Leadership and Management
The terms leadership and management are often used interchangeably because the tasks tend to overlap: leaders also manage, and managers also lead. Nevertheless, leading and managing are two different activities, and most people are more suited to one than to the other. Simply stated, leaders tend to be people oriented, whereas managers are more likely to be task oriented. In most companies, manager is a title, and managers may be found on many levels of the organizational chart. On the other hand, the term leader is most often applied in the context of small or temporary groups, as in team leader or project leader.
In business language, terms related to leading and managing are often imprecise and even confusing. The term management, for example, might be used to describe individuals who set company policy or provide direction at a top level. In many cases, however, such tasks fall to officers or directors of a company rather than to managers, who are typically tasked with overseeing the completion of a certain set of tasks or objectives. Similarly, although the term leadership describes the ability to empower and guide a team to be productive, efficient, and effective, it is often used in a more general sense, such as when “ability to provide leadership” is included in a list of job qualifications
Generally speaking, management is a practical or technical skill that anyone can learn, either in an educational setting or through practical, hands-on experience. In contrast, the qualities that make a good leader tend to be innate. Such characteristics can be encouraged but cannot typically be learned. In addition, although management techniques can be described in clear terms, it is more difficult to define the qualities of a leader, which may vary widely depending on personalities and situations. There is little question that businesses need people in both management and leadership roles. However, some commentators question the usefulness of treating leadership and management as subject areas in business education. Some also wonder whether it is worthwhile to maintain a substantive distinction between the two activities.
Historical BackgroundThe Early History of Leadership
Throughout history individuals have been recognized for their ability to inspire and direct others. In the 4th century BCE, the Greek philosopher Plato (428/427–348/347 BCE) wrote about leadership in The Republic (c. 380 BCE), a dialogue about justice, as framed around a model of an ideal city. The great Hindu epic Mahabharata, which appeared around 400 CE, also included commentaries on the nature of leadership, as did the Analects by Chinese philosopher Confucius (551–479 BCE).
In the early Middle Ages, a form of literature generally referred to as “mirrors for princes” developed. These works, which remained popular across many cultures well into the Renaissance, were typically cautionary tales about good and bad (or successful and unsuccessful) rulers. Some also included broader accounts of historical events along with advice on leadership. Early examples include portions of Historia ecclesiastica ( Ecclesiastical history) by Saint Bede the Venerable (672/673–735) in the 8th century, Nasihat al-muluk (Counseling kings) by 11th-century Persian philosopher al-Ghazali (1058–1111), and De regno (On kingship) by 13th-century theologian Thomas Aquinas (1225–74). The genre culminated in the early 16th century with Il principe (The Prince) by Nicolo Machiavelli (1469–1527), a manual not just for rulers but for anyone seeking to take or hold power.
Early examinations of leadership were concerned with individual leaders. In the dynastic, hierarchical societies that prevailed almost universally until the 18th century, there were two types of leaders: those born to their rank and those who seized opportunity. In both categories, leadership was most often proved or expanded in military engagements or in political maneuvering. The idea of Page 168 | Top of Articleleadership in business would not take shape until society had been dramatically changed by the American, French, and Industrial Revolutions of the 18th and 19th centuries.
Many early discussions of leadership are equally applicable to management, and the same texts are often mentioned in historical views of both topics. Until early modern times, only those with power had anything to manage, whether it was armies, land, money, or servants, so leadership and management were closely intertwined activities. As governments and institutions grew, however, executing a leader's policies consistently and comprehensively became an increasing challenge. In Imperial China, a vast, hierarchical organization of civil servants kept the government functioning by translating the emperor's policies down to the smallest details of daily life. In the Western world, a kind of managerial class began to arise during the Middle Ages in the form of stewards, overseers, and the like. These people kept things running smoothly, whereas people of rank made high-level decisions. The use of the English terms to manage and management in a business context can be traced to the end of the 16th century. The words, which derived from the Latin word for hand, arrived in England by way of French and Italian terms related to horsemanship. Hand may have been applied to those who acted in a “hands-on” fashion, converting orders from above into operational decisions.
