OLC EUROPE HND BUSINESS

1. OLC EUROPEHND BUSINESS LEADERSHIP

2. AIM AND OBJECTIVES AIM To analyse theories of motivation and management practices OBJECTIVES Upon completion learners should be able to describe the component elements of Leadership Differentiate between leadership and management functions Outline some major theories of management and leadership styles Explore the nature of leadership in organisations

3. LEADERSHIP • Having looked at the nature of management we now turn our attention to managing people. • This corresponds to the functions of management we have called motivating, directing, or leading

4. INTRODUCTION There are different ways for managers to go about securing the co-operation and controlled performance of the staff Some managers order people about; others try to persuade them ; others encourage them to make their own decisions So are these different types of managers , or different approaches or styles that a manager can adopt

5. Leaders and managers • The terms leadership and management are often used interchangeably • However, it is worth noting that it is possible to distinguish between leadership and management

6. What is Leadership? • There are many ways of looking at leadership, and many interpretations of leadership • Buchanan and Huczynskidefined a leader as • Leadership is seen as a social process in which one individual influences the behaviour of others without the use or threat of violence

7. Thus leadership can be defined as: • Leadership is the process of influencing others to work willingly towards goals, to the best of their capabilities, perhaps in a manner different to that which they would otherwise have chosen • Leadership is related to motivation, communication and delegation, as well as the activities of groups

8. Leadership include : Exerting influence, motivating and inspiring, helping others realise their potentials, positive exemplary behaviour, selflessness and making a difference • Leadership does not necessarily take place within the hierarchical structure of the organisation. Many people operate as leaders without their roles ever being clearly established

9. Leadership Differences Between Leadership and Management Management According to Miller, et al management involves using human, equipment, and information resources to achieve various objectives. Management function include planning and budgeting, organising and staffing, co-ordinating , Controlling On the other hand, leadership focuses on getting things done through people. That is leadership involves essentially people-centre The leadership function is to: Create a vision, communicate the vision, Energise, inspires and motivates others and Create the culture

10. In a nutshell, the difference is: • Leadership is setting a new direction or vision for a group that they follow, i.e.: a leader is the spearhead for that new direction • Management controls or directs people/resources in a group according to principles or values that have already been established. • Thus you manage budgets, procedures, and so on), but you lead people

11. Compass - Leading the Way with Leadership of Group Compass - Leading the Way with Leadership of Group Compass - Leading the Way with Leadership of Group Compass - Leading the Way with Leadership of Group Compass - Leading the Way with Leadership of Group Leadership without Management ..sets a direction or vision that others follow, without considering too much how the new direction is going to be achieved. Other people then have to work hard in the trail that is left behind, picking up the pieces and making it work. Compass – Leading the way with relationship group .

12. Management without leadership ...controls resources to maintain the status quo or ensure things happen according to already-established plans. E.g.: a referee manages a sports game, but does not usually provide "leadership" because there is no new change, no new direction - the referee is controlling resources to ensure that the laws of the game are followed and status quo is maintained.

13. Leadership Combined with Management ...does both - it both sets a new direction and manages the resources to achieve it. E.g.: a newly elected president or prime minister. Conclusion To be an effective manager, it is necessary to exercise the role of leadership. A common view is that the job of a manager requires the ability of leadership and that leadership is in effect a subset of management, although leadership is a special attribute which can be distinguished from other elements of management.

14. Note • Managers can only be called leaders if and when they have an inspiring, energising and motivation influence on their followers • A Leader must have followers - the essence of leadership is followership. This means it is the willingness of people to follow that make a person a leader. • Leadership requires a conscious intention on the part of the leader to influence others. • If you yawn, for example, and others around you feel the urge to do the same, it would more properly be called behavioural contagion than leadership

15. The Leadership Relationship • The most important point about leadership is the manner in which the leader influences the behaviour and actions of other people. • Leadership is a dynamic form of behaviour and there a number of variables that affect the leadership relationship. • McGregor identifies four major variables as: • The characteristics of the leader • The attitudes, needs and other personal characteristics of the followers • The nature of the organisation, such as its purpose, its structure and the tasks to be performed and • The social, economic and political environment. McGregor concludes that ‘leadership is not the property of the individual but a complex relationship among these variables’

