Pearson BTEC Level 5 Higher National Diploma in Business

Unit 4: Management and

Operations
LEARNING OUTCOME 2

LO2 Review the influence of different leadership

and management styles on the culture of
organisations
Recommended Resources
Textbooks
❖KELLY, P. and COLE, G. (2020) Management: Theory and
Practice. 9th Ed. Cengage. (Chapter 7)
❖MULLINS, L. J. (2019) Organisational Behaviour in the
Workplace 12th Ed. Harlow: Pearson. (Chapter 15)
❖NORTHOUSE P. (2018) Leadership: Theory and Practice. 8th
Ed. London: SAGE.
❖ ROBBINS S. P., JUDGE T. A. (2013) Organizational
Behavior, 15th ed Prentice Hall, ISBN-13: 978-0-13-283487-
2
 Topic 2.1
Leadership styles
Styles of leadership

Leadership style is the way leader exercises his/her

authority

Leadership style can

affect motivation,
efficiency and
effectiveness of
leader’s followers

Nguyen Van Thuy Anh, NEU

Styles of Leadership
 Nguyen Van Thuy Anh, NEU
2 extremes of leadership styles

high leader high subordinate

control discretion

Wholly task-focused, Wholly people-focused,

directive leadership supportive/relational
behaviors leadership behaviors
Tannenbaum and Schmidt’s continuum of
leadership styles (1)
❖ Continuum leadership theory developed in 1959 and
updated in 1973
❖ Chosen leadership style depends on a variety of factors,
including leader’s personality, perceived qualities of
subordinates
❖ Continuum represents range of action related to degree of
authority used by leader or manager and area of freedom
available to non-managers
❖ Area of freedom shared between managers and non-
managers is redefined constantly by interactions between
them and environmental forces
Tannenbaum and Schmidt’s continuum of
leadership styles (2)
Continuum of leadership styles (3)
Tannenbaum &Schmidt’s continuum suggests
❖No one style is right or wrong
❖Appropriate style depends on:
▪ Leader: personality, values, natural style, etc
▪ Subordinates: knowledge, experience,
attitudes, etc
▪ Situation: organizational culture, time
pressure, levels of authority & responsibilities,
etc
Ashridge Management College

❖Tells- autocratic dictator, manager makes all

decisions, issues instructions, which must be obeyed
without questions
❖Sells- persuader, manager still makes decisions,
persuade subordinates to accept them to carry them
out
❖Consults- partial involvement, manager discusses
with subordinates & takes their views into account
❖Joins- democrat, decisions made on the basis of
consensus
 Leadership Styles Ashridge management college
Style “Tells” (Autocratic)
Characteristics A leader/manager centralizes authority, makes all decisions,
and limits employee participation
Strengths • Quick decisions
• Efficient type for routine work
Weaknesses • One-way comunication, lack of feedback
• discourage contribution or initiative from subordinates
“Sells” (Persuasive)
Characteristics The manager makes all decisions, but explains them to
subordinates, and attempts to motivate subordinates to carry
them out willingly

Strengths • Make subordinates more willing

• Staff have a better idea of what to do
Weaknesses • Staff will not necessarily be committed to decisions in which
Nguyen Van Thuy Anh, NEU
they have not been involved
Leadership Styles Ashridge management college
Style “Consults” (Participative)
Characteristics The manager confers with subordinates and takes their views and
feelings into account, but retains the right to make the final decision
Strengths • encourage motivation through greater interest and involvement
• mobilize knowledge and experience in problem solving
Weaknesses • take longer to reach decision
• limited viewpoint on organizational issues
• meaningless of process if the manager does not take employees’ advice

“Joins” (Democratic)
Characteristics Leaders and followers make the decision together, on the basis of
concensus
Strengths • provide high commitment to the decision reached
• take advantage of the knowledge and expertise of individuals
Weaknesses • the authority of the manager might be undermind
• long process of decision making
• Clear-cut decisions might be difficult to reach
 Nguyen Van Thuy Anh, NEU

Leadership Styles Ashridge management college

Conclusions:
❖ In an ideal world, ‘consults’ styles is preferable
❖ Consults style leads to the most favorable attitude to work
❖ Subordinates feel being led by ‘tells’ or ‘sells’ managers
❖ Consistency is far more important to subordinates than any
particular style
 Nguyen Van Thuy Anh, NEU
Rensis Likert

