The Differences Between Leadership and Management - Case Study Example

?Leadership and Management This paper on leadership and management discusses the various critical issues within the field of management, such as the basic differences between leadership and management; the various roles and responsibilities of managers and leaders with regard to the creation and maintenance of a healthy organizational culture; the impact of globalization and management in an international context etc. For the purpose of this study, Nike is chosen as a case study. The paper will finally conclude with various strategies which can be adopted by managers and leaders for developing and maintaining a healthy organizational culture. “Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall.” Stephen Covey Difference between leadership and management The terms leadership and management have been used interchangeably and are relatively similar in more ways than one, however the concepts are not mutually exclusive. For instance, both leaders as well as managers are responsible for achieving similar organizational goals – that of steering the organization towards profitable goals; their tasks involve working in groups and managing people; along with other similar shared traits and responsibilities. According to Richard Daft, "leadership cannot replace management but rather is something that is to be practiced in addition to management" (in Prussakov, 2011). Warren Bennis, has listed various key differences between leadership and management which are discussed below: Managers are responsible for handling the day to day administration of the organization while leaders on the other hand are required to ‘lead’ through ‘innovation’. The management team at Nike is focused on innovation and creativity as a part of their strategic policies with a view to retain their competitive positioning in the market and retain their dominance. Hence, while the managers are entrusted with the responsibilities of handling the routine operations the leaders on the other hand, constantly seek to develop new ways to create and innovate their products. For instance, recently Nike developed a new app which uses the iPhone's GPS and mapping capabilities to track the performance of the athletes / runners. Furthermore, the app is moderately priced and connected directly to the company's website which helps the runners / users to share their running routes as well as time with everyone and post their results directly to popular social networking sites such as Twitter and Facebook (NY times, 2010). The managers maintain stability while the leaders initiate change. The manager's task is to maintain and sustain the competitive positioning of the organization while the leader is entrusted with the responsibility of developing and expanding the organization. For instance as observed in the case of Nike, during its initial days, the company experienced rapid growth and began to be known as a leading and fashionable sports brand during the 1990s. However by the end of the 1990s the growth began to stagnate, with the entry of new players in the market such as Adidas and Reebok along with several other smaller brands. One of the key marketing problems faced by Nike during these times was that the company had begun to lose its brand image, as fashionable footwear for teens, as older people increasingly began sporting Nike gear (i.e. clothing as well as footwear) (Porter et al., 2005). The managers, in this case were responsible to ensure that the company achieves its profit targets and maintains its stability however, the leaders on the other hand, were required to innovate and change the brand image to achieve its long term goals – that of long term sustainability in the market. Hence, as a result, the management at Nike changed its marketing strategy and targeted a younger market segment –the Californian teenager, to revamp its brand image. The manager encourages and enhances the efficiency of the employees and groups while the leader is focused on generating better outcomes and creating an organizational culture of integrity. Nike Inc., has a code of ethics for all its employees known as 'Inside the lines', which is a part of its strategic leadership initiative. In accordance with such code of conduct, all employees are required to verify their knowledge and awareness regarding Nike's policies and business goals, which are revived annually. Furthermore, the company has set up toll up free AlertLine to enable their employees to report any suspected violations within the company, anonymously (Nikebiz.com, 2011). Such a move encourages the fostering of a healthy working environment, where the leadership is evenly distributed and the employees are given the power to report any wrongdoings directly to the authorities, via toll free lines. In conclusion it can be stated that the manager takes care of the short term goals while the leader is a visionary and plans and executes long term goals. Roles and responsibilities that organizational managers and leaders play in creating and maintaining a healthy organizational culture “Organization doesn't really accomplish anything. Plans don't accomplish anything, either. Theories of management don't much matter. Endeavors succeed or fail because of the people involved. Only by attracting the best people will you accomplish great deeds.” Colin Powell Managers and leaders are entrusted with the responsibility of identifying the potential of their employees, and putting it to best use, to achieve their greater organizational goals. The managers and leaders use and implement various information gathering strategies, to collect input from their employees and use the same to create a better and healthier working environment for their employees: For instance the toll free AlertLine helps the employees to communicate