16. The Leadership Relationship Kouzes and Posner posit that ‘credibility is the foundation of leadership’ following their research in over 30 countries to find out what ‘people look for and admire in a leader’ In answer to the question, people consistently identified with leaders who were: • Honest (with integrity and trustworthiness) • Forward looking (with vision and sense of direction) • Inspiring (with enthusiasm and passion) • Competent (with expertise and track record for getting thing done)

17. Power and Leadership Influence Leadership influence is dependent upon the type of power that the leader can exercise over the followers. French and Raven identify five main sources of power: • Reward Power (perception of ability to reward compliance) • Coercive Power (fear based on perception of ability to punish) • Legitimate Power (Perception of right to exercise influence) • Reference Power (Identification with the leader’s charisma) • Expert Power (Perception competence and expertise) These sources of power are based on the subordinates’ perception of the influence of the leader, whether it is real or not.

18. Other Sources of Power Finlay suggests that two additional sources of power can be identified in addition to the five identified by French and Raven: • Personal Power (supported and trusted by their colleagues and subordinates) • Connection Power (which results from personal and professional access to key people and information. Yuki suggests that a further relevant source of power is: • Control over information

19. Approaches to Leadership Due to its complex and variable nature, different frameworks have been used to consider different approaches to the study of managerial leadership. One way is in terms of: • The qualities or traits approach • The functional or group approach, including action-centred leadership • Leadership as a behavioural category • Styles of leadership • Contingency theories • Transitional and transformational leadership • Inspirational or visionary leadership

20. Qualities or Traits Approach The qualities and traits approach assumes that leaders are born and not made Leadership consists of certain inherited characteristics, or personality traits, which distinguish leaders from their followers The qualities approach focuses attention on the man or woman in the job and not on the job itself It suggests that attention is given to the selection of leaders rather than to the training of leaders Peter Drucker (1955) makes the point that: Leadership is of utmost importance. Indeed there is no substitute for it. But leadership cannot be created or promoted. It cannot be taught or learned’

21. The functional or Group Approach This approach of leadership focuses attention not on the personality of the leader nor on the man or woman in the job per se, but on the functions of leadership. Attention is focused on the functions and responsibilities of leadership, what the leader actually does and the nature of the group. Greater attention can be given to the successful training of leaders and to the means of improving the leader’s performance by concentrating on the functions which will lead to effective performance by the work group. The skills of leadership can be learned, developed and perfected - everybody can be a leader. The task is for companies to seek out people with leadership potential and expose them to career experiences designed to develop their potential

22. Action-Centred Leadership John Adair’s Action-Centred Leadership theory focuses on what leaders actually do. The effectiveness of the leader depends upon meeting three areas of need within the workgroup: • The need to achieve the common task • The need for team maintenance • The individual needs of group members

23. Action-Centred Leadership

24. Leadership as a Behavioural Category This approach draws attention to the kinds of behaviour of people in leadership situations The Ohio State Leadership Studies, undertaken by the Bureau of Business Research at the Ohio State University focused on the effects of leadership styles on group performance Results of the study indicated two major dimensions of leadership behaviour labelled ‘consideration’ and ‘initiating structure’ Consideration reflects the extent to which the leader establishes trust, mutual respect and rapport with the group and shows concern, warmth, support and consideration for subordinates Initiating Structure reflects the extent to which the leader defines and structures group interaction towards attainment of formal goals and organises group activities. This dimension is associated with efforts to achieve organisational goals Consideration and Initiating Structure were found to be uncorrelated and independent dimensions. Leadership behaviour could therefore be shown on two separate axes. A high-consideration, high structure style appears to be generally more effective in terms of subordinate satisfaction and group performance

25. Employee or Production Oriented Supervisors Another major study carried out at the Michigan Institute for Social Research to identify effective supervisors (measured along dimensions of group morale, productivity, and cost reduction) appeared to display four common characteristics: • Delegation of authority and avoidance of close supervision • An interest and concern in their subordinates as individuals • Participative problem solving • High standard of performance The first three of these supervisory characteristics are examples of consideration, with the fourth characteristic exemplifying structure Likert, who has summarised the findings of the University of Michigan studies, used the terms employee centred and production-centred supervisors Likert concluded that employee-centred supervisors who get best results, tend to recognise that one of their main responsibilities is production.