4 management systems:
❖ System 1: Exploitative authority
❖ System 2: Benevolent authoritative
❖ System 3: Participative
❖ System 4: Democratic
 Nguyen Van Thuy Anh, NEU
Rensis Likert
System 1: Exploitative authority.
❖ Leader has no trust in subordinates,
❖ impose decision,
❖ never delegate,
❖ motivates by threat,
❖ has little communication with subordinates
❖ not encourage team work

System 2: Benevolent authoritative

❖ Leader has only superficial trust in subordinates
❖ Imposes decisions
❖ Never delegates
❖ Motivates by rewards
❖ Sometimes involves others in problem solving
 Nguyen Van Thuy Anh, NEU
Rensis Likert

System 3: Participative
❖ Leader has some confidence in subordinates
❖ Listen to them but controls decision making
❖ Motivates by rewards and level of involvement
❖ Uses ideas and suggestions of subordinates constructively

System 4: Democratic
❖ Leader has complete confidence in subordinates
❖ Allows them to make decisions for themselves
❖ Motivates by rewarding for achieving goals
❖ Sharing ideas, opinions and cooperation
 Nguyen Van Thuy Anh, NEU
Rensis Likert

Each style is relevant in some situation:

❖ System 1: Exploitative authority => e.g. in a crisis
❖ System 2: Benevolent authoritative & System 3: Participative
=> effective
❖ System 4: Democratic => e.g. introduce a new system of work
 Leadership theory and skills - Individual
research task

❖Identify and list skills required to be a good leader,

then discuss
❖Make examples of good leaders as you know
 Leadership theory and skills
Learning exercise

Think of 2 of the most effective leaders you have had direct

contact with and who have had an influence in your life. These
leaders could be anyone: parent, teacher, coach, boss, student
leader, religious leader, or a relative or a friend.
❖ List at least 6 characteristics and/or beliefs that made these
people such outstanding leaders.
❖ Next, on a scale of 1 (poor) to 5 (excellent), rank how well you
measure up against these characteristics and beliefs.
❖ Do you think you could develop more of these characteristics
(score better) if you made a concerted effort?
❖ What does this imply about the traitist theory of leadership?
Leadership and management review

❖ Different types of leadership

❖ Adapting leadership styles to apply in different business
situations and the required hard and soft skills
❖ Impacts of leadership and management styles on decision
making in a business organisation
 Topic 2.2
Organizational culture
Content

❖ Defining culture
❖ Aspect of culture
❖ Types of culture
● Four types, Power, Role, Task, Person (Handy)
● Tough-Guy Macho, work hard/play hard, bet-your-company,
Process (Deal and Kennedy)
❖ The importance and value of culture for work ethic,
organizational performance, health of the organisation
Culture and organizational culture

❖ Organisational culture, general concept with different

meanings and difficult to explain precisely
❖ Popular and simple way of defining culture is ‘how things are
done
❖ Organisational culture as reflecting underlying assumptions
about the way work performed
❖ Culture, root of problem and needs to be addressed for issues
to be resolved
❖ Culture of organisation often likened to personality of
individual
Culture and organizational culture
Types of organizational culture

Four main types of organisational cultures: power culture; role

culture; task culture; and person culture (Charles Handy)
❖ Power culture:
- Depends on central power source with influence throughout
organisation
- Power culture frequently found in small entrepreneurial
organisations and relies on trust, empathy and personal
communications
- Political organization with decisions taken largely on the
balance of influence.
❖ Role culture:
- Stereotyped as bureaucracy and works by logic and rationality
- Role culture rests on strength of strong organisational ‘pillars’
– functions of specialists in, e.g. finance, purchasing and
production
- Role or job description often more important than individual,
and position is the main source of power.
Types of organizational culture

❖ Task culture:
- Job-oriented or project-oriented
- Be likened to net, some strands
- Stronger than others and with much of power and influence,
bringing together right resources and people, and utilising
unifying power of the group
- Influence widely spread and based more on expert power than
on position or personal power.
❖ Person culture:
- Individual, central focus and structure existing to serve
individuals
- Resulting organization having person culture. E.g. barristers,
architects, doctors or consultants
- Individuals having a preference for person culture
- Management hierarchies and control mechanisms possible only
by mutual consent.
Four generic types of culture (1)

