Table of Contents
Management
According to French management theoretician, Henri Fayol, management is about: planning, organizing, commanding, coordinating, and controlling. These management activities are task-oriented rather than people-organized.
Other functions of management include:
- developing and motivating employees
- measuring and evaluating performance against organizational objectives
- establishing personal contacts
- fostering professional networks
Management vs. Leadership
| Management | Leadership |
| Focus on the present | Focus on the future |
| Planning, organizing, controlling, commanding, coordinating, and setting objectives | Cope with and promote change, with a more emotional dimension to inspire and align people |
| Deal with individual needs of staff | Focus on common needs |
| Work with parameters of the organizational policies and procedures | Instigators of change, setting the strategic direction of the organization |
| Focus on operational objectives and tactical decision making | Focus on vision/mission statements and strategic decision making |
Leadership Styles
| Leadership style refers to the way in which managers and leaders provide direction, implement organizational plans, and motivate people. |
Autocratic Leadership Style
| Autocratic leaders are individuals who make all the decisions and prefer not to delegate any responsibility. They simply tell subordinates what to do. |
This type of leadership style is suitable in situations that require quick decision-making or when critical decisions have to be made. For instance, when dealing with a hostile takeover.
It is also suitable for businesses with unskilled workforce and depend on the directions and instructions of leaders.
Advantages and Disadvantages of Autocratic Leadership Style
| Advantages of Autocratic Leadership | Disadvantages of Autocratic Leadership |
| ensures there is control and close oversight within the organization | stifles initiative and creativity as employees are not involved in decision making |
| quick decision making takes place | subordinates are usually ineffective if the leader is absent from work |
| employees have a clear sense of direction | demotivates workers as their ideas are not valued |
| effective when deadlines are major decisions need to be made | does not nurture future leaders among employees so can damage competitiveness in the long term |
Paternalistic Leadership Style
| Paternalistic leaders treat their employees as if they were family members, guiding them through a consultation process and acting in the perceived best interest of their subordinates. The leader makes decisions on behalf of the team, building trust and loyalty in the process. |
Paternalistic leadership style is effective in family-run businesses.
It is used in organizations where the leader is highly experienced and genuinely values the workers.
There is close supervision of employees and their work i.e. parent’s traditional control over their children.
Advantages and Disadvantages of Paternalistic Leadership Style
| Advantages of Paternalistic Leadership Style | Disadvantages of Paternalistic Leadership Style |
| softer form of autocratic leadership which often results in improved staff motivation and lower staff turnover | employees can become dissatisfied as their viewpoints are often ignored (decisions are made by top management) so it does not help to develop their careers |
| feedback is invited, so this can improve relationships at work as employees’ social needs are emphasized | communication is mostly downward |
| there is often commitment and loyalty to leaders who workers perceive will take care of their well-being | paternalistic leaders can become too dictatorial and make poor decisions |
Democratic Leadership Style
| Democratic leadership refers to leaders who take into account the views of others when making decisions. This participative leadership style means that decision-making is decentralized. |
Advantages and Disadvantages of Democratic Leadership Style
| Advantages of Democratic Leadership | Disadvantages of Democratic Leadership |
| can be motivational as workers feel their opinions and input are valued, thus creating a greater sense of belonging and staff loyalty | decision making is slower as employees have greater involvement in the process |
| collaborative environment often results in better informed solutions to challenges and problems | reaching a consensus over decisions can be time consuming and costly |
| two-way communication, so this encourages the sharing of ideas | inappropriate for urgent decisions needed during challenging times faced by the business |
| possibility of disagreement among internal stakeholders during decision making process can negatively affect day-to-day operations |
Laissez-faire Leadership Style
| Laissez-faire leadership is based on having minimal direct input in the work of employees. Instead, they allow subordinates to make their own decisions and to complete tasks in their own way. |
The success of laissez-faire leadership mainly depends upon the aptitude and attitude of employees.
It is suitable for mundane and routine tasks which do not require managerial supervision, especially when staff can be trusted, are highly talented and self-motivated and are willing and able to take on responsibility, e.g. Google and Facebook.20
Advantages and Disadvantages of Laissez-faire Leadership Style
| Advantages of Laissez-faire leadership | Disadvantages of Laissez-faire leadership |
| freedom given to employees can allow them to excel in what they do best, without any constraints imposed by the management | individual goal setting could conflict with organizational objectives, especially as there is an absence of management control |
| provides opportunities for staff with vision and intra-preneurial skills | often criticized for the poor definition of the role of management |
| autonomy in decision making can have positive impacts on staff motivation, productivity and staff retention levels | as management take a ‘hands-off’ approach, monitoring and control of the organization’s operations become very challenging |
Situational Leadership Style
| Situational leadership refers to the belief that there is no single leadership style that suits all situations. The ‘best’ style depends on situational factors, for instance, attitudes, behavior and competencies of managers and workers. |
It is assumed that there is no single best leadership style but rather different styles are suitable depending on the context or situation.
