2.3 Leadership and management

2.3 Leadership and management

Starter Activity - Leadership vs. Management

Many IB World Schools provide student leadership opportunities, including roles such as Prefects, Monitors and representation of the School Council (terminology may vary depending in your own schools). Schools also typically operate with different organizational structures, such as a Senior Leadership Team (SLT) and a group of Middle Managers (such as Subject Coordinators and Heads of Year).

Students can reflect on the above to add some context to the following tasks.

This is a good starter activity to get students thinking about the difference between leadership and management.

  1. What does a leader do?
  2. What does a manager do?
  3. What are the characteristics (traits) of an effective leader?
  4. What are the characteristics (traits) of an effective manager?
  5. Which characteristics (traits) apply to both leaders and managers?

Write your answers down on sticky notes. Use one sticky note for each question and be prepared to share your responses with the class

Once students have had their group discussions, ask them to compile their main findings on the sticky notes (or on large A2 poster paper), which they can stick on a wall to make their thoughts visible to the entire class. As students to do a gallery walk before summarising the main answers / themes from the class as a whole.

InThinking Business Management resources

Click the hyperlinks below to access the InThinking resources for this particular section of the IB Business Management syllabus.

Introductory reading - What is Management?

Definition of management

Mary Parker Follett (1868 – 1933), a famous American author, defined management as “the art of getting things done through people”. In other words, it is the process of achieving organizational objectives by using the limited resources that an organization has. Hence, managers are, perhaps, the people with the most influence in the degree of success of a business organization.

In general, management can be categorised into three levels:

  • Senior management are the highest-ranking managers who set and oversee the long-term plans and strategies of the organization. They are ultimately held responsible for the results of the business.
  • Middle management are managers who establish departmental goals and strategies and are responsible for the staff within their respective divisions.
  • Supervisory management (or junior management) are the lower-ranking managers who monitor the regular and routine day-to-day tasks of the organization.

Functions of management

Henri Fayol (1841-1925), a French management theorist, suggested that a manager has five key roles to carry out in order to achieve the goals of an organization. These functions are:

  • Planning – Managers must set targets that are SMART (specific, measurable, agreed, realistic and time constrained). Short term plans (known as tactical plans) are set by junior management, whereas long term plans (known as strategic plans) are set by the senior management team.
  • Organizing – Planning without any action is unproductive and therefore managers devise plans to meet the organization’s goals. These plans can relate to the short, medium or long term objectives of the organization. Mangers also organize the various factors of production (land, labour and capital resources) in the production process.
  • Commanding – Managers have the authority to give instructions to their subordinates to carry out various tasks. They have the ability and authority to make decisions but are also held responsible for the outcome of the tasks and projects they lead.
  • Coordinating – Managers ensure that all employees have a common approach to achieving the different goals in the different sections of the organization. Hence, effective coordination helps to bring all the various objectives together in order to achieve the main aims of the organization.
  • Controlling – Managers are in charge of ensuring that the performance of individual employees meets the standards and requirements of the organization.  This helps to ensure the smooth operation of different business activities. For example, budgetary control requires managers to monitor and control the finances that they are responsible for.

What is leadership?

"One of the criticisms I've faced over the years is that I'm not aggressive enough or assertive enough, or maybe somehow, because I'm empathetic, I'm weak. I totally rebel against that. I refuse to believe that you cannot be both compassionate and strong." - Jacinda Ardern (b.1980), 40th Prime Minister of New Zealand and the world's youngest female head of government at age 37.

Leadership is about influencing other people to achieve a vision or goal. This means that effective leaders are crucial if employees are to be inspired and motivated to achieve organisational aims and objectives. An official leader (or formal leader) is established by an organisation and therefore has the authority to give orders. An informal leader is not in an official role but has natural flair and charisma in influencing other people. Hence all leaders have the ‘power’ to influence, although the source of power is different for official and unofficial leaders.

Styles of Leadership and Management

There is generally considered to be five main styles of management:

a)  Autocratic (authoritarian)

This is a strict and rigid management style that involves only managers making all the decisions in an organization. Autocratic managers do not like to delegate responsibility to their subordinates, preferring to tell employees what to do. This style is suitable in situations that require decisive actions (e.g. the Army), when critical decisions need to be made (e.g. a hostile takeover), during a crisis (e.g. bankruptcy) or when dealing with an unskilled pool of workers. However, an authoritarian management style can demotivate and alienate the workforce.

