IB Business Management Unit 2/Section 2.3 Leadership

2.3 LEADERSHIP On completing this chapter you should be able to Comment the key functions of management Distinguish management versus leadership Discuss the following leadership styles: autocratic paternalistic democratic laissez-faire situational Examine how ethical considerations and cultural differences influence leadership and management styles in an organization.

the key functions of management Key Roles of management According to Henri Fayol: Planning Organizing Commanding Coordinating Controlling & Measuring

the key functions of management Key Roles of management according to Charles Handy: General Practitioners: ensure wellbeing of firm (staff turnover, productivity, customer satisfaction). Confronters of dilemmas: delegate work – retaining responsibility, management of stakeholders, organizational conflict Balancers of cultural mixes: to get the best out of each individual

the key functions of management Key Functions of management according to Peter Drucker Setting organizational objectives Organizing tasks and people Communicating with and motivating people. Measuring performance. Developing people: bringing out the best – giving opportunities

Leadership vs. management Process of influencing and inspiring others to achieve Org. Objectives. Have a longer term perspective. Deal with strategic decisions. Know that the best thing to actually do is. The art of getting things done through people. Problem solving, decision-making: planning, organizing and coordinating human and capital resources to achieve Org. objectives. Deal with tactical decisions. Time & Devotion: 24 hrs. 9 to 5 Roles and Responsibilities: broader range/ask what and why. Innovative thinkers who inspire. Deal with routing/ask how and when. Know how best to administer day to day operations. Influence on others: Inspire and motivate through action. Focus on people – are socially engaged. Inspire & entrust creative and talented people to help develop the organization. Empower others Direct and control: Have a position of authority. Focus on accomplishing tasks. Delegate tasks to subordinates Risk Taking: Take risk challenging the status quo to move the org. forward. Does the right thing (sets goals) /Innovators Follow predetermined rules and policies. Do things right (achieve goals) Implementers Vision: Leaders create a culture of hope. Shine in times of change Abide by the procedures and culture of the organization. Do well in stable business environments. Stem from personal qualities or traits Official position of responsibility in the organisation.

Leadership styles Autocratic Leadership: Makes all the decisions and prefers not to delegate responsibility. Tells subordinates what to do. Style of leadership that keeps all decision-making at the centre of the organization. Refers to leaders who adopt an authoritarian approach by making all the decisions rather than delegating any authority to their subordinates. Appropriate: In situations that require quick decision-making (deadlines) or when critical decisions have to be made (crisis-accidents). When workers are unskilled or not trusted, and their ideas are not valued. Armed forces and police. .

Leadership styles 2. Paternalistic Leaders: Treat employees as if they were family members by guiding them through a consultation process and acting in the perceived best interest of their subordinates. The leader makes decisions on behalf of the team, building trust and loyalty in the process. A 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. Feedback is invited, improving morale, but the final decisions are still taken by senior management

Leadership styles 3. Democratic Leadership: A leadership style that promotes the active participation of workers in taking decisions. Involves employees in the decision-making process. Informs and consult staff and consider their views before making final decisions. Refers to leaders who take into account the views of others when making decisions. This participative leadership style means the decision-making is decentralized. Two-way communication is used, which allows feedback from staff.

Leadership styles 4. Laissez-faire Leadership (let them do it) : A leadership style that leaves much of the business decision-making to the workforce. A hands off approach and the reverse of the autocratic style. Is based on having minimal direct input in the work of employees. Instead allows subordinates to make their own decisions and to complete tasks in their own way. Leader sets objectives but it is up to employees how best to achieve them. Very broad criteria or limits might be established. From the employees point of view: Does not provide guidance and feedback (lack of structure and direction can lead to lack of security and demotivation).

Leadership styles 5. Situational Leadership: Effective leadership varies with the task in hand and the situational leaders adapt their leadership style to each situation (nature of task and workers skills and willingness to accept responsibility). Refers to the belief that there is no single leadership style that suits all situations. The “best” style depends on situational factors, such as attitudes, behavior and competencies of managers and workers. Is not based on a single approach, it is about using the right leadership style for the right situation.