This style of leadership depends on the skills and expertise of the manager and leader of the business.
Factors Affecting Situational Leadership Style
CLOTS:
- Culture = what type of culture exists within the organization and what are the group norms?
- Leader = how much trust do leaders have in their employees, how experienced are they as leaders and what is their preferred leadership style?
- Organizational structure = are hierarchical structures tall or flat? How large is the span of control?
- Task = to what extent are the tasks difficult, urgent and important? Are the tasks routine and low skilled or highly complex?
- Subordinates = what are the level of skills, motivation and unity of the employees? How many employees are there?
Advantages and Disadvantages of Situational Leadership Style
| Advantages of Situational Leadership | Disadvantages of Situational Leadership |
| it recognizes the need for leaders to be flexible in their style | most managers or leaders have a preferred style, so expecting them to change their style according to different situations can be difficult |
| it is practical and applies across a range of industries and business problems | employees may have grown accustomed to a particular leadership style in the workplace, so staff may be disoriented and unsettled were the leader to change his/her style |
| workers can benefit from the mix of support from leaders when appropriate, and directive activities at other times | the inconsistent approach can mean the leader loses credibility with the employees |
Simple Review Questions
- What are the differences between leadership and management?
- What are the main functions of management?
- Explain the differences between autocratic, democratic, paternalistic, laissez-faire and situational styles of leadership.
- What are the five factors that affect situational leadership styles? *Hint: CLOTS*
Past Paper Review Questions
Question 1
Answer [6/6 marks]
One difference between leadership and management is that while leaders focus on the long-term plans of a business, managers handle the short- to medium-term issues that a business is facing. It is known that Su is not taking a part in the day to day running of HH and she has an input into the strategic decision making while her managers make day to day and tactical decisions.
- The first paragraph already shows that the candidate has understood the task well: contrasting leadership and management, with reference to Su and her managers. The first paragraph is about a first difference, well applied.
Another difference between is that leadership has a more emotional quality when it comes to inspiring workers towards a common goal while managers’ responsibility is to direct subordinates. While Su “provides the inspiration for HH” and “the managers are inspired by Su”, the managers direct staff with a more professional approach. With the ability to motivate and inspire others, Su, as a leader, helps workers and managers to understand her mission and get together for a common goal. The managers however, are more task-oriented.
- The second paragraph is about a second difference. The candidate quotes the case study, which is a good technique to substantiate their ideas. It is good to see that all through the answer, the candidate uses subject terminology, for example here using “task-oriented”.
Another difference between leaders and managers is that while leaders are not afraid to take risks and welcome change, managers try to avert risks and apply the policies of the business they are working for. Su, as a leader, takes the risk of investing 200,000 into a new business when she already has enough money. The managers however, try to avert risks by coordinating and taking tactical decisions.
- Third paragraph, third difference – always with a balance of “theory” and “practice”. The candidate also shows that they understand the story of the case study very well.
As a laissez-faire leader, Su also empowers her managers in order to motivate them and have autonomy. That is why leadership is also concerned with motivating workers with a more people-oriented approach while managers mostly focus on their tasks
- Although the question is not explicitly about leadership styles, the candidate harnesses knowledge of leadership styles very well in their answer, showing the examiner that they master unit 2.3. The answer is clear and thorough.
Question 2
Answer
(a) Laissez-faire is the leadership style based on having minimal direct input in the work of employees. Managers and leaders allow their subordinates to make their own decisions and to complete tasks in their own way whilst retaining overall responsibility for the work.
Award 1 mark for a vague answer that shows some understanding of the term ‘laissez-faire’.
Award 2 marks for an answer that shows a clear understanding of the term ‘laissez-faire’, with appropriate use of business management terminology and/or an example used.
(b) The functions of management include:
- Planning – Managers are responsible for setting the course of action to achieve organizational objectives, e.g. Vinayak Textiles aims ‘to gain higher sales and to increase market share’.
- Organizing – Managers organize resources in order to achieve corporate objectives, e.g. by restructuring the business as hinted by Ritu Vinayak, the incoming Managing Director.
