Comparing leadership and management in organisations

Essay add: 11-01-2017, 13:14   /   Views: 29

Leadership cannot replace management; it should be in addition to management. In this essay discussion I will compare leadership and management in organisations. It will show that managers and leaders are not different types of people; many managers already have the abilities and qualities needed to be effective leaders. The proposition in my essay: (based on Daft et al, 2009:14). In the first part of my essay I will explain the nature of leadership and management by giving the definition of what is a manager and what is a leader. In section two I will show arguments in agreement with the proposition; leadership cannot replace management. The third part of the essay has got a different opinion and explanation of how leadership can replace management and I will give arguments in disagreement with the proposition. Examples will be given and will be supported by the relevant theories. Section four, the last section, will consist of a real organisation and will discuss how leaders EI in organisation can make it more or less effective or profitable for organisations.

Now, in the twenty first century this is the new reality for organisations - a changing world, terrorism, wars and scandals. People in organisations around the world are feeling the impact of these events and are forced to adapt to new ways of working. Also adding to this - recent economic uncertainty, widespread ethical scandals and the insecurity linked to terrorism and war. Today's leaders are facing a really tough job to keep people grounded, focused and at the same time motivated to accomplish positive goals.

In reality, organisations should be shifting from a traditional and rational management approach that mostly emphasises on stability and control, to a leadership approach that values change, empowerment and relationships to make their organisation effective.

What is the difference between management and leadership?

In Doug Johnson's article it is said that "Management is doing things right; leadership is doing the right things" (Johnson, 2009), but at the time "You can't do the right things unless you know how to do things right".(Johnson, 2009) This explains that management and leadership are related to each other, because you cannot do the right things unless you know how to do things right, therefore management does not exist without leadership and leadership cannot exist without management.

Organisations can be described as- collections of people who work together and synchronize their actions to achieve a wide variety of set goals, or desired future outcomes.(Jones, 2011)Secondly, managers are the people who are responsible for supervising and making the most of an organisation's human and other resources to achieve the organisation's goals.(Jones, 2011)

Management is the planning, organising, leading, and controlling of human and other resources to achieve organisational goals efficiently and effectively.(Jones, 2011)

What is the leadership?

Leadership, in an organizational role involves establishing a clear vision with others so that they will follow willingly, providing the information, knowledge and balancing the conflicting interests of all members or stakeholders. A leader comes to the forefront in case of crisis, and is able to think and act in creative ways in difficult situations.(Jones, 2011)

Unlike management leadership depends on personality and cannot be taught, but it can be enhanced through coaching and mentoring. Another division between leadership and management skills that is practical and useful is the distinction made by Marcus Buckingham.(Romero, 2010)The leadership skills versus management skills differ, so that you may build a sustainable competitive advantage. Understanding this distinction will help you gain clarity with roles and responsibilities, with organizational design and most of all, you management and leadership practice.(Romero, 2010)So, we cannot say that leadership is different from management, but we can say that leadership and management are related. They are related to each other, management in addition to leadership will only help achieve organisational goals.

Arguments in agreement with the proposition

What do leaders do in organisations now? Leaders in today's organisations do direction setting; they align people, motivate and inspire them to strive for the best achievements that will benefit the organisation. A realistic view of leadership in the twenty first century is a crisis management, diversity, empowerment and collaboration. Today's leaders of organisations need to have an ability to build a trust between them and their employees and also a culture of performance, because they can affect the results of an organisation, they can help achieve success and a profit in the future for the organisation.

The climate is said to be the feel of an organization.(Ivancevich, 2007) While the culture is the deeply rooted nature of the organization that is a result of long-held formal and informal systems, rules, traditions, and customs; climate is a short-term phenomenon created by the current leadership. Climate represents the beliefs about the "feel of the organization" by its members. This individual perception of the "feel of the organization" comes from what the people believe about the activities that occur in the organization.(Bass, 2008)

However, culture is also a long-term, complex phenomenon. Culture represents the shared expectations and self-image of the organization. The mature values that create tradition or the "way we do things here." Things are done differently in every organization. The collective vision and common folklore that define the institution are a reflection of culture. Individual leaders cannot easily create or change culture because culture is a part of the organization. Culture influences the characteristics of the climate by its effect on the actions and thought processes of the leader. But, everything you do as a leader will affect the climate of the organization.(Northouse, 2007)

Leadership for management in organisations is not automatic, and for these reasons leadership in organisations can be derailed for the following reasons: acting in a bulling style, being arrogant and cold, betraying personal trust, being too ambitious and playing politics, having a problem with business performance and being unable to delegate.

