The Small And Medium Sized Enterprises Business Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The word leadership can be explained as a process of playing a leading role by an individual in any business or anywhere which includes a group of people working collectively to achieve certain goal by motivating the group members for the better and easy way to achieve their target. Let us take an example, suppose in company like any supermarkets the managers are been in charged in every branches as a leader and they have the responsibility of managing the branch by cooperating with the staff members. It is a single company but may have each different leader in every different branch. Meanwhile if it is a small company the owner himself/herself may play a role of leader. Every people are assigned with different task which combinely work for the betterment of the firm. Depending upon the type of job the task of the leader may vary but overall the basic roles of the leader may always be the same. Leader always has the motto of instructing the staff and motivating the members in the working group for hard working and focusing on the target. Now we are going to discuss about the qualities or roles which a leader should have on them which can make them as a successful leader. They are explained below:

Figurehead: Its means the leader should be the person leading the organization. He/she should represent the organization to the outsiders wherever necessary. People should look up to them as a person with authority and as a figurehead.

Leader: This is where they can provide leadership for the team or the group. Either their team department or an entire organization. And it is where they manage the duties and responsibilities and performance for everyone in the group.

Liaison: Liaison simply means the communication of the leader with the outsiders and insiders. He/she need to communicate effectively with the external and internal contacts on behalf of the organization. They should be fluent in the language and also the capable to explain about the organization towards others.

Monitor: Monitoring means to view the activities going on inside the company. Any information needed for the company needs to be collected. They should always be ready in accepting changes as well as monitoring the team In terms of productivity and their well being.

Disseminator: They have to disseminate external information through the liaison role and internal information through the team useful for the organization.

Spokesperson: As they represent the company to outsiders they should represent and speak for the organization. They should be responsible for transmitting information about the organization and its goals to the people outside. e.g, board, public, stakeholders.

Entrepreneur: It is to create and control changes in within the organization. This means to solve problems if any exists, generating new ideas and implementing them.

Disturbance Handler: Any unexpected disturbance between the team or in the organization must be handled properly. Media disputes must also be handled by the leader.

Resource Allocator: The best possible application of the organizational resources must be determined. They should decide to allocate money, time, materials and manpower and should also authorize decision before their implementation.

Negotiator: They should take part in any important negotiation within the tea0m, department or the organization.

Above we have described about the definition of leader and the qualities or responsibilities a leader should have. Now focusing on the topic of the assignment we will be describing about the role of a leader in the context of small and medium enterprises and the measurement of the success.

1.2 Differentiate between leaders and managers.

Leader: leader is the person who leads or commands a group of people for certain prospective. He/ she is the person who influences that group of people in achieving their common goal. As in economy the common goal is in generating profit. They all have the same motto in working in co-operation with each other. The leader should have those qualities in them in influencing the group member. The leader may or may not have full authority. Leaders are focused on what and why. A leader sets a vision for the company and enables others to see that vision and want to strive towards it.

Managers: managers are the persons who are in charged to overall look after if the organisation. Managers tends to focus on the things like how to produce more, do the assigned job faster and how to perform the work in a better way. The main focuses of the managers are how to perform and why to perform.

Gathering from a few different resources and articles, there are significant ways in which leaders and managers can be differ:

Managers administer - Leaders innovate

Managers demand - Leaders command

Managers maintain - Leaders develop

Managers focus on systems - Leaders focus on people

Managers strive for control - Leaders inspire trust

Managers have short-term view - Leaders have a long-term goal

Managers are focused on the bottom line - Leaders are focused on potential

Managers imitate - Leaders originate

Managers do things right - Leaders do the right thing

Managers state their position - Leaders earn their position

1.3 Depending upon the size of the enterprise the role of leader may vary. Small enterprises may have a less thing to be handled meanwhile medium and big enterprise may have more duties and responsibilities for the leader. The fixed roles for the leader in a small enterprise may be less than that of a medium or a big enterprise. As in a small enterprise there won't be much number of manpower to be handled, much things inside to be monitored, new plans are not implemented much and they don't have to interact with the public or outsiders as much as the medium or big enterprise meanwhile in context of a medium or a big enterprise there are various tasks to be performed as well as various areas to be monitored. Involvement of more number of manpower may also be an additional task for the leader. They should be looking after more tasks performed by many staffs at different levels. Not only in a size of group they may have more disturbances as well which needs to be sorted. They should be representing the enterprise to different person or other function more often than the small enterprise. The numbers of new plans needs to be implemented for the betterment of the enterprise which needs to be implemented. And even more resources needs to be allocated compared to that of small enterprise. So these are the roles which a leader in a small enterprise varies with context of medium or big Enterprise.

