8 Management and leadership

Activity 8.1 (page 144): Allstyles department store

1 Identify all of the different management functions that Rebecca fulfilled during this
busy day. [5]

The five functions identified in the textbook are all evident in Rebecca’s day:
(i) setting objectives and planning
(ii) directing and motivating staff
(iii) measuring performance against targets and taking action over
underperformance
(iv) organising resources to meet objectives
(v) coordinating activities.

2 Outline the personal qualities that you think Rebecca needed to carry out all of these
roles successfully. [6]

Any reasonable answer.

• Interpersonal skills would be needed to mediate between the two department
managers to avoid either manager being resentful over the outcome of the
discussion.
• An incisive mind would be needed to identify key problems and their cause,
e.g. the poor performance of the electrical department.
• Organisational skills would be required to cope with the wide variety of tasks
that needed to be tackled during the day.
• Communication skills are necessary to effectively communicate plans,
instructions and deal with the builders.

3 Examine the problems that this store might encounter if Rebecca was not an effective
manager. [9]

There are many possible consequences for Allstyles department store of ineffective
management. They include:
• Lack of coordination of activities, e.g. the electronic exercise bicycle being
stocked by two departments − this would waste scarce sales space.
• A lack of direction for staff, e.g. Rebecca has ensured that all managers
are prepared to deliver the store’s end-of-season sale − without this, the
organisational goals of Allstyles will not be met.
• A failure to plan for the future, e.g. it is crucial that Rebecca is able to plan
strategies for achieving the targets set by senior executives − it is also important
that she is able to ensure that senior executives set realistic goals for the store.

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 • Poorly motivated staff – this would affect the quality of customer service and
consequently reduce sales. Demotivated staff would be more likely to fail to
meet targets set.

Activity 8.2 (page 147): Disaster at the bakery

1 Identify the management roles that Eli seems to have demonstrated in this case. [4]

The management roles could be taken from the ten common roles identified by
Henry Mintzberg. Some of the key roles suggested by the text include:
• liaison − communicating with people outside the business, e.g. the owner of the
competing bakery
• monitor − collecting information from relevant sources, e.g. the commercial
estate agent
• disseminator − communicating with staff following the fire
• spokesperson − communicating information about the bakery to suppliers and
customers
• disturbance handler − responding to the changing situation of the business as a
result of the fire
• resource allocator − deciding how to use human resources.

2 What leadership style did Eli seem to be employing in the case? Explain your answer. [3]

Eli is employing an autocratic leadership style. He has taken a range of decisions

without discussion or consultation with workers/managers. As workers started to
arrive at the bakery, he ‘gave them all clear instructions’.

3 Discuss whether this was the appropriate style of management to apply in this
situation. [8]

Different styles of management may usefully be defined and brief consideration of

the relative merits of each discussed.

Appropriate
• In a crisis, decisions need to be taken
quickly. Consultation and discussion
would slow down decision making. Eli
needed to get some production up and
running immediately.
• Eli, although being autocratic, took
complete control of the situation
and showed strong leadership to his
employees at this difficult time. His style
may reassure workers that the crisis will
be overcome.
• With such a serious problem, a laissez-
faire approach may send the wrong
message to employees.
Inappropriate
• Involving workers in discussion
may lead to better decision
making. Workers may have had
useful ideas to contribute on how
to tackle the crisis. The adage that
‘two heads are better than one’
applies.
• The sales manager may feel
undermined by Eli’s decision to
contact customers. He might feel
that Eli does not trust him/her,
thus causing demotivation.

In this case, the judgement may be that the exceptional circumstances of a fire
destroying the bakery justifies a more autocratic style of management. There is no

Chapter 8 © Cambridge University Press 2010 2

 time for consultation and participation and there is potentially great risk to the
business if decision making is delayed. However, it might also be noted that as
it is a relatively small business more discussion could have been accommodated
without any significant impact on the length of decision making.

Top tip
Students often argue that a democratic style of
management is the best approach in the modern
business world. This may be true in some circum-
stances, but not in all circumstances. Sometimes an
autocratic style may be appropriate, e.g. during a
crisis when a leader needs to show leadership.

Activity 8.3 (page 149): Modern steel making requires a new

approach

1 How would you classify Kevin’s style of leadership according to McGregor – Theory X
or Y? Explain your answer. [4]

Kevin has an approach to management that suggests Theory X assumptions about

workers. The case provides the following evidence:
• Kevin has a set way of doing a job and believes that efficiency requires things to
be done that way.
• He gives clear instructions and does not expect workers to think for themselves.

