Backnotes

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Management and Leadership

  • Manager- responsible for setting objectives, organising resources, and motivating staff so that the organisation’s aims are met.

FUNCTIONS OF MANAGERS

  • Setting objectives and planning
    • Senior management will establish overall strategic objectives, and these will be translated into tactical objectives for the less-senior managerial staff.
    • The planning needed to put these objectives into effect is also important. A new production or marketing objective will require the planning and preparation of sufficient resources.
  • Organising resources to meet the objectives
    • This is not just about giving instructions. People throughout the business need to be recruited carefully and encouraged to take some authority and to accept some accountability via delegation.
    • Senior managers will ensure that the structure of the business allows for a clear division of tasks and that each section or department is organised to allow them to work towards the common objectives.
  • Directing and motivating staff
    • This means guiding, leading, and overseeing of employees to ensure that organisational goals are being met.
    • The significance of developing staff so that they are motivated to employ all of their abilities at work is now widely recognised. This will make it more likely that organisational aims are achieved.
  • Coordinating activities
    • As the average size of business units increases – especially true for multinationals – so the need to ensure consistency and coordination between different parts of each firm increases.
    • The goals of each branch, division, region and even all staff must be welded together to achieve a common sense of purpose.
    • At a practical level, this can mean avoiding the situation where two divisions of the same company both spend money on researching into the same new product, resulting in wasteful duplication of effort.
  • 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. It is just as important to provide positive feedback when things keep going right.

MANAGEMENT ROLES

  • Henry Mintzberg (The Nature of Managerial Work, 1973) identified ten roles common to the work of all managers. These are divided into three groups:
    • Interpersonal roles- dealing with and motivating staff at all levels of the organisation
      • Figurehead- symbolic leader of the organisation and undertaking duties of a social or legal nature
        • Examples- opening new factories/offices, hosting receptions, giving important presentations
      • Leader- motivating subordinates; selecting and training other managers/staff
        • Examples- any management tasks involving subordinate staff
      • Liaison- linking with managers and leaders of other divisions of the business and other organisations
        • Examples- leading and participating in meetings; business correspondence with other organisations
    • Informational roles- acting as a source, receiver, and transmitter of information
      • Monitor (receiver)- collecting data relevant to the business’ operations
        • Examples- attending seminars, business conferences, research groups; reading research reports
      • Disseminator – sending information collected from external and internal sources to the relevant people within the organisation
        • Examples- communicating with staff within the organisation using appropriate means
      • Spokesperson- communicating information about the organisation- its current position and achievements- to external groups and people
        • Examples- presenting reports to groups of stakeholders, communicating with the press and TV media
    • Decisional roles- taking decisions and allocating resources to meet the organisation’s objectives
      • Entrepreneur- looking for new opportunities to develop the business
        • Examples- encouraging new ideas from within the business and holding meetings aimed at putting new ideas into effect
      • Disturbance handler- responding to changing situations that may put the business at risk; assuming responsibility when threatening factors develop
        • Examples- 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 spending of the organisation’s financial resources and the allocation of its physical and human resources
        • Examples- drawing up and approving estimates and budgets; deciding on staffing levels for departments within departments
      • Negotiator- representing the organisation in all negotiations, for example with the government
        • Examples- conducting negotiations and building up official links between the business and other organisations

LEADERSHIP

  • Leadership- the art of motivating a group of people towards achieving a common objective
  • Leadership is a key part of being a successful manager- it involves setting a clear direction and vision for an organisation that others will be prepared to follow.
  • Employees will want to follow a good leader and will respond positively to them- a poor leader will often fail to win over staff and will have problems communicating with and organising workers effectively
  • Characteristics common amongst good leaders:
    • They have the desire to succeed and natural self-confidence that they will succeed.
    • They possess the ability to think beyond the obvious – to be creative – and to encourage others to do the same.
    • They are multitalented, so that they can understand discussions about a wide range of issues affecting their business.
    • They have an incisive mind that enables the heart of an issue to be identified rather than unnecessary details.

IMPORTANT LEADERSHIP POSITIONS IN A BUSINESS

  • Directors
    • These senior managers are elected to office by shareholders in a limited company- they are usually head of a major functional department, such as marketing
    • They will be responsible for delegating within their department, assisting in the recruitment of senior staff in the department, meeting the objectives for the department set by the board of directors and communicating these to their department
  • Manager
    • Any individual responsible for people, resources or decision-making, or often all three, can be termed a manager
    • They will have some authority over other staff below them in the hierarchy
    • They will direct, motivate and, if necessary, discipline the staff in their section or department
  • Supervisors
    • These are appointed by management to watch over the work of others. This is usually not a decision-making role, but they will have responsibility for leading a team of people in working towards pre-set goals
    • The modern role of these members of staff is less of an inspector and much more of a work colleague who is appointed to help staff achieve objectives in a cooperative spirit
  • Workers’ representatives
    • These are elected by the workers, either as trade union officials or as representatives on works councils in order to discuss areas of common concern with managers.

