Question

QUESTION 1 (60) Much debate exists within the literature about leadership and management. Kotter (1990:103) argues that management and leadership are “two distinctive and complementary systems of action” and that the former involves coping with complexity, while the latter involves coping with change.

1.1 Discuss in detail, with the use of examples, the fundamental differences between the concept of leadership versus management. (20)

1.2 Evaluate in detail, with the use of practical examples, the advantages and disadvantages of a transformational leader. (20)

1.3 Discuss in detail, with the use of practical examples, FOUR (4) management styles and the potential impact each style may have on a business. (20)

Answer 1

Management and Leadership are two different subjects and processes to understand and motivate the situation to achieve organizational goals. Kotter in his book "Leading Change" explained the true meaning of Management and Leadership. There are separate processes and objectives of both the terms that we are going to understand in the below points,

a. Management: Management refers to processes and functions that are used to deal with and control the people and things in the organization.  Basically, Management is a set of various processes such as planning, controlling, budgeting, risk managing, control staffing, performance measure and problem-solving and help the organization with the best methods of how to use these functions in the organization to achieve what is the requirement. Management is a tough process and it needs a theoretical and practical approach to manage people and processes. It is very crucial and complex than leadership. Managers need power and title to fulfill their work objectives.

b. Leadership: In short, leadership is to lead people or groups of people and leaders should have followers. Leadership is a vision when we talk about the main criteria of leadership. Leadership is to provide direction, set goals and preparing strategies to achieve those goals in a broader way. Leadership is not about forcing the people like management to do the things but leadership follows an inspirational and motivational method to make people attract towards his vision. Leaders do not need the title and power to lead or motivate people but they have the personality that attracts people to fulfilling their vision.

Kotter believed that these two terms are not similar in functions. We will discuss the fundamental differences between the Management and Leadership in below points,

a. Vision Establishment: Managers follow different functions to establish their vision for their employees. These functions include, make plans and preparation of budgets, development of processes, steps, the setting of timelines, etc. Basically manager role is to force employees towards vision and goal achievement.

Leaders follow completely different strategies to create a vision in the mind of his followers, such as, set direction, develop strategic plans and showing a very passionate attitude towards vision establishment.

b. Human Development process: In this process, managers follow predefined rules to hire a team, train them and make them work to achieve organizational goals. Leaders will have different strategies that include, align people, inspire/motivate them, communicate the vision and look for commitment.

c. Vision Execution: This is an important step that consumes lot of time for managers and leaders both. For any project or task, there would be so many hurdles that are solved by managers and leaders in different ways. Managers will be responsible to control the processes and solving the issues if they identify any problems with the pre-decided approaches and monitor results. But leaders will use motivation and inspiration strategies to energies employees and overcome barriers.  

d. Vision Outcome: The manager's job is to give orders and be consistent in their job, but leaders look for change and movement as per the strategies made by them.

Answer 1.2

Transformational Leadership: Transformational leadership is a modern theory of leadership. In transformational leadership, leaders sit and discuss with the team to identify the issues and discuss the needed changes, and execute those changes in the processes to achieve organizational goals. These leaders are called visionary, inspired, risk-takers and thoughtful in the organization.

Advantages of Transformational Leadership:

a. Encourage change when needed: Change is very essential for any business processes that are outdated and organization finding it difficult in its practical approach in solving organizational issues.  Companies should adopt changes to solve organizational issues and finding alternative solutions for those issues. Transformational leadership is important to bring those changes in the organization due to its ability to motivate and inspire the team and the team is also supportive of transformational leaders.

b. Provide enthusiasm: Transformational Leadership is important to create enthusiasm in the team that helps in innovation and positive changes in the organization. When the employee and teamwork due to self-motivation, it helps in increasing efficiency and productivity.

c. Reduction in turnover cost: High turnover cost is not helpful in the organization and it helps in increasing process time that reduces productivity. But transformational leadership is helpful in reducing turnover cost because leaders can motivate and inspire the employees that help employees to give their 100% in the processes.

Disadvantages:

a. Creates detail challenge: Transformational leaders believe in changes in the process that are not helping the organizational issue, but these changes create issues as details are needed to implement these changes in the organization. These leaders would need support from the experts and organized people to implement these changes.

b. Time-consuming: Transformational leadership could be a time-consuming process as it takes time to motivate and inspire employees towards some goals and they need continuous communication by leaders. It is not useful for the long-term process. When the organization needs to take a decision quickly, this leadership style creates issues.

c. Create pressures on team-member: Although the team member is supportive of the transformational leaders and they are also motivated and inspired but it can create pressure on team members due to new processes and changes implemented in the organization. The accountability to achieve the goals would be on each and everyone shoulder due to that some employees could find these processes too tough to handle.  

Answer 1.3:

Management style and their impact on the business:

We will discuss four management style and their impact on the business in the below points,

a. Visionary Management Style: Visionary Management style is also called a transformational, inspirational management style. Managers follow this style will not involve in day to day processes and detailing, instead, they will motivate and inspire their team from time to time in such a way that the team will try to give their 100% in their work into the processes and solving the issues. The team will handle all details about all the work done by them on a regular basis. But this leadership will be challenging for an introvert and are not self-motivated.

The disadvantage of this style is that not involving in day to day processes can create issues and problems if the team is ones.

For example, Nelson Mandela was having visionary management style due to that he was so successful to lead the South-Africa.

b. Transactional Management Style: Transactional management style basically motivates its employees by giving rewards or punishment. For rewards such as bonuses and stock options are available.

In this type of leadership, employees work towards achieving organizational goals due to the reason that they will get rewards to the end of the work.

This style is work for short term as employees will get pressure so the management cannot motivate employee giving rewards every time. It is also not suitable for promoting creativity and innovation in the process.

c. Directive Management Style: This management style is also referred to as Authoritarian or autocratic management style. These managers have strong authority and have full decision-making power and don't believe

in disobeying by employees. This management style follows directions and closely monitors the employees. The manager will be positioned in the center of the organization structure. This style is not effective for the long term as employees can't afford work pressure for a long time. They need motivation and rewards to work with self-motivation. It is not effective in a crisis situation in the organization. This style of management will make employees frustrated and unresponsive after some time.

For Example, Bill Gates has a directive management style, he had a clear plan for Microsoft and each and every employee was following his plans towards organizational goals.

When the management is in the situation of the quick decision-making process, this management style is very useful and the decision making power will be with some people and everyone has to follow their plans.

d. Democratic Management Style: The democratic management style also called consensus, collaborative or consultative style. These types of managers believe in idea sharing and get regular employee's participation. Managers believe that employees could be motivated by sharing ideas, get their opinions, giving them suggestions and provide them solutions in the issues they are facing. In this style, the final decision-making authority will be the manager but he will seek opinions, ideas, and solutions from his employees. In this style, the employee feels valued in the organization and try to give his most contribution towards achieving organizational goals.

The disadvantage of this style is that it takes time due to the long process involving of discussion with employees and getting their suggestions. If the manager is in a hurry to make a decision quickly, this style will not be useful. The other issue in this style that it creates favoritism between manager and team. The manager could consider the ideas or suggestions of his favorite employees.