Some researches tell us about a behaviour problem in leadership inside organisations. Alan Goldman, talks about the darker side of companies and leaders and giving evidence. After the investigation of different companies from the fashion industry to an engineering corporation, some leaders were destructive, toxic, emotionally turbulent, and impulsive and were damaging their organisations.(Goldman, 2009) Alan Goldman at the same time was providing for this organisation, he was providing the necessary tools for early recognition, assessment and treatment.

Alan Goldman gave an example of Black Valley Enterprises Inc. CEO, Dr.Harlin "Hudson" Blackman. Blackman's vision was to provide the immediate metropolitan area with upscale luxury apartment homes-something the market was lacking at the time. The first property bought was a 114-unit community located in the prestigious "Zanemore Estate". Following this highly successful transaction, Mr.Blackman decided that he would reconceptualise and limit his operations. Limit to the designing, building and marketing of upscale properties.(Goldman, 2009) But not everything was quiet and smooth inside the company. A toxic climate also existed.

Dr. Blackman had built a strong team consisting of five partners and five departments: operations, development, construction, architecture and marketing. These partners brought a mix of high-level education and a diverse marketplace. But between 2005 and 2006, the company lost two of its partners and started to show a development of a toxic culture inside the company .Later the company started to see financial loses and the major problem was that all of the company's senior managers were moving in different directions. They were not working towards accomplishing a unified and collaborative vision of Black Valley Enterprises.(Goldman, 2009)

Currently, there are 417 employees working for Black Valley. Of those 417, 20 have been there longer than six years, 80 from three to four years, 227 less than three years and the remaining employees have come on board during the last two years.(Goldman, 2009) The most common complaints spoken by employees include: no respect from leadership and an unstable life at Black Valley.(Goldman, 2009) The remaining employees who have escaped the on-going downsizing are in constant fear of "whether they will be next".(Goldman, 2009) Human Resources is not a safe haven for voicing complaints, each employee is treated differently and their bare decisions made in the workplace are gender-based, sexual orientation and or racially motivated, there is a constant, on-going, climate of distrust among employees and senior managers.(Goldman, 2009) This is due to a result of destructive leadership at Black Valley. In my opinion they went in the wrong direction and failed in the alignment of people.

Limitations of past research also show - that leadership is intrinsically an emotional process, where leaders' expressions of emotion affect their standing as leaders.(Smith, 2009) While this idea is not new and there has been a lot of research examining the influence of leader emotion, we are unaware of previous research examines combinations of emotions rather than just examining a single discrete emotion in crisis situations.(Smith, 2009)The social constructionist approach to emotion expression argues that although all emotions are reducible to a few basic, universal emotions such as anger and sadness, given stimulus may elicit multiple discrete emotions.(Smith, 2009)

There are reasons to imagine that expressing both anger and sadness in response to a failed product crisis may lead to the most favourable results for leaders. Although sadness is associated with weakness, it is also associated with warmth, concern and sympathy.(Smith, 2009) Concern and sympathy are assurances of emotional empathy and empathy has been linked to effective leadership. Thus, a leader expressing sadness because of a failed product communicates concern and sympathy, which is important to express when considering the potential or actual injuries during crises.(Smith, 2009) On the other hand, expressing sadness alone may result in uncertainly and prompt negative assessments of the leader. As research has shown, in times of crises, a strong leader reassures his individuals.(Smith, 2009)

A good example of poor leadership and low performance can be related to a Military business. Recent studies by Richard Bullis and George Reed in the U.S. Army War College class of 2008 have found that senior military officers frequently reported experiences with destructive leadership.(Reed, 2010) Colonels reported to be experiencing less toxic leadership than lieutenant colonels, and GS 15s experienced it less than GS 14s.(Reed, 2010)The study suggested that branches of the military service (Army, Navy, Air Force and Marine Corps) experience toxic leadership at comparable rates, and the experience did not vary significantly by race or gender.(Reed, 2010) Civilian employees, U.S. Army Reserve and National Guard officers reported that they experienced more toxic leadership than their active-duty military counterparts.(Reed, 2010) In this case most of the time the toxic leader was their immediate supervisor, a male of the same specialty and race, and also a captain or major.(Reed, 2010) The behaviours most often regarded as problematic included; having an arrogant or superior attitude (49,7%); unreasonably holding subordinates accountable for matters beyond their control (48,5%) ;valuing his or her career over the good of the organisation (40,1%); losing his or her temper (35,9%); and ignoring required counselling activities (31,1%).(Reed, 2010)It is evident from these statistics a lot of officers were arrogant, ignorant and too ambitions.

