Leadership and Management

Leadership is the art of influencing people to do as you wish, willingly and

enthusiastically. This is an important area of study and in this section we start to
look in more detail at the theory relating to leadership styles and management
approaches.

Leadership styles
There are several styles of leadership that you need to know for business and
management. These are:

Autocratic or authoritarian styles

The first of these styles is known as the dictatorial (or autocratic) style - this
places a lot of emphasis on formal systems, which are backed-up with a strict
code of conduct or control. The reward system is mostly financial and closely
related to performance and meeting targets. In reverse a poor performance can
result in penalties, as can poor behaviour. Some are based on a strong
personality cult, which is that of the leader, or in many cases the founder of the
business. This system is often referred to as being close to McGregor's Theory X
(see the section on motivation theory).

Another style within this school is paternalistic, which sees the workforce as an
extension of the family and close supervision forms much of the attempt to gain
both respect and acceptance. Those who accept the style are rewarded, whilst
those who do not are at best tolerated.

Democratic styles

The first of these is known as the consultative and is similar to McGregor's

Theory Y (more later). Employees are asked for their opinions on issues before a
final decision is made. Sometimes this results in their ideas being adopted, or
they are persuaded to accept what management wanted. The second of this
school is known as laissez-faire and allows employees to largely run their own
affairs. They consult one another and do what is thought best to achieve their
objectives. This type of leadership is really not leadership at all as there is a
complete delegation of responsibility. In general, this approach leaves the team
floundering with little direction or motivation. There are situations where the
Laissez-Faire approach can be effective. The laissez-faire approach is usually
only appropriate when leading a team of highly motivated and skilled people, who
have produced excellent work in the past.
Factors that affect leadership styles
 The leader's personality - for many this is set and unlikely to radically
alter. So, a dominant individual will tend to be more autocratic than
someone who listens carefully to others. If the business wants to change
direction, then it will probably have to look for a new leader.
 The leader's skills and abilities - much of what a leader can achieve will
rest on their ability to illustrate sufficient skill and charisma. Respect and
loyalty normally have to be earned and as we have seen in the styles of
leadership section different individuals go about achieving these in
different ways.
 Circumstances - some rise during a crisis, whilst others are better in less
chaotic circumstances.
 Culture - the ways in which a business is run can also affect what style of
leader it works best under. Some prefer a more open, consultative way of
doings things, whilst other use a more autocratic way of running affairs.
 Task - the nature of the task, such a highly technical one, might also
determine who leads and how.
 The workforce - if it is prone to laziness or poor standards then a more
dictatorial style of leadership will be needed.
Leadership and management styles - exam tips

Always try to think about examples of each and be prepared to discuss

WHY you would favour one style as against another. Also, be prepared to accept
that just one style may not suit a company and that a mixture might be the best
decision.

Think WHAT it is that affects the style of leadership adopted by a firm. It might be
influenced by:

 The corporate culture of the business

 The type of task being undertaken
 What skills are available to you and also the type of labour that needs to
be led
 The skills and personality of the appointed leader
 The management structure and the span of control
 What is needed to be done and what others would like to be done - they
are often NOT the same.

Always look at the TASK being undertaken, remember leaders are not there to
be popular. Study the case material to understand the PERSONALITY of the
leader and see how long they have been with the firm. Always be aware of the
owner-founder, or newly arrived university graduate - they tend to have styles
that might not be greatly admired by some members of the workforce.

Exam skills

There is advice on revision and the skills that examiners are looking for in the
revision tips section of the course (under study support). Also in that section is
some advice on the command words that examiners use in questions and what
they all mean.

When ANALYSING you will be asked to apply a certain style to a particular

situation. Look out for a clash of personalities or company cultures (say after a
takeover or merger). Look at the NATURE of the market in which the business
operates. Creative people seldom like authoritative leadership, whilst a more
repetitive task might require more stick than carrot.

When EVALUATING remember what we said earlier and note that most styles
are both original and somewhat organic. They seldom fit one classification
precisely, some alterations have been made - so you need to say WHY. Also,
look for CONSTRAINTS, both internal and external. Examiners often make
things more complicated. Again you will need to say WHY and WHAT you would
do about it. Again look at TASKS, PERSONALITIES and the changes that take
place over TIME.

As we have said before always be aware of opportunities to LINK. Seldom is

leadership mentioned without motivation, communication and human resource
management being in there somewhere as well.