their grievances to the authorities anonymously, thus giving them a sense of security and confidence. This not only increases the employee satisfaction but also lead to enhanced productivity, which is translated into higher profits for the company. At Nike Inc, the managers are devoted towards creating a healthy working environment for the employees; which is done by imbibing the brand image, and reinforcing the same as a mark of the collective organizational identity. This is primarily to ensure that the employees grasp the significance of the organizations’ culture and values endorsed by it. In fact, the employees at Nike are so dedicated towards the company that many have sported the popular swoosh tattoo on their bodies to proudly announce their association with the brand and the organization (Shields, Lipsyte, 2007; Nelson, Quick, 2007). Furthermore, the management focuses on four key strategic activities i.e. planning, budgeting, assessing and facilitating in order to ensure that the working environment functions smoothly and effectively. The planning entails the management of company's assets in a way to foster and encourage new product development, and thus accomplish their goals of increasingly productivity. Budgeting involves steps taken by the managers and leaders to plan an annual budget and train the employees to work accordingly to achieve the organizational goals. Assessing involves the application of leadership traits, such as ensuring effective work from the workers, and motivating the groups to perform better. The leaders are responsible to get work done by motivation and encouragement, while the employees are expected to adapt to the leadership styles. The leaders and managers must create an atmosphere of trust and openness, to encourage the teams and individuals to work together effectively, and achieve the company goals. Facilitating on the other hand, entails an effective co-ordination of both leadership and managerial skills. The organization is responsible for creating and fostering a healthy working environment for its workers, so that they can be motivated to perform better to their maximum capabilities, and the leaders can do so, by developing a relationship of trust between them. The managers are then required to implement the organizational policies developed by the leaders and ensure that the same is followed regularly. This will ensure that the workers and supervisors understand their jobs perfectly and help in development of a better and healthier working environment (Nelson & Quick, 2007). The affect of globalization and management across borders “Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital - the world's best talents and greatest ideas.” Jack Welsh The advent of new technology and globalization has drastically changed the manner in which organizations operate and function. Today, the scope and definition of markets has changed significantly and has now transcended beyond borders. In the words of Thomas Friedman, the world has indeed become flat. Organizations today, thus, have become extremely competitive and have ventured into foreign markets to exploit the cheaper labor offered by developing countries, to lower their costs. Such a trend has given rise to a global corporate culture, and hence the management has to adapt to the multicultural market place, through innovation not only in their products but by way of their corporate strategies. Nike, has set up their manufacturing units in various parts of Asia in order to lower their costs and the same products are now marketed all over the globe. In such a scenario, the need to foster and develop a healthy organizational culture is all the more urgent and crucial. Organizations must enforce and promote their values and ethics by way of code of conduct to encourage a better working environment for their employees. Organizational values have a great impact on the work culture and help in creating a sense of belonging among the employees and workers. Furthermore, the management must ensure that there is a smooth and effective flow of communication at all times, and across all levels in the organization. Barriers to communication often tend to distract the employees which affect their productivity, morale and self-confidence as well as may lead to loss of faith in the organization itself. This would in turn directly affect the employee loyalty. Retaining loyal employees is as important for a company as retaining their customers, hence the management must take active steps to ensure that the workers / employees in the organization are encouraged to be a part of the team, value their inputs, and respond to their feedbacks. Conflicts among employees in an organizations is common, however, efforts must be made to ensure that the same are promptly attended to and resolved. A healthy working environment is the key to a successful organization. References: Bennis, W., (2009). On Becoming a Leader, Basic Books Publication, Pp. 131-133 Nelson, D. L., Quick, J. C., (2007). Understanding organizational behavior, Cengage learning publication, Pp. 391 Porter, K., Smith, P., Fagg, R., Winfield, P. W., (2005). Leadership and management for HR professionals, Butterworth-Heinemann Publication, Pp. 476 Prussakov, E., (2011). Affiliate program management: An hour a day, Wiley Publications Shields, D., Lipsyte, R., (2007). Body Politic: the great American sports machine, University of Nebraska Press, Pp. 183 NY Times (2010). GADGETWISE; An App Tracks Your Run With Maps and Times [Online] Available at: http://query.nytimes.com/gst/fullpage.html?res=9903E2DF1F39F933A0575AC0A9669D8B63&ref=nikeinc [Accessed: July 14, 2011] Nikebiz.com (2011). Ethics and Conduct [Online] Available at: http://www.nikebiz.com/crreport/content/about/1-4-3-ethics-and-conduct.php?cat=governance-accountability [Accessed: July 14, 2011] Read More