2 Outline three ways in which methods of working and, with them, the expectations of steel
workers may have changed in the 25 years since Kevin started working at the plant. [6]

• Technological change − there is no manual work as the factory is now highly

automated and uses computers. Consequently, workers are educated and may
therefore expect to make decisions as part of their normal working day.
• No heavy work − automation has replaced heavy work. As controllers of
computer systems, workers will expect to make more use of their mental
capacity in the course of their work.
• Flexible shift system − employees have to be more flexible as they may do any
one of ten different jobs. As they are multi-skilled, they are used to solving
problems and are adaptable. This may mean that they are prepared to take on
more responsibility.

3 Discuss whether the leadership style used by Kevin is the best one to use in the
circumstances described. [10]

Appropriate
• Kevin does not have the skills/
personality to take a Theory Y
approach.
• Kevin’s style may ensure that
operations are carried out in a
consistent manner due to clear
instructions being given.
Inappropriate
• The workers that Kevin is responsible
for are multi-skilled and educated. They
are capable of making decisions and
do not need close supervision. Kevin is
not making the most of the skills these
workers possess.
(Continued)

Chapter 8 © Cambridge University Press 2010 3

 Appropriate
• Kevin has 25 years’ experience
and is knowledgeable about the
operations of the steel industry.
• He is in charge of $10 million
worth of equipment. It is important
that the furnace is run efficiently,
therefore clear instructions are
beneficial so that all workers know
what they have to do.
Inappropriate
• A Theory X approach will alienate the
workers in the blast furnace operation.
They will be demotivated as they are
being stripped of responsibility and
control over their working day.
• The workers do not approve of Kevin’s
style. There will be an increased
likelihood of conflict.

Evaluation may consider:

The leadership style may not be appropriate, but it may be the only style that works for
Kevin. Although the situation appears to demand a more Theory Y approach, in which
there is worker involvement and delegation, some studies have suggested (e.g. Fiedler,
1976), that it is difficult to change someone’s leadership style. From 800 studies, Fiedler
concluded that leaders are unable to adapt their style to a situation.

There is no evidence that the employees fit the Theory X assumptions about worker
behaviour and attitudes. These are workers who wish to take responsibility and would
benefit from a more participative style of management. Kevin’s approach may result in
workers gradually fulfilling his expectations of them and they will cease to contribute in
any meaningful way to the business.

Activity 8.4 (page 151): Informal leadership and tension

in the workplace

1 Outline possible reasons why the members of Zeke’s workgroup were so keen to follow
his lead and take his advice rather than that of Akiko and Keira. [6]

Possible reasons include:

• Zeke had been a team leader in the past. In that formal leadership role he may
have gained the respect of employees, with the effect that, even though he is no
longer the team leader, they still listen to his views.
• Akiko, who is the current supervisor, does not lead the team effectively; he is
more focused on doing his own job. Consequently, the workers may look to
Zeke for leadership.
• The suggestions that Zeke makes may be more consistent with the views of
the workers; after all, the production targets being set from above will require
greater effort from workers.
• Zeke may better understand the problems that workers face in fulfilling
management targets and is able to articulate the concerns of workers clearly.
Therefore, they follow his lead.

Chapter 8 © Cambridge University Press 2010 4

2 Discuss all of the options that could be considered by management to deal with the
issues raised by Zeke’s informal leadership of this workgroup. Recommend the most
appropriate option. [9]
The case study suggests a number of options for students to consider:
Option Benefits
Move Zeke • Makes use of Zeke’s influential • Any attempt to cut Zeke off
to a new status with workmates. He
position may be a natural leader.
to train • If Zeke is part of management
workers and is setting objectives for
training, he may be more
likely to adopt a management
perspective.
• As his job role would change,
this would distance him from
his current workmates.
Give Zeke • This could be conceived as
his old job enlightened management,
back given that Zeke had been
demoted for taking time
off and the rules have
subsequently been changed.
This would show that
management is considerate
and would encourage Zeke
to be more committed to the
goals of the organisation.
• Zeke already has informal
influence, therefore it is
better to make him part of
the formal management
team. He may then be more
likely to adopt a management
perspective.
• Akiko does not appear
to enjoy his role, so may
be happy to lose the
responsibility.
Give him • Zeke has a family to support
a formal and a warning may force him
warning to toe the management line.
Chapter 8 © Cambridge University Press 2010
Drawbacks
from his workmates may
backfire if it is perceived that
he has been moved because
he is a ‘trouble maker’. His
influence could then increase.
• Zeke may not set the type
of challenging targets that
management hopes for.
• Is the position of training new
workers really needed?
• Zeke may lose support from
workmates, as he may be seen
as ‘joining the other side’.
• This would show weakness on
the part of management, as
they are backing down over
Zeke’s role.
• This creates the problem of
having to demote Akiko.
Akiko may be resentful and
demotivated.
• Has Zeke actually broken any
disciplinary rules at the firm?
If he is being warned without
just cause, it may lead to
union action and escalate the
problem.
• Workmates may perceive the
treatment to be unfair and
heavy-handed. Thus Zeke’s
influence will be enhanced,
not reduced.
(Continued)
5
 Option Benefits Drawbacks
Work • It is suggested by the case that • Involving workers is time
with Zeke workgroups are told about consuming.
to help new targets. This autocratic • If workers are not convinced
achieve approach is potentially by Keira’s arguments and
business counterproductive. Keira she presses ahead with new
aims should discuss changes with targets, then workers may feel
Zeke and his workmates and that the consultation is just a
ensure they understand why paper exercise.
change is necessary. This may
marginalise Zeke if arguments
are persuasive.
• Workers may be able to
make relevant and beneficial
suggestions to improve
efficiency.

