2.3 Leadership and management

Full video class on YouTube, summary and notes on Instagram, class extracts on TikTok, text below. Have fun!

The main point of this class is to understand the difference between leadership and management and learn 5 leadership styles. There's also a surprise for Higher Level students in the end.

Management is the process of dealing with or controlling people and making sure tasks are accomplished. “Management” can also refer to a group of people in an organisation who are in charge of the aforementioned things. Simply speaking, management means getting things done. We already learnt that there are different levels of management in organisations in 1.3 (tap the link to review).

There are many ways to describe functions of management and managers but I’m going to refer to the three most commonly quoted scholars to describe management functions: Charles Handy, Henri Fayol, Peter Drucker.

Attentive students will recall that we already mentioned Charles Handy in 2.2, so I’ll just remind briefly that he is an Irish philosopher who specialises in organisational behaviour. From Handy’s perspective, managers perform three functions:

1. General Practitioners (GP). GP is the same as therapist or general doctor in the hospital. This is the first doctor you talk to when you are sick and don’t know the reason for your sickness. GP might not have deep specialised knowledge in certain areas of medicine but the scope of their knowledge is wide, which means they know a little bit about everything. Same thing with managers. They are not workers who actually do the work, their job is to make sure things get done, and they know enough about all the processes in the organisations, even though their knowledge might not be as specialised as that of specialised workers.

2. Confronters of dilemmas. If you know what a dilemma is (perhaps from your TOK class), you will understand that managers deal with them all the time… Very often there is no “best” solution in all aspects, and most decisions imply certain compromises and/or sacrifices. For example, a manager might need to decide whether to save costs by ordering supplies from a cheap yet non-eco-friendly supplier that might damage company’s reputation, or increase the costs by ordering supplies from an eco-friendly supplier that might have a positive impact on the company’s reputation. This kind of dilemmas is what managers constantly deal with.

3. Balancers of cultural mixes. Culture can refer to either national culture (Chinese, Indian, Asian, Western, etc.) or organisational culture (task, role, tough guy macho, masculine/feminine, etc.). Regardless of the kind of culture, there are people and groups of people who have very different cultural backgrounds. Either their national culture does not accept things that are accepted in other cultures, or the organisation where they worked before had a different way of getting things done. Thus, in any organisation there is a number of cultural mixes that might clash if they are not well-balanced and respected. Whose job is it to balance these cultural mixes and avoiding cultural clash? Correct, managers’.

Henri Fayol was actually a mining engineer who developed a theory of business administration that is used up to now. His name is pronounced as “an-ri”, not “Henry”. His approach to management functions is my personal favourite! So, Fayol believed that there are five management functions:

1. Planning is the process of creating arrangements and preparations for the future that might include setting objectives and allocating budgets. Without planning, management is not really management.

2. Commanding refers to giving orders. It is another essential management function that is related to delegation that we discussed in the previous class.

3. Controlling refers to making sure job gets done by subordinates. It does not mean standing behind the employees’ backs all day, but it means that there is a way to make sure tasks get accomplished. In most schools, one of the main ways to control teachers (and thus maintaining teaching standards) is class observations that are performed by the Head Teacher.

4. Coordinating means making sure the organisation works as one whole. From the very first class you hopefully remember that there are four business functions and that organisations break down the organisation into functional departments. It is very good idea unless these functional departments become too independent from each other and do not coordinate each other’s actions. Ideally, all departments should be interdependent and it is a manager’s job to coordinate all the employees in pursue of interdependence.

5. Organising refers to allocating resources and time that are necessary to accomplish tasks. “Here’s wood, nails, tools, and wood polish. By Sunday, please make two tables” — this is a simplified example of organising in a furniture shop.

Peter Drucker is the super cool Austrian-American scholar who, among many other things, developed the SMART rule for objectives, that we have already learnt in 1.3. He believed managers do the following:

1. Setting organisational objectives.
2. Organising tasks and people.
3. Communicating with & motivating people.
4. Measuring performance.
5. Developing people.