This research was done because in the U.S. Military business faults existed, there was a loss in direction and problems with alignment of people. In a Military Business the captain or supervisor must have good command skills to motivate solders and keep his troops disciplined, but a good climate and atmosphere is also important for the solders to do what they are supposed to do best. This is very important currently as there was a recent war with Iraq and terrorism around the world still exists. Also they are responsible for dangerous weapons. They need to be physically fit and must concentrate on what they are doing. But toxic emotions can make soldiers depressed, less effective and disoriented. Leadership has to develop in Military business not only in the USA army in, but in armies in other countries too, including Russia.

Leadership in Russian military is still in an awful state and just like in the U.S military - requires many improvements. It is compulsory in Russia for males aged 18 -27 to do military service, but most of the males inside this age group are against attending because they are afraid of being beaten up or sometimes, even beaten to death.(CIA, 2011) Statistics show that in Russia most males after attending military service return home depressed, and in some case badly injured, sometimes paralyzed. This can be related back to leadership inside the military service, the commanding officers are very aggressive, arrogant and short-tempered. The males are not prepared for military straight after school, because they are used to a home environment and therefore, the armies' commanders' aggressiveness scares them. 60% of males that are in that age group manage to find their way out of doing military service. Usually due to alleged medical reasons, thus also showing how unwilling they are.(CIA, 2011) Leadership cannot replace management in the military business, but still the military is run by the management, with better leadership they could do better and be more successful.

Adding to this section I would like to say that I strongly believe that leadership cannot replace management and management and leadership have to work together in order to achieve success, best results and profits for the organisation.

Arguments in disagreement with the proposition

Effective leadership in organisations give vision and direction. Mission and vision statements in organisation provide a framework for staff to develop a common ground. The most successful organisations always have a written mission, vision and focus.(Weinzetl, 2010) Mission and vision statements provide an objective basis for analysing which business to follow. It is the responsibility of organizational leadership to consistently promote and sell its vision to everyone within the organization.(Weinzetl, 2010) While after the vision is intended to be a long-term commitment, it is just as important to analyse the success of the vision strategy. Strategic planning is an effective tool to help define the organizational mission, vision, goals and objectives.(Weinzetl, 2010)

A good example of who had created a successful vision for the future of the organisation is Samsung Electronics, who became a "Global Technology Leader."(Jones, 2011)In the 2000's Samsung Electronics became the second most profitable global technology company after Microsoft. "Samsung accomplished this when its CEO Lee Kun He decided to develop and build competencies first in low-cost manufacturing, second in Research and Development, and then use them to make new and improved products for customers all over the world."(Jones, 2011) Samsung had a good plan to increase its profits and also the development and manufacturing of products to enter new industries in order to produce attractive new products for global customers.

Samsung became the leading supplier of advanced flash memory chips and LCD screens, premium-priced products that sold to the other global electronics makers, including Japanese flat screen TV makers such as Sony.(Jones, 2011)This success is as result of good direction setting and alignment of people across a culture in Samsung Electronics. To achieve these goals Samsung followed its plan of strategy very well, they were focusing on objects, they had positive power and also the control inside the organisation was good. All of the team worked well, most importantly with a positive approach to leadership.

In order to be an effective leader in an organisation, these personal characteristics must be present - intelligence, knowledge and expertise, dominance, self-confidence, high energy, tolerance for stress, integrity and honesty, and also maturity.(Jones, 2011) The moods and emotions leaders experience on the job, and their ability to effectively manage these feelings, can influence their effectiveness as leaders.(Jones, 2011) Furthermore, emotional intelligence can contribute to leadership effectiveness in multiple ways, including encouraging and supporting creativity among leaders.(Jones, 2011) The Behaviour Model of leaders includes consideration when they show their subordinates that they trust, respect and care about them and this initiates the structure when they take steps to make sure the work gets done. Subordinates perform their jobs acceptably and the organisation is efficient and effective.(Jones, 2011)

Jim Senegal, CEO Manager at Costco, believes that consideration is so important that one of the principles in Costco's code to ethics is "Take care of Our Employees".(Costco Wholesale Investor Relations, 2006) Jim Senegal believes that caring about the wellbeing of his employees is a win-win proposition because Costco's employees are committed, loyal and motivated.

