1.4.7 Leadership

Leadership

Key Definitions

Leadership: The way that staff are managed and inspired in order to achieve demanding goals.

Autocratic Leader: A manager that keeps most of the authority to themselves, tending to tell employees what to do and how to do it.

Charismatic Leadership: Leadership that comes from someone who is able to connect with their workers and is able to get someone to buy into their ideas. 

Democratic Leader: A manager that takes the views of their employees into consideration and discusses with them what needs to be done. 

Laissez-Faire: A more 'hands-off' approach to management, in which managers take a step back and let employees do the work their own way.

Paternalistic Leader: A manager that thinks they know what is best for their employees, and they concern about the social needs of their employees, despite tending to tell them what to do. 

Hubris: The excessive pride that can lead to the manager being blind to the risks that are being taken within the business. 

Nemesis: The divine punishment given as the 'fall' after excessive pride.

Leaders and Managers

A leader is not the same thing as a manager. An effective manager is someone who can put an idea or policy into action, and get the details right in the process. An effective leader is someone who can identify the key issues facing the business, set new objectives for the business, and decide what should be done and how and who should do it. The main differences between a leader and a manager are highlighted below:

1. The Job Role

Leaders have to constantly be looking ahead to see new threats and opportunities for the business - meaning that managers and leaders work on different timescales. Another difference is the fact that the manager will work under tight resource constraints, but a leader is able to find whatever they need. 

2. The Person

Leaders need to have steely qualities when needed, whereas a manager may be able to avoid the need for these. A manager is also needs to have natural charisma, whereas a leader doesn't as they have other qualities that make people want to follow them. 

Types of Leadership Style

Autocratic Managers

These are authoritarian managers that tell employees what to do, and they do not listen much to what the workers themselves have to say. Autocratic managers know what they want to have done and how they want to have it done. They tend to use one-way communication systems with their workers from the top of the hierarchy downwards. They give orders to their workers, they do not want feedback from them. 

Democratic Managers

These are managers that involve their workers in the decisions they make. They listen to their employees' ideas and they ensure that the employees contribute to the discussions. Communication by democratic managers is two-way. A good democratic manager would regularly delegate decision-making power to their junior staff in one of 2 possible ways:

1. Management by Objectives

The leader agrees clear goals with their staff, provides the necessary resources and allows day-to-day decisions to be made by the staff in question. 

2. Laissez-Faire 

Managers do not take the time to ensure that the junior staff know what to do and/or how to do it. Some respond well to this, others don't and become frustrated. 

Paternalistic Managers

These are the managers that think and act like a father, trying to do what is best for their staff. There may be consultation to find out the opinions of the employees, but decisions are made by the managers. These managers believe employees need directing in their work, but think it is important that they are also cared for and supported. They are interested in the security and social needs of staff, wanting to know how the workers feel and whether they are happy in their work. 

McGregor's Theory X and Y

In the 1950's Douglas McGregor undertook a survey of managers in America and identified two main styles of management which he labelled 'Theory X' and 'Theory X'. 

'Theory X' managers tend to distrust their employees, believing they do not really enjoy their work so they need to be controlled by the management. This approach is likely to be a more self-fulfilling approach, as if you believe people are lazy they will tend to stop trying, and if you believe workers dislike responsibility they will likely stop showing interest in their work - especially if you do not give them the chance to develop themselves and their skills. 

'Theory Y' managers, on the other hand, believe that workers do enjoy work and they want to contribute their ideas and effort. Managers in this approach would adopt a more democratic leadership style, as their natural approach to working would be to delegate authority to meet specific objectives within the business. 

Charismatic Leadership

Charismatic leadership comes from having a leader who is able to connect with an audience and persuade people to buy into an idea. These leaders create an impact with their workers by setting optimistic goals, and through the use of analogies, rhetorical questions, and by contrasting 'right' and 'wrong' in their speeches. 

Charisma is not always a good thing, as the combination of charisma and early success as a leader can result in too much praise and not enough friendly criticism. This can create a hubris, and eventually this can lead to a great downfall - as seen with the Royal Bank of Scotland during the 2008 recession. 

What is the Best Style of Leadership?

Each style of leadership can work well in different situations. If there is a crisis people often look toward a strong leader to tell them what to do. The boss would need to take control quickly and put a plan into action, which means an autocratic style would work well in this situation. In a stable situation, where the employees are highly trained and able to do their work efficiently and successfully a more democratic leadership style would be more efficient. 

There are many factors involved when deciding which leadership style is the best, such as the personalities and abilities of the leader and workers, and the nature of the task. If staff are well-trained and capable, the leader would be able to consult with the workers to find a solution to a difficult problem, meaning a democratic leadership style is suitable. If the staff are largely part-time and temporary, an autocratic leadership style is the only really valid option. 

Leadership style should, therefore, change according to the situation and the people involved. It will also vary with the time and degree of risk involved. If a decision has to be made urgently and is of high risk the leader is likely to be more autocratic. If there is more time for discussion then the leadership style is more likely to be more democratic.