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Distinguishing the Concepts of Leadership and Strategic Management

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Leadership and management are both parts of the same process – namely enhancing the capacity of organizations and the people within them to better achieve their purpose. As such, they are closely tied to strategic mission and all the systems that support it, as the Center for Creative Leadership Handbook for Leadership Development explains: ”To be fully effective, a development system must be integrated with the organization’s other processes: management planning, performance management, job selection, reward and recognition systems, and even mistake systems. The confluence of these processes determines the relative effectiveness of any one development activity.”

When it comes to business, and achieving organizational goals, two key concepts that are frequently used are “Management” and “Leadership”. While there is (has and probably always will be) a debate about the differences and overlaps of leadership and management, current opinion is that they are different concepts, but they overlap considerably.

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Both concepts were distinguished by John Kotter (1988) when he opined that effective management carefully plans the goal of an organization, recruits the necessary staff, organizes them, and closely supervises them to make sure that the initial plan is executed properly. On the other hand, leadership goes beyond management of plans and tasks. The role of leadership is to envision the future and sets a new direction for a team or organization.

Management and the Function of Leadership

Management involves controlling a complex organization in order to achieve desired goals. It is a sum of organized activities by a group of people which involves decision making at various levels of organization for getting things done by others. Several experts have defined the term “Management”. Some of these definitions are given below:

“To manage is to forecast and plan, to organize, to co-ordinate and to control.” – Henry Fayol (1949)

“Management is a distinct process consisting of planning, organizing, activating and controlling to determine and accomplish the objectives by the use of people and resources.”- G.R. Terry

“Management is simply the process of decision making and control over the action of human beings for the express purpose of attaining pre-determined goals.”- Stanley Vance

Good management is concerned about administration and the proper and efficient use of resources. Managers become leaders when their personality and character, their knowledge and functional skills of leadership are recognised and accepted by the others involved. Fahol (1949) states the elements of management to be – planning, organizing, commanding, coordinating and controlling.

Planning

Planning is “to assess the future and make provision for it”. The plan of action – “the result envisaged, the line of action to be followed, the stages to go through, and the methods to use” – is at once the chief manifestation and most effective tool of planning. It is in taking the initiative for the plan of action that managers carry out the managerial function.

Organizing

To organize is to provide the undertaking “with everything useful to its functioning: raw materials, tools, capital, personnel”. Fayol (1949) divides organization into material and human organization and focuses on the latter. He then lists the managerial duties associated with organizing as:

  • Ensuring the plan is judiciously prepared and strictly carried out
  • Matching the resources to the plan
  • Leadership (“a single, competent energetic guiding authority”, “unity of command”, control, supervision)
  • Harmonising and coordinating activities
  • Decision making
  • Job analysis and design; staffing selection
  • Empowerment (encouraging a “liking for initiative and responsibility”)
  • Performance management – fair and appropriate remuneration; maintenance of discipline and sanctions against faults and errors; subordination of individual interests to the general interest
  • Fighting against excess regulations, red tape and paper control.

Command

The aim of command is to set the organization going. According to Fayol, one exercises command through a thorough knowledge of the personnel; elimination of the incompetent; balancing the interests of the organisation and its employees through a “strong sense of duty and of equity”; through good example; periodic audit of the organisation; well-developed organisational communication systems; delegation of tasks; and through adopting the principles of a learning.

Co-ordination

This means to harmonize all the activities of a concern so as to facilitate its working and its success to accord things and actions their rightful proportions, and to adapt means to ends. It is affected generally by combined action on the part of general management which supervises the whole, plus local managements whose efforts are directed towards the successful working of each particular part.