As we already said that the measurement of success in an organization depends on how successful the organization is in achieving their organizational goal. The goal of the enterprise may vary from one to other. Small enterprise may have small goal whereas bigger or medium enterprise may have their bigger goals. If we generally talk about the success of most enterprise in today's business world is of generating profit. So depending upon the amount of the profit they generate their success can be measured. Small enterprise may make less profit while as big or medium may make more profit. Overall the amount of profit may be increased by implementing new ideas and plans as well as minimizing the amount of expenses incurred inside or outside the firm.

We have discussed about the types of success measurement in small and medium enterprises. Now we will be discussing about the how a person can be a leader and role of followers in establishing a successful leadership profile. Leader is the person who leads the organization. He/she should have many characteristics in them to become a successful leader. We had discussed about the 10 managerial roles a leader should have to lead an organization towards success.

According to Mintzberg 10 managerial roles mentioned in his book, "Mintzberg on management: inside out strange world of organization," in 1990. These roles are divided in three categories as follows;













Disturbance Handler

Resource Allocator


We had already discussed about the roles of the successful leader. Now let's take a short look at the category about where these roles are divided;

Interpersonal category includes the roles about providing information and ideas.

Informational category includes the roles about processing the information gathered.

Decisional category includes the roles about using the information wherever necessary.

We will be discussing about Bass' theory of leaders which states that there are three basic ways to explain how people become leaders (Stogdill, 1989; Bass, 1990). The first two explain the leadership development for a small number of people. These theories are:

Some personality traits may lead people naturally into leadership roles. This is the "Trait Theory".

The trait approach to personality is one of the major theoretical areas in the study of personality. The trait theory suggests that individual personalities are composed broad dispositions.

A crisis or important event may cause a person to rise to the occasion, which brings out extraordinary leadership qualities in an ordinary person. This is the "Great Events Theory". According to the Great Events theory, a crisis or an important event may cause that an ordinary person may emerge with his/her hidden talents and.

People can choose to become leaders. People can learn leadership skills. This is the "Transformational or Process Leadership Theory". It is the most widely accepted theory today and the premise on which this guide is based. Bass defined transformational leadership in terms of how the leader affects followers, who are intended to trust, admire and respect the transformational leader.

He identified three ways in which leaders transform followers:

Increasing their awareness of task importance and value.

Getting them to focus first on team or organizational goals, rather than their own interests.

Activating their higher-order needs.

1.4 Influence on leadership behaviour by situations, personal and organisational values.

Influence of leadership behaviour can be explained easily through "John Adair's Action Centred" leadership theory.

John Adair, born 1934, British, developed his Action Centred Leadership model while lecturing at Sandhurst Royal Military Academy and as assistant director and head of leadership department at The Industrial Society. This would have been during the 1960s and 70s, so in terms of management theories, Adair's works is relatively recent.

Adair used the original word meanings to emphasise this: Leadership is an ancient ability about deciding direction, from an Anglo-Saxon word meaning the road or path ahead; knowing the next step and then taking others with you to it. Managing is a later concept, from Latin 'manus', meaning hand, and more associated with handling a system or machine of some kind. The original concept of managing began in the 19th century when engineers and accountants started to become entrepreneurs.

This action centred leadership model which focuses on what leaders do. It suggests that leader effectiveness depends upon meeting three types of need in a working group.

They are:

Task needs; achieving the task.

Team Maintenance Needs; managing the group or team.

Individual Needs; managing individuals.

The Action Centred Leadership model therefore does not stand alone, it must be part of an integrated approach to managing and leading, and also which should include a strong emphasis on applying these principles through training.

From the above action cantered leadership model we can say that;

Managers wanting to be effective leaders should continue to strive to achieve the needs within the team.

Balance the task set whilst assumes to maintain or sustain the needs of team and the individual within it.

When making comparison with other theories, it is important to bear in mind that what each is suggesting. Often one theory cannot be used in isolation when completing the characteristics of good leadership.

1.5 Influence on leadership behaviour by the personality:

The behavioural approach to leadership was explained by Austrian psychologist "Fred Edward Fielder (1992) where he describes about the contingency theory.

Contingency theory:

Contingency theory is a theory that explains there is no best way to run a company, to lead the company or to make the overall decisions of the company. Rather the optimal course of action is dependent on the internal and external situations of the company. The organisational structure are influenced by the various aspects if the environment. There could not be one best way for the organisation.