LEADERSHIP STYLES

  • Autocratic leadership- a leadership style that keeps all decision-making at the centre of the organisation
    • Main features
      • leader takes all decisions
      • gives little information to staff
      • supervises workers closely
      • only one-way communication where the leader issues instructions but will not encourage any feedback from the workers
      • workers only given limited information about the business
    • Drawbacks
      • demotivates staff who want to contribute and accept responsibility
      • decisions do not benefit from staff input
    • Possible applications
      • defence forces and police where quick decisions are needed and the scope for discussion must be limited
      • times of crisis when decisive action might be needed to limit damage to the business or danger to others
  • Democratic leadership- a leadership style that promotes the active participation of workers in taking decisions
    • Main features
      • participation encouraged two-way communication used, which encourages feedback from staff
      • workers given information about the business to allow full staff involvement
    • Drawbacks
      • consultation with staff can be time-consuming
      • on occasions, quick decision making will be required
      • level of involvement – some issues might be too sensitive (e.g. job losses) or too secret (e.g. development of new products)
    • Possible applications
      • most likely to be useful in businesses that expect workers to contribute fully to the production and decision-making processes, thereby satisfying their higher-order needs
      • an experienced and flexible workforce will be likely to benefit most from this style
      • situations that demand a new way of thinking or a new solution, then staff input can be very valuable
  • Paternalistic leadership- a leadership style based on the approach that the manager is in a better position than the workers to know what is best for an organisation
    • Main features
      • managers do what they think is best for the workers
      • some consultation might take place, but the final decisions are taken by the managers – there is no true participation in decision-making
      • managers want workers to be happy in their jobs
    • Drawbacks
      • some workers will be dissatisfied with the apparent attempts to consult, while not having any real power or influence
    • Possible applications
      • used by managers who have a genuine concern for workers’ interests, but feel that ‘managers know best’ in the end – when workers are young, unskilled, untrained, or newly appointed, this might be an appropriate style to employ
  • Laissez-faire leadership- 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
    • Main features
      • managers delegate virtually all authority and decision-making powers
      • very broad criteria or limits might be established for the staff to work within
    • Drawbacks
      • workers may not appreciate the lack of structure and direction in their work – this could lead to a loss of security
      • the lack of feedback – as managers will not be closely monitoring progress – may be demotivating
    • Possible applications
      • when managers are too busy (or too lazy) to intervene
      • may be appropriate in research institutions where experts are more likely to arrive at solutions when not constrained by narrow rules or management controls

MCGREGOR’S THEORY X AND THEORY Y

  • According to Douglas McGregor, as a result of his studies in the 1950s, one of the most important determinants in which style of leadership to use is the attitude of managers towards their workers
  • He identified two distinct management approaches to the workforce- Theory X and Theory Y
    • Theory X
      • According to McGregor, Theory X managers view their workers as lazy, disliking work and unprepared to accept responsibility, needing to be controlled and made to work.
      • Managers with this view will be likely to adopt an autocratic style of leadership.
    • Theory Y
      • According to McGregor, Theory Y managers believed that workers did enjoy work and that they found it as natural as rest or play. They would be prepared to accept responsibility, were creative and they would take an active part in contributing ideas and solutions to work-related problems.
      • Managers with this view will be likely to adopt a democratic style of leadership
  • McGregor DID NOT suggest that there were two types of workers, X and Y, but the attitudes of management to workers could, in extreme cases, be described by these two theories
  • Most managers have views somewhere in between the two extremes of Theory X and Theory Y
  • The general view is that workers will behave in a particular way as a result of the attitude that management have towards them

FACTORS INFLUENCING WHAT LEADERSHIP STYLE IS USED

  • The training and experience of the workforce and the degree of responsibility that they are prepared to take on
  • The amount of time available for consultation and participation
  • The attitude of managers, or management culture – this will be influenced by the personality and business background of the managers, e.g. whether they have always worked in an autocratically run organisation
  • The importance of the issues under consideration – different styles may be used in the same business in different situations; if there is great risk to the business when a poor or slow decision is taken, then it is more likely that management will make the choice in an autocratic way

INFORMAL LEADERSHIP

  • Informal leader- a person who has no formal authority but has the respect of colleagues and some power over them
  • These informal leaders are people who have the ability to lead without formal power, perhaps because of their experiences, personality, or special knowledge
  • They may have more influence over workers than formal leaders, especially if the latter are just seen as supervisors of work rather than true leaders and motivators
  • In an organisation where employer– employee relationships are not based on trust, the person concerned could quickly lose support if they were seen to be joining the ‘other side’.
    • To cut them out or in some way to ignore them could be equally disastrous, as they may gather around them many worker supporters and this could lead to disruption of production or other types of industrial action.
  • In an ideal business situation, where workers and employers work together in a trusting relationship, managers should attempt to work with the informal leaders to help achieve the aims of the business- this is best done by attempting to ensure that the aims of the informal leader and the group are common with, or fit in with, the aims of the business

EMOTIONAL INTELLIGENCE

  • Emotional intelligence (EI)- the ability of managers to understand their own emotions, and those of the people they work with, to achieve better business performance
  • Many studies have suggested that business performance can be improved by appointing people with high levels of emotional intelligence – not necessarily the brightest people in traditional academic terms
  • Daniel Goleman suggested that there are four main EI competencies that managers should try to develop and improve on
    • Self-awareness − knowing what we feel is important and using that to guide decision-making. Having a realistic view of our own abilities and having self-confidence in our abilities.
    • Self-management − being able to recover quickly from stress, being trustworthy and conscientious, showing initiative and self-control.
    • Social awareness − sensing what others are feeling, being able to take their views into account and being able to get on with a wide range of people.
    • Social skills − handling emotions in relationships well and accurately understanding different social situations; using social skills to persuade, negotiate and lead.