Revision case study 1 − answer provided on Student’s CD-ROM.

Essay
1 a Outline the main styles of leadership. [8]

Autocratic:
• Leader takes an authoritarian approach.
• Decisions are not discussed with workers.
• Leader instructs workers what to do and closely controls work.
• Workers are made to accept the decision.

Democratic:
• Workers play a full part in decision making.
• Leader consults workers and discusses decisions.
• Organisations, such as the John Lewis Partnership, describe their employees as
associates, emphasising their integrated role within the business.
• Decision making may be slower due to the amount of discussion that takes place.

Paternalistic:
• Leader aims to do what is in the best interests of their workers.
• Similar to autocratic, as the leader takes decisions alone.
• More consultative approach, as leader will listen to workers before taking
decisions.
• Decisions take into account the needs of workers as well as of the business.
• Leader tries to persuade the workers to accept the decision rather than simply
enforcing the decision.

Laissez-faire:
• This approach allows workers to get on with the job within very broad limits.
• This may be seen as an extreme form of democratic leadership, as workers are
able to take decisions for themselves.
• There is little management input into the work done by employees.

Chapter 8 © Cambridge University Press 2010 6

 b Examine the view that the appropriate style of leadership varies with business
circumstances. [17]

Autocratic:
• This approach may be useful in a crisis situation where decisions need to be
taken quickly. In a crisis there is no time to discuss issues with workers; leaders
may need to act quickly to minimise the damage to the business.
• This approach is typically used in armed forces and the police – there is a need
for swift decision making.
• This approach may be appropriate if workers are lazy and unwilling to take
responsibility.
• This approach may be appropriate in a recession as an autocratic leader will
make quick decisions.
• This approach is likely to cause problems, as it leaves workers feeling
demotivated and unimportant.
• A problem with autocratic leaders is that they become bottlenecks because
people learn that the best survival skill is to ask the manager first before making
a decision. People learn to wait for instructions or become terrified about
making the wrong decision. Creativity is discouraged, and the most talented
people eventually leave.

Democratic:
• This approach may be more effective at motivating workers, as they will
feel valued by the organisation. Motivational theorists, such as Maslow and
Herzberg, identify responsibility as a factor that will motivate.
• Where workers are highly trained, motivated and ambitious, a democratic style
of management may be beneficial.
• In a recession a democratic leader may be better as they will help create a more
positive environment.
• Democratic leaders typically need excellent communication skills and the
ability to generate two-way communication.

Laissez-faire:
• This approach may be beneficial where jobs are easily learned and, therefore,
workers can be left to get on with it.
• It may also be appropriate where workers are highly skilled or have technical
expertise, e.g. in research and development.
• If workers are essentially lazy, then it will not be successful as workers will avoid
work if allowed to.

Evaluation may consider:

• The most appropriate style of management depends on a wide range of factors,
such as the abilities of the manager and employees, the nature of the task and the
circumstances of the firm. For example, faced with a complex problem a manager
may well wish to discuss any action with workers if they are well trained and
motivated. A manager with a simple decision to make may feel that discussion is a
waste of valuable time.

Chapter 8 © Cambridge University Press 2010 7

• A manager’s leadership style should, therefore, change according to the specific
circumstances and the people involved.

Top tip
Although four styles of leadership are identified
in the Coursebook, in practice there is a spectrum
of styles from autocratic to laissez-faire. Applied
answers recognise that an individual leader often
displays a range of styles in the way they manage.

Further reading
McGregor, D., The Human Side of Enterprise, Penguin.

Drucker, P., The Practice of Management, Butterworth–Heinemann.

Enterprise Rent-A-Car, ‘Using a range of management styles to lead a business’,

http://www.thetimes100.co.uk/

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