Leadership And Management Theory And Practical Application Management Essay

As the world of business changes, so do the theories in the management and leadership. For example, if just a 5 decades ago, the major focus when running the company, was on the management, today the situation is drastically different (Lawler, 2006).

Today, the leadership has taken a greater role in the process of running a company, and the management theory has undergone a tremendous evolution, giving the rise to the human relations movement (Lawler, 2006). While the new management theories have been gaining the popularity, the review below will show that, the scientific management has not lost its importance.

The debate over which one is more important for a company, the management or the leadership, has been a controversial topic for decades. According to the theories currently discussed in the academic and professional circles, it seems that the opinions are divided. However, all sides seem to agree that both, leadership and management are important aspects in the process of running a company (Lawler, 2006). More on this topic will be discussed in the later chapters.

At this point it has to be noted that, the leadership and management, both have their unique functions, methods of development and application, and most importantly, have their advantages and disadvantages (McGovern, 2002 ). Furthermore, which one is more exercised and applied in a company is highly dependent on the culture, history, tradition, education, and the business philosophy. In order to better understand the importance and roles the leadership and management play, three countries’ prospective will be discussed below: US, Germany, and China.

Theory of leadership and theory of management

What is leadership? While the definitions vary, it seems that there is a consensus that, regardless of the leadership theory employed, leaders provide visions, goals, and get people united behind a shared idea, values, and believes. Theories of leadership are multiple; trait theory, functional theory, transactional theory, transformational theory, path-goal theory, and many more (Van Vugt, 2011). However, whatever the theory, there are common aspects that all of them share, and that is, success of a group is a result of two factors:

Leadership style.

Situational favorability.

The leadership style depends on the multiple factors such as: ethnicity, culture, social background, education, experience, and character (Van Vugt, 2011). Regardless of these factors, it seems the leadership approaches have been segregated in to two broad groups: relationship oriented, and task oriented. In the first case, the relationship oriented, the leaders tend to focus on the people, and try to communicate the vision based on the relationship, personalities, and values (Van Vugt, 2011). In the second case, the task oriented, the leaders try to unite people behind a task or a goal they are attempting to accomplish.

The situational factors depend on: leader-follower relations, task structure, and the position power. Among them, the most notable ones are the first and the third aspects. First is the relationship a leader has with the followers, and the third one is the amount and the formal of power a leader has, and how he chooses to exercise it in leading an organization (Van Vugt, 2011).

What is management? According to a classic definition, management is an act of organizing and planning of the human and material resources in order to accomplish the desired plans and objectives (Kaufman, Beaumont, & Helfgott, 2003). Furthermore, management is involved in the organizing, planning, budgeting, directing, and controlling of these resources in order for the goals and objectives to be fulfilled effectively and efficiently.

The management theories are numerous, but they all seem to follow the principles provided in the two dominant theories in management, the scientific management theory, and the human relations theory.

The scientific management theory, also called Taylorism, is a theory which focuses on analyzing and synthesizing the work flows. The primary goal of the theory is to accomplish the superior economic efficiency, especially when it comes to the labor productivity (Kaufman, Beaumont, & Helfgott, 2003).

The human relations movement is a theory which views the organizations in the psychological prism rather than the “mechanical parts” prism. Thus, it focuses on the social relations, motivation, and the employee satisfaction (Kaufman, Beaumont, & Helfgott, 2003).

Discussion

Management and leadership; comparative analysis

The argument that leadership is more important than management is, or vise versa, has not been settled. Some argue for one, and the others highlight the importance of the other. However, they all agree that the leaders and managers provide a valuable contribution to the organizations (Lunenburg, 2011).

The first one to take a stand on the roles of the leadership and management was Abraham Zaleznik, in 1977 in the Harvard Business Review (Lunenburg, 2011). He argued that, leaders and managers play a vital role in the organization, but their functions, roles, and impacts are different. According to him, leaders promote the change and development of the new approaches, while the managers advocate for the stability and the status quo. Furthermore, leaders are concerned with the people’s understanding and gaining their commitment, while the managers are focused on the responsibilities, exercising authority, and accomplishing the immediate tasks at hand (Lunenburg, 2011).

