The Differences Between Management Theories - Essay Example

Management Theories Q The main difference between mangers and leaders can be drawn from the way they motivate individuals and teams to achieve objectives. Normally, leaders set the goals and new direction that challenges the status quo. They motivate their followers and lead them to reach this new direction. On the contrary, managers tend to maintain the status quo and they usually focus on managing teams, organizing and directing them to achieve the assigned tasks. The duty of a manger is to plan, organize and coordinate whereas a leader is charged with the responsibility of inspiring and motivating individuals. While managers administer, depend on control and focus on organizational systems and structure, leaders innovate, inspire trust and focus on individuals in an organization. In addition, managers and leaders differ greatly in that leaders have individuals following them whereas managers have individuals working for them. Moreover, leaders tend to be brilliant and charismatic, like taking risks, visionary and creative among others. They use non-coercive form of influence to make individuals achieve certain goals (Bertocci 2009, p.7). In contrast, managers are rational, problem solvers, and in most cases, they focus on organizational goals, structures, personnel as well as the availability of resources. Mostly, managers make use of formal and rational method when organizing people while leaders use passion and stirs emotions when dealing with their subordinates. Managers have to deal with complex issues in an organization like setting standards for development, developing action plans, and effectively using available resource (Klein 2007, p.2). Moreover, the effectiveness of leaders is determined by the accomplishment of goals while managers’ effectiveness is determined by results like profit margins (Bertocci 2009, p.9). Nevertheless, leaders and managers approach to tasks differently, that is, leaders look at the problem and come up with creative solutions. Their charisma and dedications helps them to motivate employees to do their best and to effectively solve any problem arising. In contrast, managers establish strategies to form teams and combine ideas to come up with appropriate solution to any problem. They encourage their subordinates to share their views in order to reduce inherent risk and promote success. Accordingly, they both have different approaches to risk in that as leaders are risk takers, managers are risk averse. More so, leaders are the facilitators when decisions are made while managers are involved themselves in this process. Furthermore, mangers accepts the status quo and does things right but leaders are known to challenge the status quo and do the right thing. The three main leadership styles are autocratic, democratic and laissez-fair. To begin with, autocratic leadership style allows leaders to make decisions independently without consulting others. Always, an autocratic leader focuses on the tasks and decides alone without involving the subordinates. Normally, the decisions of autocratic leaders are not supposed to be challenged by anyone. More so, autocratic leadership restricts communication to top-down channels and these leaders create social distance between them and their subordinates (Sadler 2003, p.74). The main advantage of autocratic leadership is that it is useful in organizations where employees need close supervision. More so, it is useful where quick decision-making is needed. However, it is not effective where in organizations with creative employees. It does not foster employee engagement, also it does not maintain employee satisfaction, and so it is related to employee dissatisfaction, turnover, and absenteeism. Some of the notable authoritative leaders include Bill Gates and Martin Luther King Jr. Bill Gates successfully moved Microsoft in the right direction. He had a vision and aligned the resources of Microsoft with that vision. Martin Luther also is an authoritative leader as he managed to mobilize a nation a vision. Democratic leadership values and encourages the input of others including the views of subordinates. However, making the final decision is the responsibility of a democratic leader. A democratic leader is a team leader who focuses on individuals and engages people in the decision making process and other activities. This type of leadership promotes the morale of subordinates since it allows employees to make significant contribution to the decision making process because it their contribution makes them feels that their opinion matters. More so, democratic leadership style enables employees to be flexible and accept any changes in the organization because they take part in the management process. The advantage of this leadership style is that it is effective when it comes to making effective decisions and good management in the organization because it is participatory. It assists employees to feel more involved in decision outcomes. However, democratic leadership is not effective in organizations with clearly defined and rigid guidelines, roles, and practices. A good example of a democratic leader is Dwight D. Eisenhower who had hard time convincing the alliance forces to agree to a common strategy. He ensured that everyone worked together to have a common understanding. Laissez-faire leadership is a type of leadership style where the leader gives the team members freedom in their operations, that is, how they do their work and set deadlines. These leaders allow team members to make the decisions. They only provide support in terms of resources and advice where necessary. The autonomy provided in this kind of leadership can free team members and assist them feel more satisfied with their work. It can be very effective in places where team members are highly motivated, skilled and able to complete tasks on their own with very little guidance. However, laissez-faire leadership is not encouraged in situations where team members lack knowledge required to accomplish tasks and make decisions. More so, some individuals are not good at setting their own deadlines and so this can result in missing deadlines especially if such individuals lack enough guidance from leaders. Steve Jobs and Herbert Hoover are some of the laissez faire leaders. Steve Jobs are known to take a hands-off approach to leadership. Hoover not only worked to humanitarian relief across the globe but also relied on the experience of his team in his operations. Q.2 PESTLE theory is useful in identifying the external forces that affect an organization. It is used to analyze the key drivers of change in a given business environment. It involves a simple analysis of the political, economic, social, technological, legal, and environmental factors in an organization. More so, PESTLE analysis helps in assessing the current environment and potential changes and this will in turn enable management to respond to noticed changes more effectively. The first element in PESTLE theory is the study of political