Control

Control means checking that everything occurs according to the plan adopted, the principles established and the instructions issued, taking appropriate corrective action, periodically checking for weaknesses, errors and deviations from the plan and checking that the plan is kept up to date. However, that a person is a great manager does not necessarily mean that they would be an exceptional leader, and vice versa. A clear distinction between management and leadership therefore becomes needful.. This would allow for a reciprocal relationship between leadership and management, implying that an effective manager should possess leadership skills, and an effective leader should demonstrate management skills. Hence, some of the differences are that:

  • A leader invents or innovates while a manager organizes.
  • A leader inspires trust, whereas a manager relies on control.
  • A leader tends towards analysis whereas a manager leans more execution.

According to John Adair (Ed. Neil Thomas), leadership has five distinctive features not found in management. A leader must:

  • Give direction
  • Provide inspiration
  • Build teams
  • Set an example
  • Be accepted.

Leadership: Definitions and Their Influence on Management

There is a plethora of definitions of leadership by several researchers and specialists in the subject area itself. According to Kouzes and Posner, Leadership is the art of mobilizing others to want to struggle for shared aspirations. Dubrin regards leadership as “The ability to inspire confidence and support among the people who are needed to achieve organisational goals” (DuBrin, 2013).

However, most definitions agree on similar themes about the concept of leadership, which can be simplified in “creating purpose, inspiring others, and achieving a common goal through influence and the proper management of people, resources and organizational goals”. The following is a checklist of different leadership skills and personal characteristics:

Leadership: Provides direction under uncertain conditions; has an intense ‘desire to succeed’ coupled with the perseverance and creativity to ensure success; has the ability to ‘fire up’ large audiences; communicates complex ideas in a simple and straightforward manner; is assertive; shows initiative; is driven to do an ‘outrageously’ good job.

Strategic thinking: Can deal with ideas at an abstract level; readily learns and understands concepts outside of his/her immediate functional area; has the ability to conceptualize ‘what could be’; uses one’s imagination in creating a vision that forms the basis for deciding on new concepts for which there is no data.

Innovation and creativity: Is perceptive, intuitive and creative. Sees more than the obvious when confronted with business situations and problems, rapidly identifying the implications; uses innovative approaches and leading-edge technologies in solving problems.

Risk taking and a ‘bias for action’: Is willing to take personal risks to advance new ideas and programs for the success of the company; has the courage to commit sizeable resources based on a blend of analysis and intuition; is comfortable with making the percentages, rather than achieving success with each initiative; trusts own judgement and instincts without requiring definitive proof; prefers quick and approximate actions to slow and precise approaches.

Decision-making: Has the ability to make difficult, unpopular choices in order to achieve larger strategic objectives; constantly gathers and analyses information from others; is open to influence and change; demonstrates confidence, strength of conviction and sound judgement.

Knowledge of field: Has a fundamental understanding of ideas techniques, leading edge supplied technologies, trends and discoveries (both inside and outside the company) that pertain to assigned work responsibilities; seeks out and quickly understands new developments.

Managerial proficiency: Has a set of well-honed ‘fundamental operating principles’ to help guide goal-setting, problem identification and decision-making; has the capacity to drive a negotiation to closing without compromising away one’s central requirements; understands complex operational issues quickly and takes appropriate action; executes well.

Resourcefulness: Adapts to rapidly changing conditions; learns from successes and failure; mediates differences; maintains a flexible and constructive orientation; buffers pressures received from others; demonstrates a high level of initiative, drive, persistence and involvement.

Maturity and stability: Has an accurate picture of strengths and areas for improvement; is willing to learn and improve; controls emotions; refrains from over-reacting.

Communications: Expresses ideas and concerns clearly and persuasively; is proficient and confident making formal presentations; participates easily and influentially in business meetings; has flexible and effective writing skills.

Interpersonal competence: Listens effectively; is sensitive to the needs of people; develops rapport and trust; gives criticism appropriately; solicits interpersonal feedback; is candid and direct in a constructive manner; accepts interpersonal differences.

In practice, managers accomplish organizational goals through the process of defining goals, organizing structures, motivating employees, and monitoring performance and outcomes. In performing these functions, a manager often takes up several roles, and the most important of them is leadership. One can therefore infer that leadership is the means to the end goals of management.