❖ Deal and Kennedy categorise corporate cultures according to

two determining factors in marketplace:
- The degree of risk associated with organisation’s activities;
- The speed at which organisations and employees receive
feedback on success of decisions or strategies.
❖ Factors giving rise to four generic types of culture:
- The tough-guy, Macho culture
- The work-hard/play-hard culture
- The bet-your-company culture
- The process culture
Four generic types of culture (2)

❖ Tough-guy, macho culture

- Organisation of individualists frequently taking high risks and
receiving quick feedback on right or wrong of actions
E.g. police departments, surgeons, construction, cosmetics,
management consulting and entertainment industry
- Financial stakes high and focus on speed.
❖ Work-hard/play-hard culture
- Characterised by fun and action, employees taking few risks,
all with quick feedback
- Organisations tend to be highly dynamic and primary value
centres on customers and needs
- High level of relatively low-risk activity
E.g. sales organisations such as estate agents and computer
companies, mass consumer companies such as McDonald’s,
office equipment manufacturers and retail stores.
Four generic types of culture (3)

❖ Bet-your-company culture
- Large-stake decisions with high risk but slow feedback so that
it may be years before employees know if decisions successful.
E.g. Oil companies, investment banks, architectural firms and
military.
- Focus on future and importance of investing
- Sense of deliberateness throughout organisation typified by
ritual of the business meeting.
❖ Process culture
- Low-risk, slow-feedback culture, employees finding difficulty in
measuring what they do
E.g. insurance companies, financial services and civil service.
- Individual financial stakes low and employees get very little
feedback on effectiveness.
- Memos and reports seem to disappear into void
- Lack of feedback forcing employees to focus on how they do
something, not what they do.
Discussion

❖ In what type of organisation culture are YOU more likely to be

happy and satisfied at work, and is most consistent with your
personality and attributes?
Levels of culture (1)

Schein suggests a view of organisational culture based on

distinguishing three levels of culture, from shallowest to deepest:
artefacts and creations; values; and basic assumptions.
❖ Level 1: Artefacts
- Most visible level of culture is artefacts and creations -
constructed physical and social environment.
- Physical space and layout, technological output, written and
spoken language and overt behaviour of group members
inluded.
❖ Level 2: Espoused beliefs and values
- Cultural learning reflecting someone’s original values
- Solutions about how to deal with new task, issue or problem
are based on convictions of reality
- If solution works, value transforming into belief
- Values and beliefs becoming part of conceptual process,
ggroup members justifying actions and behaviour.
Levels of culture (2)

❖ Level 3: Basic underlying assumptions

- When solution to problem works repeatedly it comes to be
taken for granted
- Basic assumptions unconsciously held learned responses
- Implicit assumptions actually guiding behaviour and
determining how group members perceive, think and feel
about things.
Levels of culture (3)
Influences on development of culture (1)

Identifying number of key influences likely to play important role

in development of any corporate culture,
Including history, primary function and technology, strategy,
size, location, management and leadership, and environment.
❖ History
- Reason and manner, organisation originally formed, age and
philosophy and values of owners and first senior managers
affecting culture
- Corporate history, effective induction tool to assist growth
programme, helping integrate new employees by infusion with
organisation’s culture and identity
- Failure in mergers and acquisitions arising from cultural
clashes and failure to integrate different cultures.
Influences on development of culture (2)

❖ Primary function and technology

- Nature of organisation’s ‘business’ and its primary function
having important influence on culture
- Range and quality of products and services provided,
importance of reputation and type of customers
- Primary function of organization determining nature of
technological processes and methods of undertaking work, in
turn also affecting structure and culture.
❖ Strategy
- Business organisation pursuing profitability, not by itself, very
clear or sufficient criterion for effective management
- Organisation giving attention to objectives in all key areas of
operations. E.g. emphasis placed on long-term survival or
growth, avoiding risks and uncertainties
- Combination of objectives and resultant strategies influencing
culture, and be influenced by changes in culture.
Influences on development of culture (3)