I decided to be a General Practitioner about Peter Drucker’s theory and I have not elaborated on any of the above because they are quite self-explanatory, in my opinion. Those of you who want to dig deeper may read Peter Drucker’s Management: Tasks, Responsibilities, Practices (1974) and become the boss of management functions.

Enough with management, let’s talk about leadership now. Leadership is the process of leading people. I really do not like definitions where the term is described using the term itself but I could not create a better definition. Anyway, leaders have followers who follow them not because they were appointed to follow them, not because it is their job to follow a leader, but because they naturally admire the leader and want to be led by him/her.

Leader is not an official position in the hierarchy, unlike manager. Very often, real leaders in organisations are not necessarily managers at all. Think about your classmates. I’m quite sure in your class there is a very cool guy who everyone wants to be friends with but who is not necessarily a good student. Very often, these cool guys are actually a bit rebellious trouble-makers, from teachers’ perspective. And yet they are considered cool and admired by peers. Same thing with leaders. They have followers, but they do not necessarily have a management role. If a manager is a leader then this is just perfect. However, this is not always the case.

And lastly, with regards to leadership, one thing I learnt in my alma mater (hi to University of Bath!) is that in some cultures “leader” is a word that is used to describe a good manager. That could be a really interesting discussion, actually… Do you personally agree that leaders are good managers? Or do you think that a good manager is still a manager? How do you think leadership and management are (un)related? Let me know what you think in the comments below!

In the end of this part of class, I would like to remind everyone that Business Management is a subject in Group 3, that is called “Individuals and Societies” (Humanities, in other words). This means that there is no absolute truth and literally everything is open for doubts and discussions. That is the beauty of Humanities, isn’t it? Having said that, I would like to summarise the main differences between leadership and management in the table below and remind you that you do not have to agree with them. What matters here, is how you justify your opinion.

The IB wants you to be able to evaluate 5 leadership styles: autocratic, paternalistic, democratic, laissez-faire, situational. “Evaluate” means not only to understand what these leadership styles are, but also to assess them and show some judgement with regards to them. In order to help you with that, I will explain what these 5 leadership styles are and provide some of their advantages and disadvantages. As always, these advantages and disadvantages are not prescriptive. It might be a good idea if you guys makes notes using this table:

Autocratic leadership style means that leader makes all the decisions and delegates tasks, but not responsibility. Formula of this leadership would be: “do X”. Autocratic leadership doesn’t mean that it’s bad leadership or that autocratic leader treats his/her subordinates badly. It just means that decision-making is really centralised. On the one hand, autocratic leadership implies quick decision-making and it is suitable for crisis-management. On the other hand, the stakes are really high because decision-making is not spread across the organisation, so if the decision is bad, then the entire organisation is jeopardised. In addition, autocratic leadership is quite inflexible and demotivating for employees who like showing initiative and being part of the decision-making process. Steve Jobs is argued to be an example of an autocratic leader.

Paternalistic leadership style means that leader expresses superiority and treats subordinates as if they are family members, guiding & mentoring them in order to promote their own good. Paternalistic leaders usually “know what’s good for you”, just like parents. And of course, very often, what paternalistic leaders think is “good for you” is not necessarily what you think is good for you. Formula of this leadership is: “I know what’s good for you”. On the one hand, this leadership style is suitable for inexperienced employees who are at the start of their careers. In their case, when they really don’t really know what they want, what’s good and what’s bad, it’s very nice to be paternalised by a more experienced mentor for a while. On the other hand, employees’ interests might be neglected (as I mentioned earlier) and this leadership is not suitable for experienced employees.