In the second half of the 18th century, the Industrial Revolution gave rise to technological innovations that drastically changed the way goods were produced. This period and the century that followed led to a completely new model for business activity in the United Kingdom and continental Europe. Under this new system a large group of workers gathered in one place to use relatively complicated machines and work at a fast pace. This was very different from the previous model, in which most businesses employed only a few workers, and business owners were very involved in day-to-day operations. Prior to the Industrial Revolution, larger enterprises, such as those necessary for obtaining and exploiting colonial territories, had been carried out by governments rather than by independent businesses. In addition, the majority of workers had traditionally been engaged in agricultural and service activities controlled directly by landowners and their agents. That changed during the Industrial Revolution, when laborers began to leave the countryside for jobs in urban factories. Because most of these workers were unskilled and uneducated, regulations were put in place to manage the workers and maximize their productivity. This process was carried out mostly by trial and error, with no particular theoretical foundation, thus leaving much room for improvement.
At the end of the 19th century, American engineer Frederick Winslow Taylor (1856–1915) developed an approach to improve production efficiency. Officially called scientific management, his system was commonly (and sometimes derisively) known as Taylorism. It established the idea of managing as a specific type of activity that should involve a series of steps. These included analyzing the work to be done (for example, through time and motion studies), planning how the work could best be carried out, and training the workers to accomplish their tasks efficiently. Taylor also advocated the standardization of equipment, working conditions, and command structures throughout an entire factory.
Although the concept of systematic management of work and workers now seems obvious, it represented a radical departure from traditional factory operations of the time, which had generally been conducted on a day-to-day basis by managers who acted tactically rather than strategically and independently rather than cohesively. Taylorism was widely implemented in the first quarter of the 20th century, but by the 1930s its capacity to generate change was exhausted. This was due in part to the fact that Taylor was interested primarily in management rather than in managers. He did not theorize about the qualities of a good manager or about interpersonal Page 169 | Top of Articledynamics. In addition, he focused on the factory floor and methods of production, with little reference to higher management or leadership.
A contemporary of Taylor's, Frenchman Henri Fayol (1841–1925), had also advanced a theory of management, which focused less on the efficiency of factory production and more on the practice of management in all business environments. Fayol, an engineer, identified five elements of management: planning, organizing, command, coordination, and control. He also articulated 14 principles, in which he discussed such topics as the division of work (specialization), the relationship between authority and responsibility, the need for unified command, the importance of job stability, equity in the workplace, encouragement of initiative, and the development of esprit de corps, or team spirit. Many of Fayol's principles became staples of management literature and were expanded upon by subsequent theorists.
The concept of leadership had not been ignored during the 19th century, but it was not yet discussed in a business context. Biographies of great men were popular among Victorian writers and readers, and many historians of the period subscribed to the “great man” theory, which focused on the ability of extraordinary individuals to shape events. Perhaps the most popular and influential example of this perspective was a collection of lectures by philosopher and essayist Thomas Carlyle (1795–1881), published in 1841 under the title On Heroes and Hero Worship and the Heroic in History. Although the great man theory was criticized for oversimplifying the forces of history, it became a foundation of the so-called “trait” theory of leadership. This approach, which assumes that some people are born with characteristics that predispose them to succeed in positions of leadership, centers on identifying the qualities of a good leader.
Although popular in the early 20th century, the trait approach was called into question by several researchers in the 1940s, when studies suggested that people who functioned well as leaders in one situation might not succeed in another. Over the next two decades the emphasis in leadership studies shifted toward “contingency” theories, which regarded leadership success as contingent on circumstances. This approach was pioneered in the 1950s by Fred Fiedler (1922–), whose model was organized around the need for a good fit between a leader's style and the context within which he was working. A number of other contingency-type theories emerged in the late 1960s, such as the Path-Goal theory of Robert House and the popular Situational Leadership theory of Paul Hersey (1931–2012) and Kenneth Blanchard (1939–).
In the late 1960s Henry Mintzberg (1939—) developed another important model, called the multi-role theory, which describes 10 different roles a manager might need to play, such as “spokesperson,” “disturbance-handler,” “resource-allocator,” and “leader.”
Mintzberg developed his approach by observing the activities of high-level managers. His findings contributed to a gathering recognition that leadership and management are overlapping functions. He also divided the 10 managerial roles into three categories: Interpersonal, Informational, and Decision, placing the leader role in the Interpersonal cluster, along with “figurehead” and “liaison.” Mintzberg's approach, which continues to be influential, encouraged the perception that leadership is primarily people oriented, whereas other management roles are primarily production oriented.