factors, which mainly involve the extent to which a government intervenes in the economy. Undeniably, political factors influence organizations in various ways as they can create advantages and opportunities for an organization. Generally, political factors that are of more importance include market regulations, legislation such as the minimum wage or the anti-discrimination laws, trade agreements, tariffs and restrictions, tax levies, trade reforms, and form of government regime among others. Economic factors also have a significant impact on how an organization operates and how profitable an organization is. They take into consideration all events affecting the internal and external economic environment. The internal economic events relate to the project viability, financial models and accountability techniques. On the other hand, external economic events include economic growth, interstate taxes, interest rates, working hours, inflation rate, unemployment, minimum wages, recession, cost of living, and embargoes and so on. The third aspect of PESTLE analysis focuses on social forces that affect the market and community. These forces affect individuals’ attitudes, interests and opinions. More so, they shape individuals’ behaviors and define their purchasing power. Social factors that need to e considered include population dynamics, career attitudes, global warming, health consciousness, cultural expectations and age distribution among others. Technological factors take into consideration all the forces that affect technology. These factors focus on how technology affects how organizations market their products. These factors include new ways of producing and distributing goods and services as well as new ways of communicating with target markets. It is important for an organization to consider technology infrastructure such as the internet, technology systems, and technology hardware such as computers, photocopiers, mobile phones, and fax machines among others. Legal factors take into consideration all legal aspects such as quotas, taxation, employment, imports and exports, and resources. Organizations need to be aware of legal issues to be able to operate successfully. The common legal factors include advertising standards, health and safety, product labeling and safety, and consumer rights and laws among others. Lastly, environmental factors are also important and cover ecological and environmental aspects. This component of PESTLE theory emerged following the increasing scarcity of raw materials and increased pollution among other forces. These factors include recycling policies, temperature, natural calamities, and ground contaminations and so on. Notably, Tesco is a multinational food retailing company having its headquarter in the UK and it has stores in different countries across the globe. This is a PESTLE analysis for Tesco. Starting with political factors, Tesco is a multinational retailing company that operates worldwide and so global political factors greatly affect its performance. Some of the political factors influencing Tesco’s performance include tax rates, stability of the country in which it operates, and the acts of legislation. Recently, the government of UK has adopted a tax measure that really affected this company. That is, the government increased the vat rate to about twenty per cent with the aim of increasing its revenue, but this negatively affected the sales revenue generated by Tesco. In addition, the government suggested the adoption of a fat tax as a way of controlling obesity and reducing medical complications associated with it. This measure is likely to adversely affect the sales revenue of some products retailed by this company. According to Atrill (2009, p.33), the sales revenue is a very important source of income of this retail company and so it has significant impact on profits. More so, following the current financial instability across the globe, different governments support retailers to create jobs for local candidates. Therefore, Tesco has not only played a leading role in creating employment opportunities, it also increases the demand for its products and diversifies its workforce. It follows the employment legislation and other related laws in each country where it has stores. The economic factors are the major concern for Tesco as they influence costs, profits, demands and prices. The demand and the price of a product in market as well as profits generated by this organization rely on the economic factors such as inflation and interest rates as well as local unemployment levels. These economic factors can have adverse impact on the performance of the organization. Tesco largely depend on the UK market as opposed to its stores in various countries and this puts it at risk if UK market collapse of affected by any external forces. The social factors have also affected the operations and performance of Tesco. The demographic changes and changes in consumer behaviors, attitudes, taste and preferences are very important social factors that can affect any business. Since it is dealing with food, Tesco has to analyze its customers constantly because consumers prefer healthy and tasty food items. Notably, individuals have become more aware of health issues and so their eating habits are changing constantly. Tesco has tried to adapt to these changes by effectively responding to the demand for organic products. Technology is a very important factor for the supply chain management of this retail company. Technological advancements have created new opportunities for Tesco. For instance, the establishment and introduction of online shopping together with home delivery services has greatly benefited this company. More so, Tesco has effectively used these advanced technologies to improve customer satisfaction. Some of the technologies adopted by Tesco stores include self-checkout machines and electronic shelf labeling among others. Legal factors, that is, government policies and legislations also directly affect the performance of Tesco. For instance, Food Retailing Commission that was enforced in 2004 to use standard pricing for products greatly affected this company. This is because this law required the retailers not to change the prices without any notice and should not demand payment from suppliers. Tesco has made its customers happy by proving several promotions with reduced prices on the products. With the increased pressure on companies to operate in an environmental friendly manner, Tesco is focused on reducing its carbon footprint by fifty percent in the near future. More so, it has successfully minimized the waste produced in the stores during product manufacturing. References Atrill, P., 2009, Financial Management for Decision Makers, Fifth Edition. London: Financial Times Prentice Hall. Bertocci, D.I., 2009.Leadership In Organizations There Is A Difference Between Leaders And Managers, Lanham, Md, University Press of America. Klein, A., 2007.Management and Leadership, GRIN Verlag. Sadler, P., 2003. Leadership, London, Kogan Page Ltd. Read More