- Controlling – Managers are responsible for the performance of their teams. In the case of Vinayak Textiles, there seems to be a need to take corrective measures as profits have been falling.
- Commanding – Managers pass on instructions and orders to their subordinates in order to achieve corporate objectives. Workers have become complacent at Vinayak Textiles so commanding as a function of management becomes vital for the firm to restore its competitiveness.
- Coordinating – Managers have the responsibility of ensuring that all sections (or departments) strive to achieve the main goals of the business, e.g. by delegating or allocating appropriate tasks to the 30 workers in Hyderabad.
- Managers as general practitioners – Handy suggested that managers must oversee the level of staff turnover, productivity and customer satisfaction. The ‘health’ problems in the business, such as complacent staff (and perhaps demoralized staff following the proposed changes to the remuneration system) must be dealt with by the management.
- Communicating with and motivating employees – Drucker argued that even the most laissez faire manager has to communicate with the workforce in order for the organization to be successful.
- Measuring performance – Drucker also suggested that every employee’s job performance can be measured by the extent to which he or she meets the objectives that have been set.
Note: it is not expected that students use all three theories (Fayol, Drucker and Handy).
Award 1–2 marks if the answer lacks detail and/or coherence. The answer might be listed in bullet point form without much, if any, development.
Award 3–4 marks if there is some good application of management functions and some appropriate business management terminology has been used correctly.
Award 5–6 marks if there is thorough application of a range of management functions to Vinayak Textiles. Appropriate business management terminology has been used effectively throughout.
Question 3
Answer
(a) Differences in management and leadership in schools might include:
- The school Principal is the leader of the organization because he or she determines (with the senior management team) the vision and direction of the school, e.g. deciding whether to adopt IB courses (PYP, MYP and DP) to the benefit of the students. By contrast, managers such as the Heads of Year and Heads of Department, deal with daily, tactical and routine decisions.
- Leaders are accountable for a much broader range of responsibilities. The senior leadership team (SLT) are collectively responsible for all the staff (teaching and non-teaching) whereas managers are responsible for the people within their teams.
- As a leader, the Principal strives to inspire and motivate staff; he or she encourages and entrusts creative and talented staff to help the school move forward.
- Managers follow predetermined rules and policies set by the school and SLT. Their focus tends to be on accomplishing tasks and managing people within their teams.
- Middle managers ‘do things right’, i.e. teaching and administration. By contrast, the SLT and Principal ‘do the right thing’, e.g. devising school policies and contingency plans to manage crises.
- The Principal and SLT focus on inspiring staff to achieve organizational aims and objectives via delegation and empowerment. By contrast, middle managers focus on control (managing and directing) subordinates within their teams. They focus on completion of tasks within predetermined deadlines.
Note: Given the question, allow examples that are not related to schools/education.
Award 1–2 marks if the commentary is vague and/or incoherent. Answers might appear in a list-like form with little, if any, explanation.
Award 3–4 marks if the commentary is accurate, with the roles of managers and leaders clearly distinguished. There is good use of examples and reference to the case material.
(b) A range of leadership/management and motivation theories could be used. For example:
- Autocratic management/leadership (favored by the likes of F.W. Taylor and Henri Fayol): Customers – the parents (and students) might become dissatisfied with the quality of teaching and learning, and perhaps look at alternative schools for their children.
- Motivate staff who want clear leadership and direction.
- Help to keep staff ‘on their toes’, i.e. it reduces the likelihood of slackess and complacency.
- Be effective/appropriate in ‘failing schools’ where examination results and/or discipline are a cause for concern.
- Demotivate highly creative and skilled employees, such as highly experienced school teachers, who don’t want to be told ‘how’ to do their jobs.
- Negatively impact on staff retention levels in the long term.
- Laissez-faire management/leadership:
- Can be appropriate in schools where the Principal and senior leadership team (SLT) have upmost faith in the professionalism and ability of their staff to get on with their jobs. The SLT will set the organizational objectives and school development plan, but then it is up to the employees to decide how best to achieve the objectives using the resources available to them.
- Can lead to high levels of motivation as staff may feel trusted and highly valued by their employer. Staff also feel that they have control over their work and can contribute to the success of the school. This helps them to achieve esteem and ego needs, to some extent (Maslow’s hierarchy of needs).