This distinction was also clearly demarcated in the Managerial Grid developed by Robert Blake (1918–2004) and Jane Mouton (1930–87) in 1964. Their grid uses “concern for production” as a horizontal axis and “concern for people” as a vertical axis. At the four corners of the grid are four managerial styles: “country club” (high people concern, low production concern), “team” (high people, high production), “produce or perish” (low people, high production), and “impoverished” (low people, low production). In the center of the grid Page 170 | Top of Articleis a style referred to as “middle-of-the-road.” Blake and Mouton revised and expanded their model in the 1980s and renamed it the Leadership Grid in the 1990s. This change reflects a steady shift of emphasis during the last quarter of the century from the importance of efficient management to the importance of visionary leadership.
The nature of business organization was rapidly changing from the old industrial model, which stressed economies of scale and standardization, to a new model in which such emergent factors as information technology and globalization demanded greater flexibility and quicker responses. In short, the relatively static role played by managers was becoming less important than the comparatively dynamic role of leaders. Because the two roles frequently overlap in practice, a trend developed toward more people-focused, leadership-oriented approaches to management. This interconnection has led to a focus on the art and science of motivation, and the ability to motivate people has become a leadership skill integral to the task of management. Another developing trend is the convergence of leadership “styles” with managerial “behavior.”
Impacts and IssuesFive Basic Leadership Styles
In 1939 the social psychologist Kurt Lewin (1890–1947) described three distinctive “styles” used by individual leaders: autocratic, democratic, and laissez-faire. Later theorists have identified two additional styles, paternalistic and situational. Together, these five leadership styles have come to represent the range of options available to leaders depending on the particular strengths and weaknesses of their teams.
Autocratic Autocratic leadership is the most authoritarian of the five styles. In this model, a single leader is responsible for making all decisions regarding work objectives and processes without input from other employees or team members. Autocratic leadership has the advantage of allowing organizations to make quick decisions and communicate expectations clearly, while offering managers a greater level of control over the day-to-day operations of the company. However, maintaining such strict control often requires the threat of punishment. This can result in a lower level of engagement among subordinates and a lack of independence and innovative thinking among employees who may otherwise thrive with greater autonomy.
Paternalistic A paternalistic leadership system differs from an autocratic system in that the leader seeks to foster a stronger relationship with subordinates by providing for their needs. In this way, the leader takes on a parental role with his or her employees or team members and expects their trust and obedience in return for protection, careful guidance, and material benefits. This leadership style can result in a highly organized workforce, and the emphasis on forming personal relationships with each employee can lead to a greater degree of engagement and motivation. However, it also has the potential to stifle creative thinking among team members, thus creating a culture of dependency that discourages immediate and decisive action. In certain situations, this may lead to inefficiencies.
Democratic In a democratic leadership all team members are encouraged to participate in the decision-making process. Sometimes known as participatory leadership, this typically involves frequent meetings in which employees are free to voice their opinions and offer solutions to company problems. Democratic leadership is highly effective in encouraging teamwork and cooperation, while also helping employees to understand the importance of their role within the overall organizational structure. One disadvantage of the democratic style, however, is that making group decisions can be more time consuming than having an individual leader make a decision without seeking input from other team members.
Laissez-faire Laissez-faire leadership is the least authoritative of the five styles. In this model, leaders delegate decisions to other members of the team who may be more intimately involved with the issues in question, thus allowing workers to determine their own processes and procedures. Although the laissez-faire approach can be very effective when leading a group of skilled, motivated workers who have a clear sense of company objectives and expectations, it can lead to disorganization and dysfunction if employees lack the knowledge or confidence to perform with little or no supervision.
Situational Situational leadership gives leaders the flexibility to choose a style based on the context or situation. For example, when dealing with an emergency among a disorganized or unskilled team, the leader may choose to apply an autocratic or paternalistic approach in order to take decisive action. When planning a long-term project among a team of highly skilled employees, the leader may choose to apply a democratic or laissez-faire style in order to inspire team members to take ownership of their roles. This flexibility enables leaders to adapt to the strengths and weaknesses of their various teams. However, it may result in confusion or charges of inconsistency if the leader is perceived to be unfairly lenient with certain team members and overly authoritarian with others.
Organizations are often described as being “well managed” or “badly managed” or as having “strong” or “weak” leadership. Such assessments are applied to almost every kind of organization large enough to require leadership and management, including not only businesses but also not-for-profit organizations, governments, and educational or religious institutions. A well-managed organization with a reputation for strong leadership is more likely to be successful and to be respected within its industry or sector. This is especially important for a publicly held corporation, because the confidence of stockholders and the value of stock may rest on the perceived effectiveness of management and leadership. Similarly, public trust and financial support of institutions such as universities and charities may be tied to the perceived trustworthiness of their leaders and the integrity of their managers. In government, elected officials are both praised and attacked based on management skills and leadership qualities.
