  • Deciding on staffing levels for departments
  • Negotiator: representing the organization in all important negotiations, e.g. with government. Example:
  • Conducting negotiations and building up official links between the business and other organizations

Differences between management and leadership

• Leadership:

  • Motivating and inspiring others
  • Innovators who encourage others to accept change
  • Stems from personal qualities or traits
  • Natural abilities and instincts
  • Believes in doing the right thing
  • Respected and trusted by followers - they want to follow because of leader's personality
  • Creates and develops a culture of change

• Management:

  • Directing and monitoring others
  • Problem-solvers
  • Official position of responsibility in the organization
  • Skilled and qualified to perform role
  • Believes in doing things right
  • Listened to by others because of status - not necessarily because of personality
  • Accepts and conforms to the “norms” of the organization

Leadership styles

• Autocratic leadership: style of leadership that keeps all decision-making at the centre of the organization.

• Paternalistic leadership: type of fatherly style typically used by dominant males where their power is used to control and protect subordinate employees who are expected to be loyal and obedient.

• Democratic leadership: leadership style that promotes the active participation of workers in taking decisions.

• Laissez-faire leadership: leadership style that leaves much of the business decision-making to the workforce a “hands-off” approach and the reverse of the autocratic style.

• Situational leadership: effective leadership varies with the task in hand and situational leaders adapt their leadership style to each situation.

Ethical considerations and leadership styles

• Ethical leadership: leading by knowing and doing what is “right”.
  • Ethical leaders must act and make decisions ethically
  • Ethical leaders must also lead ethically in the ways they treat people in everyday interaction, in their attitudes to people and situations, in the ways they motivate and in the directions in which they lead their organization.
  • Tangible aspect of ethical leadership: the way the leader works with and deals with customers, suppliers and employees, in his/her statements and actions.
  • Intangible aspect of ethical leadership: it lies in the leader’s character, in the decision-making process, in the set of values and principles that underpin the leader’s decisions and in their courage to make ethical decisions in challenging situations.