Costco Wholesale Corporation is the fifth largest retailer and the top warehouse retailer, in the United States.(Greenhous, 2008) "Costco pays the majority of health insurance costs for its employees (employees pay around 8% of health insurance costs compared to an industry average of around 25%), and part-time employees receive health insurance after they have been with the company for more than six months. Overall, about 85% of Costco employees are covered by health insurance."(Greenhous, 2008)

Additionally, turnover and employee theft rates at Costco are much lower than industry averages.(Greenhous, 2008)The CEO commented that "treating employees well helps build customer loyalty at Costco. Surely customers enjoy the bargains and low prices that come from shopping in a warehouse store. However, customers are also loyal to Costco because they know the company treats its employees well and their bargains are not coming at the expense of employees 'pay checks and benefits."(Greenhous, 2008)

This is a good example of effective leadership in an organisation. CEO Jim Senegal's behaviour was indicated on trust, respect with subordinates and caring of them, moral intelligence was also on a high level. Workers performed their job well and the organisation was efficient and effective.

Gender and leadership is described as "A widespread stereotype of women is that they are nurturing, supportive and concerned with interpersonal relations. Men are stereotypically viewed as being directive and focused on task accomplishment. Such stereotypes suggest that women tend to be more relation-oriented as managers and engage in more consideration behaviours, whereas men are more task-oriented and engage in more initiating-structure behaviours."(Jones, 2011)

This raises the question: do women lead in a different way to men? "Research suggests that male and female managers who have leadership positions in organizations behave in similar ways.(Eagly, 1990)Women do not engage in more consideration than men, and men do not engage in more initiating structure than women. Research does suggest, however, that leadership style may vary between women and men. Women tend to be somewhat more participative as leaders than men, involving subordinates in decision making and seeking their input.(Eagly, 1990) Male managers tend to be less participative than are female managers, making more decisions on their own and wanting to do thing their own way. Furthermore, research suggests that men tend to be harsher when they punish their subordinates than do women."(Chronicle, 2010) The key finding from research on leader's behaviours is that male and female leader's do not differ in performance behaviours and are equally effective as leaders.

Back to the theory explaining the nature of leadership, which is the process by which a person exerts influence over other people - inspires, motivates, and directs their activities to help to achieve success for an organisation.(Jones, 2011) For a leader it is very important to have a good personality and capability to manage tasks across the culture organisation.

Empowerment is a part in modern management for effective leaders. Empowerment - the process of giving employees at all levels the authority to make decisions, be responsible for their outcomes, improve quality and cut costs - is becoming increasingly popular in organizations.(Jones, 2011) Empowerment can contribute to effective leadership for several reasons: Empowerment increases a manager's ability to get things done because the manager has the support and help of subordinates who may have special knowledge of work tasks; secondly empowerment often increases workers' involvement, motivation and commitment. This helps ensure that they are working toward organizational goals, and lastly empowerment gives managers more time to concentrate on their pressing concerns because they spend less time on day-day supervision.(Jones, 2011)

A good example of effective leadership is an example of a female leader, who realized the benefit of empowerment. The CEO of MTV networks, Judy McGrath, who has one of the most challenging and encompassing leadership positions in the media industry.(Lowry, 2006) MTV Networks is a unit of Viacom in United States of America .After McGrath took the position of CEO, MTV networks was accessed by more than 440 million households in over 165 viewing territories.(Lowry, 2006) McGrath certainly seemed up to the challenge. She is one of the only five women that has been included in 2009's "Fortune magazine's" list of "50 Most Powerful Women in business", she ranked 20th. (Lowry, 2006) Her personal leadership style emphasizes empowering all members of the MTV organization as well as its viewers.

McGrath networks daily with wide-ranging contacts, keeping up with the latest developments in the industry and pop culture and always on the look-out for new ideas and opportunities. McGrath faces new challenges as she leads MTV forward. MTV programming is now a part of media establishment and in an era of broadband, IPods and online everything, she realizes that MTV cannot rest on its laurels. It must continually transform itself to maintain its hip and edgy focus and continue to appeal to its audience. McGrath has pushed MTV to deliver services from multiple digital platforms ranging from cell phones to new broadband channels to videogames.(Lowry, 2006)Clearly, her vision was combined with her style of empowering employees and also risk was taken with creativity. So, can females use their creative mind for the future and become successful leaders or not? This to me shows that yes, they can.

After previous discussions, my suggestion is that if leadership in organisations is motivating people effectively and efficiently. This can be done by pushing it in the right direction with a good behaviour approach; which can replace management and "stand-alone" without management.

Real world example of behaviour control in action

Managers have to be leaders and leaders are often, but not always, managers. But distinction can be made between the processes of management and leadership. Management is concerned with achieving results by effectively obtaining, deploying, utilizing and controlling all the resources required.(Armstrong, 2008)

Leadership focuses on the most important resource, which are people. It is the process developing and communicating a vision for the future, motivating people and gaining their commitment and engagement.(Armstrong, 2008)

The distinction is important. Management is mainly about the provision, deployment, utilisation and control of resources. But when people are involved, and people almost always are involved, it is impossible to deliver results without providing effective leadership. It is not enough to be a good manager of resources; you also have to be a good leader of people.(Armstrong, 2008)

Leadership skills are important; they must be used in conjunction with management in order to achieve the organisations goals. Leadership skills and qualities usually come from experience, personal development and exploration. Leadership cannot come or be taught by books.