However, in 1990 John Kotter has offered his view on the roles and importance of the leadership and management in the organization (Lunenburg, 2011). As he argued, the roles of the leaders and managers are important in organizations, but they are different, and they are complementary. This was a big change in how the two concepts were viewed in the business as well as the academic circles. As Kotter argued, the role of leadership is to cope with change, while the role of the management is to cope with the complexity.

According to Kotter, the leadership process is focused on: developing the vision for the organization, getting people on board through the communications, and motivating people via empowerment and basic need fulfillment (Lunenburg, 2011). Thus, leadership creates change and uncertainty in the organization.

On the other hand, management is concerned with: planning and budgeting, organizing and staffing, and controlling and problem solving. Thus, management reduces the uncertainty and provides the stability in the organization (Paauwe, 2004 ).

Thus, based on the above discussion and views, it is obvious that, depending on the views on the leadership and management, there are aspects that differentiate the two, and there are areas which may overlap. According to the older views, the overlaps are much more common and large, and according to the latest views on the roles and functions of the leadership and management, the common areas are much smaller (Paauwe, 2004). As it seems, the latest views, ones presented by the Kotter, seem to be more mainstream. In order to see the differences Kotter has advocated for, the following paragraphs will highlight the differences more precisely. Five categories of comparison between the management and the leadership will be used: thinking process, goal setting, employee relations, operations, and governance (Lunenburg, 2011).

The five categories in the leadership prism (Lunenburg, 2011):

Thinking process; focus is on people, and looks outward. The day to day activities are completely out of the focus and interest.

Goal setting; communicates the vision, describes the future; sees a forest in other words. It uses broad strokes, general descriptions, and leaves the details to others.

Employee relations; empowers people, develops trust, commitment, and builds collegial relationships.

Operations; does the right things, advocates and promotes change, serves subordinates; promotes bottom up approach.

Governance; uses influence, trust, respect, and acts decisively. It is less about the authority, and more about the agreement and on-boarding.

The five categories in the management prism (Lunenburg, 2011):

Thinking process; focuses on the tasks at hand, and focuses inward. It is about the things that need to be done in order to accomplish the vision set out by the leader.

Goal setting; executes plans, oversees the processes, focuses on the present day; sees the trees in other words.

Employee relations; controls, subordinates, directs, and coordinates. It is much more functioning relationship which is based on the formal foundations.

Operations; does the right thing, manages and oversees the implementation of the changes, and serves the superiors in the organizational hierarchy.

Governance; uses authority, reduces and prevents conflicts, and acts responsibly.

Thus, as the above discussion has shown, Kotter has been right when he argued about the differences and the complementarily. As the category descriptions above have shown, the leadership is about the general visions, while the management is about getting things done.

Practical applications of management and leadership

As the discussion above has shown, the roles, focus, and the practice of leadership and management have changed over time. While the earlier practice and application have overlapped more, today they are much different. The practice of the leadership and management are different based on the two major factors: the environmental stability and the task complexity.

Quadrant 4

Considerable leadership and management required

Quadrant 3

Considerable leadership, not much management necessary

High

Change

Quadrant 2

Little leadership but considerable management required

Quadrant 1

Little leadership or management required

Low

Low Complexity High

Figure 1: leadership and management and the impact of change and stability (Börsch, 2007)

As you can see from the figure 1 above, there are four distinct scenarios where the leadership and management are playing different roles. The conditions and the degrees of change and complexity are expressed in the four quadrants indicated in the four different colors. As you can see, the horizontal axis represents the degree of the complexity, and the vertical axis represents the degree of change required. Let’s discuss the roles of the leadership and management in each of the quadrant, representing the four scenarios organizations may face in the business environment.

Quadrant 1; this is the case when there is little leadership or management is required. This environment exists when the change is not required, or the requirement is low, and the complexity of the task is low as well. This was the case before 1900s, when the technology was simple, and the demand was somewhat uniform (Brewster, 2008).

Quadrant 2; this is the case when the leadership is not as important, but requires considerable management. This environment is characteristic to the slow growth or stagnant economies, where the leadership doesn’t accomplish a lot, and the management is the one responsible for finding the new ways to achieve growth (Krug, 2004).

