9.

2 Leadership and Management

 Leadership vs. Management
o Leadership is about doing the right thing, inspiring and influencing others.
o Management is about doing things right, using structured processes like planning,
organising, leading, and control.
 Key Differences

Feature Management Leadership

Origin of Role Appointed by organisation Accepted by people
Power Source Position in the organisation Personal influence, charisma
Reason for Compliance Fear of authority (extrinsic) Respect and trust (intrinsic)

 Importance of Both
o Managers often need to be leaders to be successful.
o Organisations need both to achieve goals and stay competitive.
o Top managers lead through vision/strategy; middle/operational managers lead
daily tasks.

9.3 The Elements of Leadership

 Power = ability to influence behaviour.
Five types of power:
1. Legitimate Power – from formal position (e.g. CEO).
2. Reward Power – control over rewards like bonuses.
3. Coercive Power – use of threats (e.g. job loss).
4. Expert Power – from skills and knowledge (e.g. lead scientist).
5. Referent Power – from personal appeal and charisma.
 Most Effective Power Sources

o Referent and Expert power lead to high satisfaction and performance.

o Reward and Legitimate power give mixed results.
o Coercive power causes resistance and dissatisfaction over time.

Additional Key Elements

 Authority – The official right to make decisions and give orders.

 Responsibility – The duty to meet organisational goals.
 Delegation – Giving tasks and some authority to subordinates.
 Accountability – You remain answerable for outcomes, even if you delegate tasks.
Technology and Leadership – Bullet Point Summary (Half Page)

 Technology enhances leadership by making it easier to communicate, motivate, and

manage teams.
 e-Leaders are modern leaders who use digital tools to drive success and stay ahead in
technological advancement.
 Technology enables remote work, leading to:
o Higher employee satisfaction and flexibility.
o Cost savings on office space and utilities.
o Increased productivity and convenience.
 Remote work requires leaders to develop strong cross-cultural and virtual
communication skills.
 Automating management allows leaders to:
o Complete more tasks in less time.
o Use data, analytics, and AI for faster and better decisions.
o Enhance human effort, not replace it.
 Soft skills (e.g. empathy, listening, emotional intelligence) remain crucial.
 Leaders must build a connected, inclusive culture where everyone feels they belong.

Types of Leaders:
 Formal Leaders: Appointed by the organisation; recognised officially (e.g. managers).
 Informal Leaders: Recognised by peers; influence without formal authority.
 High-involvement organisations value both formal and informal leaders in full
management roles (planning, organising, leading, controlling).

Leadership Styles:

 Leadership style = consistent way leaders influence others; falls on a continuum:

Autocratic → Participative → Laissez-faire.

1. Autocratic Leadership:

 Top-down approach: Leader makes decisions alone with minimal input.

 Can be effective in high-stakes, fast-paced environments (e.g. military).
 Example: Elon Musk – visionary, decisive, controversial.
 Criticism: Can be narrow-minded, controlling, and suppress collaboration.
2. Participative Leadership:

 Involves team in decision-making; democratic and consultative.

 Boosts motivation, ownership, and productivity.
 Subtypes:
o Democratic: Group votes on decisions.
o Consensual: Full agreement is sought.
o Consultative: Leader decides after consulting team.
 Examples: Bill Gates, Indra Nooyi, Carlos Ghosn.

3. Laissez-faire (Free-Rein) Leadership:

 Full autonomy given to employees; manager steps in only if needed.

 Best for highly skilled professionals.
 Risks: Can lead to lack of direction, unclear expectations, and manager disengagement.
 Example: Steve Jobs – gave freedom but expected excellence and enforced strict
standards.

🔹 1. Transformational and Visionary Leadership

➤ Transactional Leaders

 Focus: Maintaining the status quo.

 Style: Task-oriented, use incentives to motivate employees to follow instructions.

➤ Transformational Leaders

 Focus: Change and innovation.

 How they lead: Inspire others using personal values, passion, and vision—not rewards.
 Key elements:
o Charisma
o Individualised consideration
o Intellectual stimulation
o Inspirational motivation

➤ Visionary Leaders

 Focus: The future—what can be.

 Style: Use emotional/intellectual appeal to influence and energise followers.
 Traits: Extroversion, openness, agreeableness.

➤ Effectiveness
  Improves performance, satisfaction, loyalty, and trust.
 Ideal for dynamic and competitive environments.
 Example: Barack Obama — led with transformation and inspiration.

🔹 2. Diversity Management
➤ Definition

 A proactive approach to include and manage diverse employees from different

backgrounds (race, gender, nationality, etc.).
 Goal: Maximise the potential of all employees while minimising disadvantages caused by
group identities.

➤ Types of Diversity Management

1. Intranational: Managing diversity within one country, e.g., including minority groups.
2. Cross-national: Managing diversity across countries, requiring awareness of local laws
and cultures.

➤ Characteristics

 Voluntary and often self-initiated.

 Offers tangible business benefits (e.g., innovation, wider perspectives).
 Broad definition means more inclusive and less resistance.

➤ Best Practices

 Get commitment from top management.

 Explore new talent pools beyond usual sources.
 Provide a safe space for discussions (e.g., mentorship).
 Integrate diversity into company objectives.
 Understand the difference between diversity (voluntary inclusion) and affirmative
action (corrective legal steps).

🔹 3. Servant Leadership and Stewardship

➤ Stewardship

 Empowers others to take ownership and control of their work.

 Promotes teamwork, decentralised decisions, and shared power.
  Leaders focus on developing others instead of dominating them.

➤ Servant Leadership

 Rooted in ethical leadership.