❖ Size
- Usually larger organisations having more formalised structures
and cultures
- Increased size likely to result in separate departments and
possibly split-site operations
- Causing difficulties in communication and inter-departmental
rivalries with need for effective co-ordination
- Rapid expansion, or decline, in size and rate of growth, and
resultant changes in staffing, influencing structure and culture.
❖ Location
- Geographical location and physical characteristics having major
influence on culture
- E.g. organization located in quiet rural location or busy city
centre influencing types of customers and staff employed
- E.g. a hotel or restaurant. Location can also affect nature of
services provided, sense of ‘boundary’ and distinctive identity,
and opportunities for development.
Influences on development of culture (4)
❖ Management and leadership
- Top executives having considerable influence on nature of
corporate culture
E.g. key roles played by Sir Richard Branson, Anita Roddick,
founder of The Body Shop
E.g. Louis Gerstner, remaking ossified culture of computing giant
IBM bred by company’s success, rebuilding leadership team and
giving workforce renewed sense of purpose
E.g. Harriet Green, between 2012 and 2014 completely
transforming financial fortunes of travel operator Thomas Cook
❖ The environment
- Organisation responsive to external environmental influences
- Organisation operating within dynamic environment, requiring
structure and culture sensitive and readily adaptable to change
- Organic structure more likely to respond effectively to new
opportunities and challenges, and risks and limitations
presented by external environment
Discussion

❖ What examples can YOU provide of people who have exercised

considerable influence over corporate culture? What about the
vice-chancellor of your university?
The cultural web (1)

To help describe and understand the culture of an organisation,

Johnson et. al. present a cultural web, which brings together
different aspects for the analysis of organisational culture
The cultural web (2)

❖ Routine behaviours
- Members of organisation behaving towards each other and
towards those outside organisation
- Making up how things done or how things happening.
❖ Rituals
- Particular activities or special events, organization emphasising
what is particularly important
- Formal organizational processes and informal processes
inluded.
❖ Stories
- Embed present and flag up important events and personalities
- Typically having to do with successes, failures, heroes, villains
and mavericks.
The cultural web (3)

❖ Symbols
- Logos, offices, cars, titles, type of language or terminology
commonly used
- Becoming shorthand representation of nature of organisation.
❖ Power structures
- Power of most powerful individuals or groups in organization
based on management position and seniority
- Power lodged with other levels or functions.
❖ Control systems
- Measurement and reward systems emphasizing what it is
important to monitor
- Focus attention and activity upon - E.g. stewardship of funds
or quality of service.
The cultural web (4)

❖ Organisation structure
- Reflecting power structures and delineates important
relationships and activities within organisation,
- Involving both formal structure and control and less formal
systems.
❖ The paradigm of the organisation,
- Encapsulating and reinforcing behaviours observed in other
elements of cultural web.
Culture and organisation control

❖ Culture, system of management authority.

❖ Cultural values increasing power and authority of management
in three ways:
- Identify themselves with organisation and accept rules
- Internalise organisation’s values
- Be motivated to achieve organisation’s objectives.
❖ Culture, largest organisational control system dictating how
crazy or idiosyncratic people can be
❖ Companies and institutions having both overt and covert
culture, influencing both business and organisational behaviour
Two different forms of culture (1)

Distinguishing two different organisation cultures and different

ways of doing things:
❖ Control culture with emphasis on rules and procedures, control
and compliance with precedent providing guidelines
❖ Quality of working life culture with emphasis on core values,
with mission statements providing guidance and commitment
via shared goals, values and traditions.
Two different forms of culture (2)

Kershaw contrasts rules-based or values-based culture:

❖ In rules-based cultures,
- People following rules and procedures assuming in place for
good reasons
- As result of regulatory nature of work undertaken, or particular
management style.
❖ In value-driven organisations,
- Expected code of conduct
- Understanding values of organisation and know how to behave
and perform
- Diverse organisations requiring mix of ‘command and control’
and ‘culture and values’ to be successful
Importance of culture