- Can make coordination and decision-making very time-consuming because there is a lack of overall supervision or control. Furthermore, laissez-faire management/leadership relies heavily on people’s goodwill and teamwork to achieve the organization’s goals. Thus, it can lead to slack behaviour and/or complacency in the workplace unless there are systems set in place to make staff fully accountable for their work, e.g. lesson observations and performance management reviews.
Award 1–3 marks if the answer lacks coherence and does not make effective use of management/leadership theory and motivation theory.
Award 4–6 marks if there is an examination of how different management and leadership styles can influence the level of staff motivation in organizations such as schools, although the answer lacks detail in certain areas. Relevant examples and business management terminology have been used, but there is limited, if any, evidence of critical thinking.
Award 7–8 marks if there is a thorough and well-balanced discussion of how different management and leadership styles can influence the level of staff motivation in organizations such as schools. There is effective application of leadership and motivation theories. Relevant examples and business management terminology have been effectively used.
Question 4
Answer
(a) Situational leadership is probably most suitable for a small local restaurant with just 13 members of staff. Being a small firm, there may be no need for an autocratic leader. However, key decisions need to be made with clear management and leadership, so democratic and laissez-faire leadership might also not be suitable.
(b) An authoritarian/dictatorial leadership style will probably prevail in the armed forces. This is because military personnel need to follow strict procedures, routines and commands in order for there to be any chance of success/survival. Decision-making comes from the top and there is little time (or point) in negotiating strategies with the workforce.
(c) A ‘typical’ secondary school will probably be run in a democratic manner (although this will clearly depend on the situation, the type of school, its teachers and support staff and the nature/ability/motivation of the students). The teachers are likely to be highly skilled professionals so the senior management team is unlikely to ignore or to disregard the input of the teaching staff.
For each question above, award 1 mark for a relevant leadership or management style, with up to a further 2 marks for a clear justification/explanation of the answer.
Question 5
Answer
(a) In the case of Harvey who is seeking permission to take two weeks off work to look after his critically ill father, the issues to consider include:
- Whether Harvey is a highly valued member of staff, i.e. is he trustworthy, hardworking and respected? This is likely to be a one-off request as his father is ‘critically ill’.
- Not granting permission might be counter-productive as Harvey is likely to be distracted and highly demotivated at work whilst his father was ill.
- A supportive leadership style, such as paternalistic leadership, may be appropriate.
- There are also ethical issues (corporate social responsibility) for the management team to consider if they were to decline Harvey’s request.
(b) In the case of Nicole, who is highly demotivated and lacks effort, the issues to consider include:
- A directive leadership style may be appropriate to ensure that Nicole puts in more effort to achieve individual and team targets.
- A telling/directing leadership style might be necessary as Nicole is unable and/or unwilling to complete tasks. This could be combined with the use of SMART targets to get Nicole back on track with her work performance.
- Alternatively, a supportive leadership might be appropriate to establish the root causes of Nicole’s demotivation and possible causes of conflict within the team. Reprimanding her could be counter- productive and lead to further conflict and demotivation.
- The management team may need to take more drastic measures if Nicole does not meet the standards stipulated in her employment contract.
(c) In the case of Morgan who has complained that her line manager is using bullying tactics and is not observing the equal opportunities policy of the organization, the issues to consider include:
- Leaders need to understand the particular circumstances of a situation in order to choose the most appropriate type of authority to implement, e.g. using position authority to remind Morgan’s line manager that he or she must adhere to company policies and statutory requirements such as equal opportunities.
- Alternatively, a selling/coaching leadership style might be appropriate as this is used when employees (such as the line manager) have the ability but are not fully committed, and so they need persuading and coaching in order to accomplish organizational targets. This means the effective leader has concerns for both tasks (accomplishing goals in line with company policy) and people (the line manager and his or her team).
Award 1–3 marks if the answer lacks relevance/coherence/reasoning and may not cover all three situations.
Award 4–6 marks if there is some use of relevant situational theories, although the answer lacks detail/clarity in areas. All three situations are covered. At the lower end, the answer might be presented in a list-like format with little, if any, elaboration.
Award 7–9 marks if there is appropriate selection and explanation of various situational theories for all three situations. The explanations are clear, well applied and fully justified.
Command Terms
References
- https://www.amazon.com/International-Baccalaureate-Business-Management-Hoang/dp/1921917245
- https://www.amazon.com/Business-Management-Diploma-Study-Revision/dp/1471868427
- https://global.oup.com/education/product/9780198437604/?region=international
- https://www.ibbookshop.co.uk/product/business-management-answer-book-for-3rd-edition-downloadable-pdf/
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