Difference between Management and Leadership - Report Example

Business Assignment 2] INTRODUCTION A business or an organizational entity is successful only if it is being managed in the right way. Moreover, the proper leadership gives impetus for the movement of the organization in the right direction, leading to the achievement of the vision. This report focuses on the definitions of management and leadership, and then differentiates a manager from a leader. It then goes on to compare and contrast the leadership styles of two different business leaders, who come from different cultural backgrounds. DEFINITION OF MANAGEMENT Management is the effective and efficient distribution of the firms internal resources between all the aspects, such that the firm is able to gain cost efficiencies as well as competitive edge against its competitors. The 4 step chain of management very comprehensively summarizes the vital tasks that have to be performed by a manager. They are planning, organizing, leading and controlling. Planning is the visionary discussions on how factors have to be distributed, and how a certain project will be finished on time. This is just the pen and paper phase of the management, where the manager is keen on making a plan which is as crisp as possible, and which can be referred to upon as the project moves on. Organizing is the distribution of the resources among the various departments, various teams, various product divisions etc. so that every entity can start working as per the plan that was made in the first stage. (Dale, 1969) Then comes the third stage of leadership, where the manager has to perform the roles of the leader by motivating his staff to achieve the plan that was made by organizing the resources allocated to them in the best possible manner. And lastly, is the stage of controlling, where the manager has to ensure that the resources are not being misused, that the tasks and duties being assigned to individuals are being fulfilled, and that the plan is going according to what had been decided upon. This last stage is actually a check and balance stage, which is very important and helps them do any form of corrective actions that might be required. DEFINITION OF LEADERSHIP Leadership is the influential power that one holds to motivate, encourage and inspire a team to perform better than they usually would and someone who makes a vision and then continuously communicates it to his subordinates, also vigorously trying to increase the enthusiasm level of individual employees for the attainment of that vision. A leader is someone who is bent upon selling his vision to all his subordinates, so that a collective effort is exerted upon the achievement of that vision. (Northouse, 2009) DIFFERENCE BETWEEN LEADERSHIP AND MANAGEMENT Management and leadership are both vital to an organization, and a lot has already being researched and said about the difference between these two terms. It is the organizational structure and hierarchy which is responsible for giving the management power to any manager, and with this power the manager can make sure that the organization has stability, that it is free of chaos and that there is proper problem solving taking place in the company. But with leadership, the power that a leader has usually comes from a persons own goals, inspirations, values that they abide by, interests that they have, and these factors are not that ingrained in the workings of the organization. Leadership is extremely important when there is change taking place in the organization, or when the employees have to be pushed for creativity, or when the vision of a companys CEO or the leaders has to be promoted. (Breen, 2007) The major difference between a manager and a leader is the level of power that they hold within the position that they occupy. And that how much compliance does it get them from the people who are working under them or their followers. Power is defined as the capacity with which one can influence others. This power varies in degree for both managers and leaders. To bring about a change in the behavior of employees, something which is quite often needed in a company, power is needed. There are usually five types of power that are present in a company, originating from either the personality of the person holding it, or from the position that they occupy in the company. They are: legitimate, reward, coercive, expert and referent. The first three, that is legitimate power, reward power and coercive power originates due to the position that one has, where the manager takes the form of a leader too, whereas the last two, expert power and referent power take place due to the personal power that one holds, where a leader is truly a leader only. 1 Legitimate power is the power inherent within the organizational structure itself. This power is assigned to an individual who occupies a specific position within the organization. Should the individual leave the position, the power remains with the position and does not follow the individual. This power is made legitimate within the organization, and the individual is vested with the power. Reward power is also inherent within the organizational structure in that managers are typically given administrative authority over a variety of rewards. Since employees desire rewards, they can be