Understanding Leadership Styles

Leadership style refers to how leaders exercise their authority in a team and ensure that organizational objectives are achieved. It covers how leaders plan and organize work in their area of responsibility and, how they relate to, and deal with their colleagues and team members. The key components of leadership style are attitudes and behaviors, including what a leader says; how they say it; the example they set; their body language; and their general conduct and demeanor.

Leadership Styles

Authoritarian Leadership: characterized by individual control over all decisions and little input from group members. allow a leader to impose expectations and define outcomes. It can turn out to be successful in situations when a leader is the most knowledgeable in the team. Although this is an efficient strategy in time-constrained periods, creativity will be sacrificed since input from the team is limited. It is also used when team members need clear guidelines. It can however lead to employee rebellion, kill employee creativity and innovation, reduce group synergy & collaboration and dramatically reduce group input.

The Laissez-Faire (Delegative) Leadership: This a style in which leaders delegate decision making to group members. This can be a successful strategy if team members are competent, take responsibility and prefer engaging in individual work. While this style of leadership creates a positive work environment, disagreements among the members may split and divide a group, especially as the command responsibility of leadership is not usually well defined here; leading to poor motivation and low morale.

Democratic/Participative Leadership: This is a style where inputs from team members and peers are considered and valued. Everyone in the team are encouraged in exchanging their ideas. The essence is to involve team members in the decision making process. Team members thus feel included, engaged and motivated to contribute. The leader will normally have the last word in the decision-making processes. However, if there are disagreements within a group, it can be a time-consuming process to reach a consensus. However, the responsibility of final decision-making is with the leader. High level of productivity can be achieved with this style, although decision-making processes become time-consuming and poor decisions can be made if the employees are unskilled.

Transactional Leadership: This leadership style focuses on a specific task and based on the performance results, leader provides awards and punishments to motivate team members. These leaders are good at setting expectations and standards that maximize the efficiency and productivity of an organization. Research has found that transactional leadership tends to be most effective in situations where problems are simple and clearly defined. Employee motivation and productivity is increased but it creates more followers than leaders among employees.

Transformational Leadership: This leadership style depends on high levels of communication from management to meet goals. Leaders motivate employees and enhance productivity and efficiency through communication and high visibility. It enhances the motivation, morale and performance of followers through a variety of mechanisms like, being a role model to his followers to inspire them, understanding strengths and weaknesses of followers. However, consistent motivation and constant feedback may be required, and it may sometimes lead to the deviation of protocols and regulations. The key to successful leadership is achieving an appropriate balance between knowledge-exchange, action and reflection, and alignment between the needs and wants of the individual and those of the organization. The Global Leadership and Organizational Behavior Effectiveness (GLOBE) project, found six attributes that were universally seen as undesirable or impediments to outstanding leadership (Den Hartog et al., 1999). These attributes are:

  • being ruthless,
  • asocial (self-centered),
  • irritable (malevolent),
  • loner (self-centered),
  • egocentric,
  • non-explicit (face-saver),
  • non-cooperative (malevolent), and
  • dictatorial(autocratic).

The general believe however is that there is no one leadership style that suits all organizational situations and thus, a great manager employs the appropriate leadership style that is effective and brings the most rewards per time.

Performance Management and Appraisal

Performance management is “…a systematic process for improving organizational performance by developing the performance of individuals and teams… a means of getting better results by understanding and managing performance within an agreed framework of planned goals, standards and competency requirements.’ (Armstrong, M.,2006). It is strategic as well as operational, as its aim is to ensure that employees contribute positively to business objectives. Ideally, performance should be managed holistically, throughout the range of HR activities and processes.

For most organizations, performance reviews are used to support decisions related to training and career development, compensation, transfers, promotions, and reductions-in-force or employment termination. Generally, the performance review process includes setting clear and specific performance expectations for each employee and providing periodic informal and/or formal feedback about employee performance relative to those stated goals.

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