IB Business Management HUMAN RESOURCES 2.3 Leadership and Management

The art of motivating a group of people towards achieving a common objective
4 Leadership (or Management) styles
1. Autocratic (authoritarian)
2. Democratic
3. Laissez-faire
4. Situational leadership
Autocratic leadership
A style of leadership that keeps all decision-making at the centre of the organisation
Laissez-faire leadership
A leadership style that leaves much of the business decision-making to the workforce – a ‘hands off’ approach and the reverse of the autocratic style
Situational leadership
Effective leadership varies with the *task* in hand and situational leaders adapt their leadership style to each situation
Main features of an *Autocratic* leadership style:
1. Leader takes all decisions
2.Gives little information to staff
3. Supervises workers closely
4. Only *one-way communication*
5. Workers only given limited information about the business
Main features of a *Democratic* leadership style:
1. *Participation* encouraged
2. *Two-way communication* used, which allows feedback from staff
3. Workers given information about the business to allow full staff involvement
Main features of a *Laissez-Faire* leadership style:
1. Managers delegate virtually all authority and decision-making powers.
2. Very *broad criteria or limits* might be established for the staff to work within.
Main features of a *Situational* leadership style:
1. Style of leadership used will depend on the nature of the task and the work group’s skills and willingness to accept responsibility.
Main *drawbacks* of an *Autocratic* leadership style:
1. Demotivates staff who want to contribute and accept responsibility
2. Decisions do not benefit from staff input
Main *drawbacks* of a *Democratic* leadership style:
1. Consultation with staff can be time consuming
2. On occasions, quick decision-making will be required
3. Level of involvement: some issues might be too sensitive; e.g., job losses, or too secret, e.g. development of new products
Main *drawbacks* of a *Laissez-fair* leadership style:
1. Workers may not appreciate the lack of structure and direction in their work – this could lead to loss of security
2. Lack of feedback – as managers will not be closely monitoring progress – may be demotivating
*Paternalistic* managers and leaders
Treat their employees as if they were family members by guiding them through a consultation process and acting in the best interest of their subordinates.
Possible *applications* of an *Autocratic* leadership style:
1. Defence forces and police where quick decisions are needed and the scope for ‘discussion’ may be limited.
2. In *times of crisis* when *decisive action* might be needed to limit damage to the business or danger to others
Possible *applications* of a *Democratic* leadership style:
1. Most likely to be used in businesses that expect workers to contribute fully to the production and decision-making processes, thereby satisfying their higher-order needs
2. An experienced and flexible workforce will be likely to benefit most from this style
3. In situations that demand a new way of thinking or a new solution, the staff input can be very valuable
Possible *applications* of a *Laissez-Faire* leadership style:
1. When managers are too busy to intervene
2. May be appropriate in research institutions where experts are more likely to arrive at solutions when not constrained by narrow rules or management controls
Possible *applications* of a *Situational* leadership style:
1. By allowing flexibility of leadership style, different leadership approaches can be used in different situations and with different groups of people
What is the *’best’* or *’most appropriate’* leadership style?
There isn’t one! This will depend on the *nature of the task* being performed, the *importance* of it and the *skills and experiences* of the workers being led.
Contingency Theory
A leadership model that suggests the ‘best’ leadership style depends on a *range of interconnected factors*. No single style suits all firms and all employees all of the time.
*Trait* theory
Suggests that leadership and management styles depend on *personal characteristics* (traits) of the individuals.
*Factors* influencing management and leadership *styles*:
1. Organisational *culture*
2. *Attitudes* of senior managers
3. *Traits* of managers
4. *Subordinates* – how many? temperament? experience?
5. The *task* itself
6. *Time* constraints
Responsible for setting *objectives*, organising *resources* and *motivating* staff so that the *organisation’s aims are met*.
Key *functions of management*:
1. Setting objectives and planning
2. Organising resources to meet objectives
3. Directing and motivating staff
4. Coordinating activities
5. Controlling and measuring performance against targets
Key *differences* between *management* and *leadership*
1. Time and devotion
2. Roles and responsibilities
3. Influence on others
4. Risk-taking
5. Vision
*Peter Drucker’s* five tasks of management:
1. Sets objectives
2. Organises
3. Motivates and communicates
4. Measures
5. Develops people
Management By Objectives (MBO)
Managers and workers set objectives and have autonomy in how they plan to achieve these. There are 5 steps:
1. *Review*
2. *Set*
3. *Monitor*
4. *Evaluate*
5. *Reward*