influenced by the chance of receiving them as a result of work performance. Organizational rewards may be the obvious (pay and promotions), or they may be more subtle (praise, status and attention). Coercive power is based upon the manager’s ability to punish an employee. Punishment options range from a mild warning to suspension to termination. A range of punishments is needed because management requires some degree of flexibility so that the punishment applied is suitable to the offense that gives rise to it. Expert power comes from the expertise possessed by the manger, and the value and need of this expertise within the organization. This expertise is a result of the manager’s special skills, knowledge, abilities and/or previous experience. Expert power, derived from special knowledge or advanced education, is typically unrelated to age and job seniority since it often depends upon educational achievement and not necessarily time on the job. (Miller, 2010) Referent power is the ability of one individual to influence another by force of character, also known as charisma. A manager may be admired because of a specific personal trait, and this admiration creates the opening for interpersonal influence. A manger that is talented, or even just plain likable, may be described by employees as inspiring and motivating. COMPARISON AND CONTRAST OF LEADERSHIP STYLE OF TWO BUSINESS LEADERS The two business leaders being used for this assignment are Steve Jobs, CEO of Apple, based in USA and Sheikh Hussein Al Banawi, CEO of Banawi Industrial Group, a business functional in UAE. Steve Jobs, the CEO of Apple Computers, is one of the most renowned leaders of the world, known for bring breakthroughs in the company, and for giving it the success and financial returns that it needed. Steve was very highly seen by all his employees, and he was the source of their motivation and inspiration. (Imbimbo, 2009) Steve, as a leader, always tried to teach consistency to his employees, whether it was of aiming at something or in putting efforts in a task. When Mac came, it revolutionized the industry, and thus, there were a lot of odds which were against them. But the team worked really hard and fulfilled their dreams. Steve Job was a great leader, and inspired his team to struggle hard, and gain the vision that he had. It was as if the process of the development of Mac was such a major event, which allowed everyone, whether they were the non-managers or the managers involved, to develop great memories and get inspired by the leader. Moreover, Steve had the information power, that is, he was a creative genius himself, and possessed the power to inspire others with the knowledge that he has. This gave him position power as well as personal power, since his personality was quite awe-inspiring to give others such an impression. It was his research and efforts which led to the Macintosh getting the interface, which became the standard for the software industry. 2 The other CEO which will be discussed is Sheikh Hussein Al Banawi, who is a leading industrialist. Banawi, also Chairman of the Banawi Industrial Group believes in the fact the true leaders are those who care much more about the process with which they lead their employees and the course of action that they chose to play the game of leading. It is not that important to win and whining upon loosing are not one of the characteristics of a leader. (Leick, 1984) He believes that every leader has to choose between leading by using his authority or leading through his personal aura and the way he communicates with his employees on an interpersonal level. A leader can either be authoritative or he can be nurturing. Banawi believes in the latter style of leadership, and practices it too. Banawi has the possession of such expertise, which actually helps the many companies that he is associated with. Moreover, he also is a very experienced man, being part of many diverse companies, and having the knowledge about diverse sectors. Such knowledge then also plays a role in inspiring others. Decision making for Banawi has always been very intense, where he takes care of all the pre requisites, before finally sealing the deal. It can be seen that irrespective of the company or the culture, a true leader is one who uses his charisma to influence others and never uses coercive power or an autocrat style to command others. Leader is one who nurtures other to grow immensely, through the tasks and the experiences he gives them, finally making that person a true replica of himself. REFERENCES Book Dale, E. (1969) Management: Theory and Practice. Rex Bookstore Inc. Breen, B. (2007) Management. Harvard Business Press. Northouse, P. (2009) Leadership: Theory and Practice. Sage. Imbimbo, A. (2009) Steve Jobs: The Brilliant Mind behind Apple. Gareth Stevens. Leick, G. (1984) The International whos who of the Arab World. University of Michigan. Journals Leadership Competencies. Harvard Business School Press Books [serial online]. July 2010;:1. Available from: Business Source Premier, Ipswich, MA. Accessed May 25, 2010 Müller R, Turner R. Leadership competency profiles of successful project managers. International Journal of Project Management [serial online]. July 2010;28(5):437-448. Available from: Business Source Premier, Ipswich, MA. Accessed May 25, 2010 Read More