Democratic leadership style means that leader involves employees in decision-making before making the decision. In my experience, the two most common misconceptions that students have are the idea that all democratic leaders are good and the idea that democratic leaders always make decisions based on the majority of votes. In reality, democratic leader, same as any other kind of leader, can be either good or bad. The main feature of a democratic leader is that he/she makes subordinates participate in decision-making. It is up to the leader, however, whether to listen to majority or not. Once again, employees’ participation in the decision-making process is the main feature of democratic leadership. Formula is: “what do you think is best: X or Y?” On the one hand, democratic leadership is usually motivating and engaging, serves the best interests of employees. However, decision-making might be slow, might result in loss of control, and this leadership is not always applicable (for example, in some cultures it is perceived as weakness; in addition, it might not be suitable for crisis management, when quick decisions and quick implementation are important).

Laissez-faire leadership style means that leader has minimal interference with the work of subordinates. Employees are, in a way, on their own and are free to do work the way want as long as it’s done and as long as it’s done before the deadline and meets the standards. Engineers/programmers/developers in IT companies usually work under laissez-faire leadership. They usually don’t have to come to the office, there’s no clock-in/clock-out, only the final product and deadlines matter. Formula of laissez-faire leadership is: “do X or Y as you see fit”. On the one hand, this leadership style motivates employees, builds trusts among managers and subordinates, and it is completely applicable to skilful professionals. However, it is inapplicable to inexperienced employees, it might result in chaos and lack of authority if it’s “too laissez-faire”.

Situational leadership style means that leader chooses the most appropriate leadership style in the given situation. Different employees might require different approaches, or external environment might dictate the choice of leadership style, or organisational objectives might push the leaders towards different kinds of leadership. Formula is: “if X then Y, if A then B”. On the one hand, situational leadership is the most flexible of all, it is in line with employees’ interests and needs. However, it might be unstable and difficult to predict, which might confuse employees as it is difficult to plan in an environment that’s constantly changing.

In reality, most leaders are situational but one or some leadership styles usually prevail.

Scientific management is an approach to management that is based on analysis of data. Scientific management is based on scientific thinking that prioritises rationality, methodical and systematic problem-solving and decision-making. This approach is more quantitative because it is based on analysing objective hard data (numbers). Scientific management may disregard people’s emotions for the sake of rationality. For example, if a company makes hiring decisions based on psychometric tests, that would be an example of scientific thinking/management. Scientific management is a theory that was originally developed by Frederick Taylor (follow the link to learn more about him or wait until the next class (2.4) when we’ll get back to Taylor and discuss his theory in more detail).

Intuitive management is an approach to management that is based on instinct, intuition and gut feeling. Intuitive management is based on intuitive thinking that prioritises emotions, empathy, unsystematic and irrational problem-solving and decision-making. This approach is more qualitative because it is based on emotional and qualitative data (feelings, that are hard to turn into numbers). Intuitive management may disregard objective data for the sake of emotional happiness. For example, if an employee gets promoted based on politics as opposed to his/her contribution to the company, that would be an example of intuitive thinking/management. One of the advocates of intuitive thinking is Richard Branson who once said “I can tell you that when I have to decide whether or not to go ahead with a new venture, I have often found that intuition is my best guide.” Make sure you know who Richard Branson is. It’s an important name for the world of business.

As always, one approach is not better than the other, they are just different. In reality, managers/leaders make intuitive decisions based on data, i.e. they combine scientific and intuitive management and thinking.

Even though I have explained the features of scientific and intuitive management above, it might be a good idea to fill in the table below:

Make sure you can define all of these:

1. Management
2. Charles Handy
3. General practitioners (GP)
4. Confronters of dilemmas
5. Balancers of cultural mixes
6. Henri Fayol
7. Planning
8. Commanding
9. Controlling
10. Coordinating
11. Organising
12. Peter Drucker
13. Leadership
14. Autocratic
15. Paternalistic
16. Democratic
17. Laissez-faire
18. Situational
19. Scientific management [HL]
20. Intuitive management [HL]