The fundamental ways of becoming a better manager is to know where you are going, how you are going to get there and how will know you have arrived, aim to master the present and forestall the future, communicate effectively -what is happening, why it is happening, make a clear to people what you expect them to do, realize each person is different, let people know how they are getting on, let people make mistakes, be prepared to say " no" and do not worry about being liked and instead build trust.(Armstrong, 2008)

EI is a critical ingredient in leadership. Extensive research showed that effective leaders are alike in one crucial way: they have a high degree of emotional intelligence, which plays an increasingly important part at higher levels in organisations where differences in technical skills are negligible importance.

Research tells us that moods and emotions of leaders do influence their behaviour and effectiveness as leaders. Emotional intelligence (EI) help leaders to develop a vision, motivate their employees to commit to this vision, and also energise them to achieve this vision. EI helps leaders develop; identity for the organisation, trust, cooperation and maintains flexibility to respond to change. No difference in behaviour when they perform -equally effective as leaders. (Armstrong, 2008)

Research conducted by David McClelland, a leading American expert in human and organisational behaviour, found that EI not only distinguishes outstanding leaders but can also be linked to strong performance. He established that when senior managers had a critical mass of EI capabilities, their divisions outperformed yearly earning goals by 20 per cent.(Armstrong, 2008)

The four components of EI identified by Daniel Goleman are: self-management - the ability to control or redirect disruptive impulses and moods and regulate your own behaviour, self- awareness - the ability to recognize and understand your moods, emotions and drives as well to their effect on others, social awareness - the ability to understand the emotional make-up of other people and skill in treating people according to their emotional reactions, and social skills- proficiency in managing relationships and building networks to get the desired result from others and reach personal skills.(Armstrong, 2008)

EI usually increases with maturity and it can be learnt, but it takes time and individual effort. It can be developed through special programmes and will integrate with management and leadership skills.

Leaders, like people everywhere, sometimes make mistakes. EI may also help leaders respond appropriately when they realize they have made a mistake. Recognizing, admitting, and learning from mistakes can be especially important for entrepreneurs who start their own businesses.(Fenn, 2007)

A good example of when a leader admitted in making a mistake in a business is "Maureen Borzacchiello", CEO of Creative Display Solutions.(Fenn, 2007) She founded her small business in 2001 which provided displays, graphics, and exhibits for use in trade shows and at events for companies ranging from American Express to JetBlue Airways.(Fenn, 2007) Her company was growing, and she had received an award from the non-profit organisation, "Count Me In for Women's Economic Independence."(Fenn, 2007)

But in 2006 she realized that she had overextended her business financially. A large investment in inventory paired with a substantial lease commitment, the need for office space renovations and the addition of three new employees brought her to the point where she lacked the cash to pay her employees their regular salaries. When she had made these decisions, she thought that she and her husband, who also works in the company, would be able to generate the revenues to cover the expenditures. But unfortunately, her brother in law passed away, and their involvement in family matters meant they weren't able to get a new account as quickly as she had thought they would.(Fenn, 2007)

She met with her employees and apologized for the past. She admitted she needed to better understand her company's financial situation and daily cash flow. She reassured employees that the company would be back on square footing in two to three months, and again promised she would pay much more attention to on-going financial performance and cash flow in the future.(Fenn, 2007)

True in her promise, within two months all of her employees were able to return to their regular work hours and in 2007, "Creative Display Solutions" had generated over $1 million in revenues (which is double its revenues at the time of their financial problems).(Fenn, 2007) To this day Creative Display Solutions remains a profitable business; and by 2010 its list of clients included more than 600 companies. (Sonnerberg, 2011) Clearly Borzacchiello effectively handled the temporary crisis her company faced, by admitting and apologizing for her mistake and being honest with employees about her future prospects.(Fenn, 2007)

This showed her emotionally intelligent skills. She recognized self-awareness and self-management, this is because she knew and was aware of her mistakes and managed those mistakes by confronting her employees directly and explaining the situation. She also stayed true to her word, which also shows self-management.

In our current world both leadership and management are important and can be the reason for failure or success of an organization. I personally think that although they are different skills, if they are to work together they will help the organization achieve its goals and get through tough financial times, like todays recession.

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