Section 1.4 Managing People: - Leadership

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  • Leadership
    • What is leadership?
      • A relationship through which one person influences the behaviour or actions of other people
    • Two different leadership perspectives
      • Strategic Leadership
        • - Strategic leaders are the people who influence or control the corporate strategy of a business
        • - Often personally identified with the strategy
        • Occurs both in small firms (e.g. the founder) and large corporates
        • How strategic leadership is demonstrated
          • Leadership as command
            • Where leaders take direct control
          • Leadership as vision
            • Where leaders set the vision and core beliefs
          • Leadership as decision-making
            • Where the leader weighs up the options and decides
          • Leadership as symbolic
            • Where the leader is the embodiment of the strategy, but not involved day-to-day
    • Leadership or Management?
      • Leaders
        • Inspire people, build relationships, take risks, have followers
      • Managers
        • Enact the plan, use their authority, manage risks, have subordinates
    • Traditional classifications of leadership style
      • Authoritatrian
        • Focus of power is with the manager
        • Communication is top-down and one way
        • Formal systems of command and control
        • Use of rewards and penalties
        • Very little delagation
      • Paternalitstic
        • Leader decides what is best for employees
        • Links with Mayo - addressing employee needs
        • Akin to a parent/child relationship
        • Still little delegation
      • Democratic
        • Focus of power is more with the group as a whole
        • Leadership functions are shared within the group
        • Employees have greater involvement in decision-making
        • Emphasis on delegation and consultation
        • A trade-off between speed of decision-making and better motivation and morale?
      • Laissez-faire
        • Leader has little input into day-to-day decision-making
        • Conscious decision to delegate power
        • Managers/employees have freedom to do what they think is best
        • Effective when staff are ready and willing to take on responsibility
        • Not the same as abdication
    • McGregor Theory X and Y
      • Theory Y Managers
        • Most people enjoy work
        • Workers will take responsibility and organise themselves
        • Decision making can be delegated
      • Theory X Managers
        • Average worker is lazy and dislikes work
        • Workers need to be controlled and directed
        • Centralised organisation and exercise of authority
    • Why modern business leadership is moving away from autocratic styles
      • Changes in society's values
      • Better educated workforce
      • Focus on need for soft HR skills
      • Changing workplace organisation
      • Greater workplace legislation
      • Pressure for greater employee involvement
    • Which leadership style is best?
      • Many alternative forms and styles
      • Right leader for the right situation
        • Autocratic makes more sense when business is in trouble (e.g. Rapid turnaround)
        • Autocratic would be inappropriate where performance is highly dependant on effective team-working and decentralisedoperation
        • Stage of business: start-up, very established and complex
    • Moving from entrepreneur to leader
      • Successful entrepreneurshave distinctive characteristics not always suitable for leading a bigger business
      • As a business grows and becomes more complex delegation is much more important
      • Organisational design and leadership style needs to change as a business matures
      • Many entrepreneursbecome ineffective "bosses" - it is often best if they stand aside to let their business develop into the next stage
  • In reality, both are closely linked
  • A leadership style is the way that the functions of leadership are carried out and the way that a leader behaves




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