Theory of Knowledge

Is it possible for employees to thrive under autocratic leadership? Do autocrats necessarily suppress creativity?

b)  Paternalistic

Paternalistic managers act rather like parents - they take actions that they believe are in the best interest of the subordinate (and the parents are usually correct!) Such managers can be somewhat autocratic in that they do not necessarily consult the subordinate, but paternalistic managers tend to have a good bond and professional relationship with their teams because they come across as being caring, affectionate and protective of their staff.

Theory of Knowledge

Are paternalistic leaders more ethical than those who adopt an autocratic, democratic or laissez-faire style?

c)  Democratic

Democratic managers are those who prefer to discuss and involve employees in decision making. Such managers prefer to consult staff before making any firm decisions. This management style can improve staff morale and motivation because the workers feel they have some input in the decision-making process. However, the process of consulting and listening to staff can be very time consuming and it is not always necessary or appropriate to involve staff in every decision made by the organization.

d)  Laissez-faire

Laissez-faire is a Latin phrase meaning ‘to leave alone’. Laissez-faire managers are those who prefer to have minimal involvement in the day-to-day work of their employees. Workers are therefore given responsibility to complete tasks in their own way. This management style can boost staff motivation because employees feel valued. However, due to the lack of senior management command and control, some workers might become complacent and become less proactive.

e)  Situational

Fred Fiedler (1922-), an American business and management psychologist, argued that different situations require different management styles, i.e. there is no “one size fits all” model of management that is effective. Instead, Fiedler argued that the most preferred style depends on the situation and various factors. For example, effective managers who may prefer to adopt a democratic style will become autocratic during a time of crisis. A key advantage is that managers change the style to match different circumstances. However, frequent changes in management style can cause some confusion for employees, with the perception of the manager being unpredictable.

Factors influencing management style

A common student blunder is that autocratic managers are seen to be “bad” and that laissez-faire and democratic managers are “good”. Take for example the following statement from a real exam script: “Autocratic managers do not get the best out of their workers whereas democratic managers are best at managing their staff”. There is a common misconception that “nice” managers are best at their jobs. Recall the functions of managers: to plan, organise, coordinate, control and command. It is true then to say that laissez-faire managers are best at managing their staff during a time of crisis? Or when the staff are lazy and/or unskilled? Not all workers like autonomy and many may prefer to have clear instructions and directions from their managers.

There are several important factors that determine what is considered to be the ‘best’ management style in different situations. It is unrealistic to assume that one style works best for all managers, all employees in all situations.

Factors that affect the management style that is adopted at any particular point in time include:

  • The task(s) being performed – Successful managers are able to use a laissez-faire approach when employees are faced with simple, routine tasks that carry no or very little risk. By contrast, major projects that affect the whole organization (such as a takeover or relocation) will require a more authoritarian and hands-on approach.
  • The subordinates – Effective managers will adjust their style based on the number of staff they are dealing with and the temperament of their staff. The skills and experiences of the employees will also be a key factor.
  • Organizational culture – Management teams that promote innovative thinking and collaborative teamworking, such as Google, will adopt a different management style from organizations that are more systematic and carry out monotonous tasks, such as sports shoes manufacturers in Vietnam.
  • The managers themselves – People adopt different management styles based on their individual preference. The preferred style is likely to be affected by factors such as: experience, emotions, habits, values, attitudes and personal motivation.
  • Time constraints – Highly urgent projects that have a tight deadline may well require a different management style to small-scale projects that are less imminent.

Theory of Knowledge

What is more important in management decision-making: reasoning, intuition, ethics or emotion?

Summary

The research conducted by Fred Fiedler suggests that the most appropriate management style depends on three key factors: the task, how much power the manager has, and his/her relationship with the employees. Fiedler argues that the most successful managers are those who can adapt their style to suit different situations in order to get things done through people, even though they may have a preferred style.

Theory of Knowledge

To what extent should equity (fairness) inform business decision-making?

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