 Focuses on serving others first, not seeking personal gain.
 Key qualities:
o Service over self-interest
o Listening first to understand people better
o Building trust through moral leadership
o Setting realistic goals
o Helping whenever possible
 Example: Nelson Mandela, who put people above personal gain.

🔹 Importance of Ethical Leadership

 Ethical leadership begins with identifying and enacting the organisation’s purpose and
ethical values.
 These values guide internal alignment, market effectiveness, and stakeholder
responsibility.
 Leaders are accountable to stakeholders, stockholders, and employees in meeting
organisational goals ethically.

🔹 Tone from the Top

 A leader’s values usually become the organisation’s values — known as the "tone from
the top".
 Leader values must align with the mission, vision, and values of the organisation.
 Leadership impacts the strategy, culture, and governance system across all levels of
management.

🔹 Ethisphere’s Ethics Quotient Criteria

To evaluate a firm’s ethical standards, 5 criteria are used:

1. Ethics and compliance programme (largest portion of the score)

2. Integration of ethics into corporate culture
3. Corporate citizenship and environmental responsibility
4. Corporate governance (diverse board and leadership)
5. Leadership, innovation, and reputation
  Companies meeting all 5 are labelled "honorees", e.g., Accenture, 3M, Apple.

🔹 Traits of Ethical Leaders

Ethical leaders demonstrate strong character and values in attitude and action:

 Respect for others

o Treat people with dignity and allow autonomy.
o Leads to employee confidence, loyalty, and productivity.
 Fairness to all stakeholders
o Equal treatment and opportunity based on needs, rights, and contributions.
o No favoritism in decisions.
 Commitment to common good
o Mentor, build teams, empower others, and support well-being.
 Community building
o Focus on group goals over personal gains.
o Ethical leaders inspire similar behavior from followers.
 Honesty and openness
o Share accurate and detailed information appropriately.
o Dishonesty harms reputation, productivity, and trust.

🔹 Failures in Ethical Leadership

When leaders lack ethics, they may fall into one or more of the following traps:

 Ethical blindness – Failing to recognise ethical issues.

 Ethical muteness – Avoiding or misusing ethical language; values not reflected in
actions.
 Ethical incoherence – Contradictory values and behaviors (e.g., praising responsibility
but rewarding numbers).
 Ethical paralysis – Inability to act ethically due to fear or ignorance.
 Ethical hypocrisy – Preaching values but avoiding responsibility themselves.
 Ethical schizophrenia – Shifting values based on context; no consistency.
 Ethical complacency – Believing one is immune to unethical behavior due to position or
past performance.

🔹 Final Point
  An ethical organisational culture is crucial. Without it, unethical leadership decisions
are likely to spread and damage the organisation

Groups vs Teams
 Groups consist of people who share common characteristics or purposes, interacting
regularly.
 Groups share beliefs and standards and work on common tasks to achieve shared goals.
 Types of groups include:
o Work groups (formal like committees, or informal like problem-solving teams)
o Social/special interest groups (e.g., book clubs)
o Inter-agency groups (collaborations between organisations)
o Pressure groups (aim to challenge status quo using media tactics)
 Cohesiveness measures group success; more cohesive groups show stronger identity,
cooperation, and loyalty.

Teams

 Teams are more specific than groups, formed to achieve a common goal, often with
different tasks for each member.
 Types of teams:
o Functional teams: Members from the same department working under one
supervisor.
o Cross-functional teams: Members from different departments collaborating on
projects.
o Virtual teams: Members working remotely, connected via online tools.
o Self-management teams: Employees manage their own work without a
supervisor.
o Matrix teams: Employees report to more than one supervisor for projects and
departmental work.
o Contract teams: Temporary, highly skilled professionals hired for specific
projects.
o Task force teams: Temporary teams created to solve specific challenges or
crises.
o Executive management teams: Senior leaders who assist the CEO with key
decisions.

Keys to Team Success

 Set clear goals

 Foster creativity
  Encourage idea sharing
 Establish effective communication
 Provide strong leadership

Business Communication: Key Points

 Definition: Business communication is the process of sharing information both within

the organisation and with external parties. It is essential for achieving organisational
goals.
 Purpose: Communication facilitates presenting ideas, making plans, executing decisions,
reaching agreements, sending orders, selling products, holding meetings, and providing
feedback.
 Communication Process:
o Sender: Encodes the message.
o Channel: The method used to send the message.
o Receiver: Decodes the message.
o Feedback loop: The receiver responds, becoming the sender, making
communication interactive.
o Most organisations use a transactional model considering social, relational, and
cultural contexts, aiming to build relationships and communities, not just
exchange messages.
 Types of Communication:
o Internal: Upward (subordinates to management), downward (management to
subordinates), and lateral (between departments).
o External: Communication with customers, suppliers, and other stakeholders
outside the organisation.
 Common Problems:
o Email overload and unclear messages.
o Communication silos (important info trapped in departments).
o Poor communication with remote employees.
o Low engagement and high turnover due to communication failures.
o Poor customer service linked to low employee morale and lack of information.
 Non-verbal Communication: Includes facial expressions, tone, gestures, physical space,
cultural factors, body language, and environment—all important in conveying messages.
 Channels: Can be written (reports, emails, documents) or verbal (meetings, phone calls,
video conferencing).
o Written communication keeps records and aids planning.
o Verbal communication encourages immediate interaction and idea sharing.
 Technology: Provides multiple platforms (e.g., Microsoft Teams, Zoom) that enhance
communication, enabling leaders to manage teams remotely, request reports, hold virtual
meetings, and improve efficiency with process flow tools.