❖ Applications of organisational behaviour and effective

management of people dependent not only upon nature of
industry or business, but also upon characteristic features of
individual organisation – and its culture.
❖ Pervasive nature of culture and common values, beliefs and
attitudes, having significant effect on organisational processes
such as decision-making, design of structure, group behaviour,
work organisation, motivation and job satisfaction, and
management control
❖ Culture referred as important factor in successful technology
implementation, innovation, mergers, acquisitions, job
satisfaction, organizational success and team effectiveness,
and to importance of determining whether organisations
exhibit organic or mechanistic cultures
Culture and work ethic

❖ Culture influencing people’s attitudes and behaviour at work

❖ Bunting maintained through work, seeking to satisfy craving
for sense of control, mastery and security
❖ Exploiting cultural context by designing corporate cultures,
meeting emotional needs of employees
❖ Competitive environment and concerns about job security,
contributing to prevailing work culture of ‘presenteeism’
❖ National cultural environment having noticeable effect on
presenteeism
Discussion

❖ How has YOUR work ethic been influenced by the cultural

environment of your university? To what extent is there an
expectation of presenteeism for staff and for students?
Culture and organizational performance (1)

❖ Culture, clearly important ingredient of effective organisational

performance
❖ Having difficulty in explaining why, intuitively culture matters
❖ Culture, intangible asset, distinctive to organization, adding
value (or diminishing value)
❖ Ten typical characteristics forming typical organisation culture
are:

a story or stories a relationship network

a purpose a digital presence

set of values a digital presence

an attitude to people a customer proposition, and

a global mindset horizon scanning ability.
Culture and organizational performance (2)

❖ Links between culture and business success difficult to prove

❖ Business cannot be successful if business model flawed
❖ Strong and healthy culture, less likelihood of flawed business
model found
❖ Key to understanding any business - to understand its culture,
yet often most neglected and taken for granted part
❖ Strong link and companies, both succeed and decline because
of culture
❖ Most management systems such as risk management
neglecting importance of culture and treating business as
mechanical operation when outcomes depending
fundamentally on way people behave and interact.
<=> The biggest reason for the failure of two thirds of mergers
and acquisitions would probably be the incompatibility in culture
of the businesses
Culture and organizational performance (3)

❖ Organisation’s culture determining whole range of performance

indicators
❖ Business leaders re-evaluating importance of culture when
embarking on any change management programme, focused
on performance improvement
❖ Embracing touching interaction or decision in organization,
difficult to know how to get grip on culture
❖ Power of culture illustrated by expression ‘That’s just how we
did things’ as familiar sentiment in wake of an organisational
scandal
National and international culture

❖ Cultural beliefs and values influencing meaning of

management and showing up differences in conceptions of
organisations
❖ National differences and cultural reasons raising concerns
about transferability of organisational structures, systems and
processes and question logic of universal ‘best practice’
❖ Culture recently accepted as explanation of organisational
behaviour. One reason, increase in competitiveness of nations
and second reason, managers encounter different cultures in
contacts with people from other nations
❖ However, limits to use of culture to explain organisational
behaviour, and relationship between national cultural values
and actual behaviour in organisations complex
❖ Culture of doing business in particular country giving upper
hand.
❖ Cultural differences in doing business abroad representing one
of biggest barriers to efficient working
Discussion

❖ What examples of different cultural behaviours or etiquettes

have YOU observed?
❖ Have these differences resulted in misunderstandings or
conflict situations?
A generic model of cultural categorisation
With wide range of national cultures and regional variations, and
world of rapidly globalising business. Cultures classified under three
main headings: linear-actives; multi-actives; and reactives:
A generic model of cultural categorisation

❖ Linear-active
- Tend to be task-oriented, highly organised planners, completing
action chains doing one thing at a time
- Prefer straightforward and direct discussion, adhere to logic rather
than emotion, having faith in rules and regulations, honour written
contracts and process oriented.
❖ Multi-active
- Emotional, loquacious and impulsive and attaching great
importance to family, feelings and relationships
- Relationships and connections more important than products
- Limited respect for authority, often procrastinate, flexible and
often change plans.
A generic model of cultural categorisation

❖ Reactive
- As listeners, rarely initiating action or discussion
- Concentrating on what is being said, listen before leaping and
showing respect
- Introverts and adepting at non-verbal communications
- Silence regarded as meaningful part of discourse
- Smalltalk not easy, lack of eye contact typical.