2.3 Leadership and Management

What is the difference between Leadership and Management?

  • Leaders create targets and vision

  • Managers delegate and manage subordinates in order to meet these visions and targets

Management

Planning: setting clear objectives.

Organising: dividing the work into smaller tasks and delegating to others.

Staffing: having the 'right' person in the 'right' job (known as Human Resource Management).

Directing: decision-making and giving instructions to others.

Budgeting: preparing a detailed financial plan for the next trading year.

Co-ordinating: Bringing the various parts of the business together.

Command & Control

Manager

  • Plans, budgets, Organizes allocates resources

  • Controls and solves problem

  • Shows direction and vision

  • Aligns, influences, motivates and inspires

Vocabulary:

Hierarchy - system or organization in which people or groups are ranked one above the other according to status authority

Organization Chart - visual representation of a firms structure

Chain of Command - is a hierarchy of authority where those at the top of the organization direct and control the activities of the organizational members below them.

Span of Control - refers to the number of subordinates a supervisor has.

Subordinate - a person under the authority or control of another within an organization.

Line Manager - a person with direct managerial responsibility for a particular employee.

Flat/Tall Structure

Delegation - a body of delegates or representatives; a deputation.

Centralization - is the process by which the activities of an organization, particularly those regarding planning and decision-making, become concentrated within a particular location or group, keeping all of the important decision-making powers within the head office or the centre of the organisation.

Leadership

Laissez-faire - This is where employees are set objectives, and then they have to decide how best to achieve them using the available resources. This method of leadership can result in high levels of enthusiasm for the task in-hand, but it can at times rely too much on the skills of the workforce.

(Example: Agricultural Co-ops)

Paternalistic - Paternalistic leaders treat their employees as families; they guide, develop and nurture their employees. This is split into two groups: negative and positive. Negative paternalistic leaders treat their employees and incapable, so they guide and and control them. A positive paternalistic leader is the opposite; treating their employees as capable and develops and nurtures their productivity.

Situation Leadership - Using the right leadership style for the right situation. For example, an autocratic leadership style can be adopted for quick decision making processes while laissez-faire can be adopted to empower employees.

Autocratic - This is often referred to as an authoritarian leadership style, and it basically means that the people at the top of an organisation make all the decisions and delegate very little responsibility down to their subordinates. Communication is top-down, with no opportunity for feedback to the leader. It can cause much resentment and frustration amongst the workforce and it is not very common in today's business world.

Democratic - This involves managers and leaders taking into account the views of the workforce before implementing any new system. This can lead to increased levels of morale and motivation amongst the workforce, but it can also result in far more time being taken to achieve the results since many people are involved in discussing the decision.