Attempts to foster excellence in management and leadership can be difficult because no single approach is consistently effective. What works well with one individual may not work at all for another, so companywide training programs may fail as often as they succeed. Furthermore, different work settings may require leaders and managers to have different personal characteristics and to use different methods. This is especially relevant with respect to cultural differences, both in terms of corporate culture and in terms of the cultural backgrounds of managers and workers. The environment, or “culture,” of an organization may be formal or casual, fast paced or more relaxed. A leadership style that works well in one setting may not be successful in another, especially in circumstances where there are wide socioeconomic, racial, or ethnic divides between workers and their managers. Such emotionally charged situations can be very difficult to navigate successfully, regardless of management and leadership methods.
Although business schools offer coursework and degrees in management and in leadership studies, the content may vary considerably among institutions. Whether individuals have formal training or not, most skill building happens in the workplace, often through trial and error. The practical challenges that await aspiring leaders and managers may include ethical dilemmas such as the extent to which the good of the organization should take precedence over the welfare of the individual worker. Ethical concerns may also arise when managers are faced with questionable behavior from their peers or Page 172 | Top of Articlesuperiors. Furthermore, managers and leaders must accept a higher level of responsibility than workers with respect to the behavior of the organizations for which they work. These concerns can be especially problematic for those working in the public sector, as they have a duty not only to the organization itself but also to the citizens they are mandated to serve.
In the 1950s Peter F. Drucker (1909–2005), a respected academic and influential business consultant, wrote a series of business books that were not only widely read but also highly influential. His work inspired a tendency (not only in the United States but also around the world) toward what some have called management by bestseller. Drucker wrote extensively on management theory in general and on the idea of management by objectives, or MBO, specifically. In this approach, which stresses the importance of participative decision making, managers and employees work together in setting clear, achievable, and shared goals for success. Drucker is also noted for his interdisciplinary approach to business theory, which makes use of materials from the humanities as well as the social sciences.
Another serious and substantive business writer, Tom Peters (1942–), captured the attention of readers with In Search of Excellence (1982) and Liberation Management (1992). At a different point on the publishing spectrum were short, prescriptive books such as The One-Minute Manager (1982) by Kenneth Blanchard and Spencer Johnson (1940–) and Johnson's Who Moved My Cheese? (1998). Stephen Covey's (1932–2012) works on self-management, beginning with The Seven Habits of Highly Effective People (1989), were also popular among business readers, along with revivals of classic works such as The Art of War (1913) and The Prince (1532). The popularity of these works, and many others, reflected the increasing attention on management skills in the late 20th century.
In the early 21st century expansions of leadership theory include cross-cultural and international approaches, as well as attention to the specifics of nonprofit management. Furthermore, a discussion has developed concerning the practice of leadership as either transactional or transformational. The former type of leadership focuses on conventional measures of business success (such as profitability, productivity, and stability), whereas the latter is concerned with shaping and promoting change. This distinction, which was introduced by Bernard M. Bass in the 1970s, accounts in part for the general tendency to think of leadership, but not management, as future oriented. By the same token, it is significant that the transactional approach has also been referred to as managerial leadership, thus highlighting the contemporary view of management as task-oriented and leadership as people oriented.
Despite the variety of leadership and management styles developed in the 20th century, few can offer empirical evidence of special success. In particular, the complexity of the business landscape in the 21st century makes it increasingly difficult to draw sweeping conclusions about the nature of leadership and the most effective approach to management. Modern theories, then, must take into account the many variations in cultural values and communications that are increasingly relevant not only in international management but also in the leadership of highly diversified workforces.
Other important, and perhaps controversial, subjects related to leadership and management must also be considered, including how gender differences affect leadership style and the concept of hierarchical authority. Women are significantly underrepresented in upper management and are less likely than their male peers to be placed in leadership roles. A robust debate emerged in the 21st century concerning the effect of corporate policies on women's advancement. In the meantime, concepts of hierarchical authority are continually challenged. As the Internet eliminates differences in information access and facilitates business networking, virtual employment, and entrepreneurship, young workers are becoming increasingly unwilling to adhere to top-down organizational structures, thus requiring dramatic shifts in the leadership and management styles of most companies.
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