Quadrant 3; this is the case when an organization faces a high turbulence in the environment, and has little complexity in the tasks to be accomplished. This environment is characteristic to the companies undergoing reforms, changing cultures, and transformation. Here the leadership takes charge, and guides the company through the tough times (Carter, Ulrich, & Goldsmith, 2005).

Quadrant 4; this is the case when both, the management and the leadership is hard at work in order to stabilize the environment, and accomplish the difficult tasks (Börsch, 2007). This is the case in the highly volatile environments where the tasks are difficult to get done. One example would be a post soviet Russia, where companies faced considerable challenges in terms of the environment, as well as the task complexities. It was caused by the two factors; first it was the political instability. Was Russia going to adopt the capitalist system or was it going to go with the old, soviet system? Second, the lack of clarity on who was in charge, what the regulations were, and how they were applied, was a challenge, and the local managers were in charge of getting things done (Ardichvili, and Kuchinke, 2002).

As the matrix above has shown, there are different circumstances, and the requirements for the roles of the leadership and management change accordingly. However, as the debate continues on which one to apply and use more, there are two combinations that might arise.

First it is the weak leadership and strong management. In these companies, the focus is on the short term goals, details, reducing and eliminating the risk, and basing everything on the rational decision making process. Furthermore, the management focuses on fitting the people to the jobs, and making sure the compliance is adequate (Carter, Ulrich, & Goldsmith, 2005). The consequence of this type of governance is sometimes unintended, but nonetheless, it is catastrophic for the organizations. As a result of the weak leadership, an organization becomes rigid, less innovative, and most importantly, unable to change as the environments changes. Processes become micromanaged, and there is a slow but steady deterioration in the productivity, effectiveness, and motivation (Carter, Ulrich, & Goldsmith, 2005).

In the case of the strong leadership and weak management, the situation is somewhat different. In this case, there is a strong vision for the future, but there is no short term planning and budgeting. In these types of organizations, there is cult-like culture, where there are no rules, regulations, structures, and specialization. As a result, the organization becomes hard to control, deadlines are not met, the coordination becomes poorer and poorer, and often times the organization collapses due to the lack of the day to day management (Carter, Ulrich, & Goldsmith, 2005).

Thus, as the practical application of the leadership and management has shown, it is critical to strike a “golden balance” which will assure the long term vision, flexibility, as well as the planned and well managed procedures which will guide the company to a desired goal.

Multi-country prospective: US, Germany, China

When looking at the leadership and the management in the multicultural prospective, it is interesting how the approaches differ. Let’s look at how the practices are implemented in the three countries.

US; as it seems, the American companies are striving for balancing the management and the leadership’s roles more than any other countries named below. In addition, American leaders are building their roles based on the charisma, and rely less on the power. In terms of the management, it’s all about the professionalism (Carter, Ulrich, & Goldsmith, 2005).

Germany; in the case of Germany, it’s all about the management, and less about the leadership. The balance can be described as 60/40. Thus, German companies put more emphasis (relatively speaking)on the getting things done, and doing them right (Börsch, 2007).

China; in the case of China, the balance shown in the German case tips further to the management’s side. In China, management is responsible for getting things done, but the leadership holds the most power (Qiao, 2006). This is not observed in any of the previous two cases. In the US and Germany, the balance of power, as well as the responsibilities, are much more evenly and adequately allocated.

Conclusions

As the review has shown, the roles, the views, and the overall approaches to the leadership and management, have changed dramatically over the years. While in the beginning of the 20th century, the roles were somewhat not relevant and less important, as the world economy grew and the competition, as well as the instability increased, the roles of the leaders and the managers have grown in importance (Lawler, 2006).

Not only the roles have grown, but the views on which is more important, and in what context, have changed as well. As Kotter indicates, these two professions have different functions, different purposes, different scopes of operations, and are complementary rather than conflicting with one another. The earlier views which stated that leaders where promoting change and uncertainty, and the managers were for the stability for the status quo, have changed (Brewster, 2008). Today leaders don’t promote the change, rather they cope with it, and the managers, they deal with the complexities.

Thus, the conclusion is, leadership is critical in the changing world. They set the visions, goals, and see the bigger picture. Managers on the other hand, they are the ones who make sure things get done. They are the planners, organizers, and the fixers. In other words, the leaders are architects, and the managers are the builders; and the right balance between them is absolutely necessary in any organization.