OLC EUROPE
HND BUSINESS
LEADERSHIP
AIM AND OBJECTIVES
AIM
To analyse theories of motivation and management practices

OBJECTIVES

Upon completion learners should be able to
i.
ii.
iii.
iv.
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
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
INTRODUCTION
i.
There are different ways for managers to go about securing the cooperation and controlled performance of the staff
ii.
Some managers order people about; others try to persuade them ;
others encourage them to make their own decisions
iii.
So are these different types of managers , or different approaches or
styles that a manager can adopt
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
What is Leadership?

There are many ways of looking at leadership, and many interpretations
of leadership

I.
Buchanan and Huczynski defined 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
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

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
Differences Between Leadership and Management
Management

According to Miller, et al
Leadership

management involves using
focuses on getting things done
human, equipment, and
through people.
information resources to achieve

various objectives.

On the other hand, leadership
Management function include
planning and budgeting,
organising and staffing, coordinating , Controlling
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
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
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
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.
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.
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
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’
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)
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:
1.
Reward Power (perception of ability to reward compliance)
2.
Coercive Power (fear based on perception of ability to punish)
3.
Legitimate Power (Perception of right to exercise influence)
4.
Reference Power (Identification with the leader’s charisma)
5.
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.
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:
1.
Personal Power (supported and trusted by their colleagues
and subordinates)
2.
Connection Power (which results from personal and
professional access to key people and information.
Yuki suggests that a further relevant source of power is:
1.
Control over information
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
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’
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
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
Action-Centred Leadership
Task Needs
•
•
•
•
•
Team Maintenance Needs
Achieving work group objectives
Defining Group Tasks
Planning the Work
Allocation of Resources
Organisation of duties &
responsibilities
• Quality control and performance
checking
• Reviewing progress
• Maintaining moral and building team
spirit
• The cohesiveness of the group as a
working unit
• Setting standards and maintaining
discipline
• Systems of communication within the
group
• Training the group
• Appointment of sub leaders
Individual Needs
•
Meeting the needs of the individual members of the group
• Attending to personal problems
• Giving Praise and Status
•Reconciling conflicts between group needs and needs of the individual
•Training the individual
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
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.
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
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
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)
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
Continuum of Leadership Behaviour
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.
Styles of Leadership
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.
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.
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.
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
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.
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.