26. Major Dimensions of Managerial Leadership There appears to be a general agreement on two major dimensions of managerial leadership. This can be extended to include the work of McGregor and of Blake and McCanse

27. Leadership Style Leadership style is the way in which the functions of leadership are carried out, the way in which the manager typically behaves towards members of the group. Leadership styles have been influenced by such factors as: • increasing business competitiveness and recognition of efficient use of human resources; • changes in the value-system of society; • broader standards of education and training; • advances in scientific and technical knowledge; • changes in the nature of work organisation; • pressure for a greater social responsibility towards employees, • Government legislation .

28. Broad Framework for Leadership Style There are many dimensions to leadership and many possible ways of describing leadership style, such as dictatorial, unitary, bureaucratic, benevolent, charismatic, con­sultative, participative and abdicatorial. The style of managerial leadership towards subordinate staff and the focus of power can therefore be considered within a simplified three-fold heading. • Authoritarian (autocratic) • Democratic • Laissez-faire (genuine)

29. Continuum of Leadership Behaviour One of the best-known works on leadership style is that by Tannenbaum and Schmidt. Originally written in 1958 and updated in 1973, their work suggests a continuum of possible leadership behaviour available to a manager and along which various styles of leadership may be placed. The continuum pre­sents a range of action related to the degree of authority used by the manager and to the area of freedom available to non-managers in arriving at decisions. The Tannenbaum and Schmidt continuum can be related to McGregor's supposition of Theory X and Theory Y. Boss-centred leadership is towards Theory X and subordinate-centred leadership is towards Theory Y

30. Continuum of Leadership Behaviour

31. Four Main Leadership Styles Moving along the continuum, the manager may be characterised according to the degree of control that is maintained. . Neither extreme of the continuum is absolute as there is always some limitation on authority and on freedom. The continuum pre­sents a range of action related to the degree of authority used by the manager and to the area of freedom available to non-managers in arriving at decisions. This approach can be seen as identifying four main styles of leadership by the manager: • tells • sells • consults • joins.

32. Styles of Leadership

33. Four Main Leadership Styles Tells. The manager identifies a problem, makes a decision and announces this to subordinates, expecting them to implement it without an opportunity for participation. Sells. The manager still makes a decision but recognises the possibility of some resistance from those faced with the decision and attempts to persuade sub­ordinates to accept it. . Consults. The manager identifies the problem but does not make a decision until the problem is presented to the group, and the manager has listened to the advice and solutions suggested by Joins. The manager defines the problem and the limits within which the decision must be made and then passes to the group, with the manager as a member, the right to make decisions.

34. Three Main Forces Tannenbaum and Schmidt suggest that there are three factors, or forces, of particu­lar importance in deciding what types of leadership are practicable and desirable. These are: • forces in the manager, • forces in the subordinate and • forces in the situation.

35. Forces in the Manager The manager's behaviour will be influenced by their personality, background, knowledge and experiences. These internal forces will include: • value-systems • confidence in subordinates • leadership inclinations • feelings of security in an uncertain situation.

36. Forces in the Subordinate Subordinates are influenced by many personality vari­ables and their individual set of expectations about their relationship with the manager. Characteristics of the subordinate are: • the strength of the need for independence • readiness to assume responsibility for decision-making • the degree of tolerance for ambiguity • interest in the problem and feelings as to its importance • understanding and identification with the goals of the organisation • necessary knowledge and experience to deal with the problem • the extent of learning to expect to share in decision-making

37. Forces in the Situation The manager's behaviour will be influenced by the general situation and environmental pressures. Characteristics in the situation include: • type of organisation • group effectiveness • nature of the problem • pressure of time.

38. Conclusion Tannenbaum and Schmidt conclude that successful leaders are keenly aware of those forces which are most relevant to their behaviour at a particular time. They are able to behave appropriately in terms of their understanding of themselves, the individuals and the group, the organisation, and environmental influences. Successful managers are both perceptive and flexible. Forces lying outside the organisation are also included. : The Tannenbaum and Schmidt continuum is probably the single most important and relevant study of leadership. Successful managers clearly need to be both consistent in personality and behaviour, yet adaptable to the three forces that continually influence their leadership style and decision-making along the various points of the continuum.