It emphasise the importance of both the leaders personality and the situation in which the leader operated the degree to which one is affected upon the other. It is a class of behavioural theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation. Many people tend to think that a contingency is something dependent on or caused by an event by a group of people. Leadership or relationship seldom comes to mind when considering this theory.

Fielder's theory has influenced almost all management theories by denying the existence of single ideal organizational approach. His theory was based on an assessment on the dominant work style of a potential leader against a scale ranging from task oriented at one end and to relationship oriented at the other end.

Depending on the factors such as the type of work in an organization, responsiveness to change and use of technology, the organization could introduce a customized co-ordination of resource, people, and task and adopt the correct and effective style of management.

Fielder theory suggests that most situations will have three aspects which will shape leaders role:


Group confidence in leader

Loyalty to the leader

Situations are favourable to the leader if all three of these dimensions are high. That is, if the leader is generally accepted and respected by followers, if the task is very structured, and if a great deal of authority and power are formally attributed to the leader's position, then the situation is favourable.

1.6 Aspects of leadership behaviour:

As we know when it became evident that effective leaders do not seem to have a particular set of different traits researchers tried to isolate the behaviour characteristics of effective leaders. In other words, rather than try to find out who effective leaders are, they also tried to determine what effective leaders do, how they delegate tasks, how they communicate with and try motivate their followers or employees, how they carry out their tasks, and so on. Behaviours, unlike traits, can be learned so it followed that individuals trained in appropriate leadership behaviours would be able to lead more effectively. These researchers have focused on two aspects of leadership behaviour.

Leadership function.

Leadership style.

Researchers exploring leadership functions concluded that to operate effectively groups need someone to perform two major functions task related or problem solving functions and group maintenance or social functions. Group maintenance functions include such actions as mediating disputes and ensuring that individuals feel valued by the group.

An individual who is able to perform both successfully would be especially an effective leader. In practice, however, a leader may have the skill or temperament or time to play only one role. This does not mean that the group is doomed. Studies have found that most effective groups have some form of shared leadership one person (usually the managers or formal leader) performs the task function while another member performs the social function.

The two leadership functions - task related and group maintenance tends to be expressed in two different leadership styles. Managers who have a task-oriented style closely supervise employees to be sure the task is performed satisfactorily. Getting the job done is given more emphasis than employees' growth or personnel satisfaction. Managers with an employee oriented style put more emphasis on motivating rather than controlling subordinates. They seek friendly trusting and respectful relationships with employees, who are often allowed to participate in decisions that affect them. Most managers use at least a little of each style, but put more emphasis on either tasks or employees.

1.7 Ability to build team and motivate:

Team building is a philosophy of job design in which employees are viewed as members of interdependent teams instead of as individual workers. Team building refers to a wide range of activities, presented to businesses, schools, sports team, religious or non-profit organization designed for improving team performance. Team building is pursued via a variety of practices, and can range from simple bonding exercises to complex simulations and multi-day team building retreats designed to develop a team (including group assessment and group-dynamic games), usually falling somewhere in between. It generally sits within the theory and practice of organizational development, but can also be applied to sports teams, school groups, and other contexts. Team building is not to be confused with "team recreation" that consists of activities for teams that are strictly recreational. Team building can also be seen in day-to-day operations of an organization and team dynamic can be improved through successful leadership. Team building is an important factor in any environment, its focus is to specialize in bringing out the best in a team to ensure self development, positive communication, leadership skills problem solve.

There are various ways in motivating or inspiring the team members in a group. Some of the ways are mentioned below.

Public praise: We all like praise for a job well done and taking the time to give sincere and genuine thanks to a staff member in front of their peers will boost their self-esteem.

Training for all: Training is a great means of stimulation and simultaneously shows that you are prepared to invest in their development. Encourage the recipient of any training to share their new insights with the rest of the team.

Additional responsibility: Recognize when a member of your team desires and deserves additional responsibility. Smart people often crave opportunities for development, correctly calculating that the additional skills they learn make them more marketable.

Be flexible and gracious: Sometimes staff members may have to take time off unexpectedly. Try to be gracious and accommodating about such requests. In return, staff will often work exceedingly hard to make up for lost effort. Indeed, when happy they will be more productive.

Clear goals and leadership: People need clear goals for the short and medium term at work. Do your best to provide those objectives and steer them towards meeting them.

Prestige title: It costs nothing to improve someone's title but may mean a great deal to him or her personally and the way that they are perceived in the workplace.

Demonstrate integrity everyday: Nothing destroys team morale and cohesiveness more quickly than a boss who no one trusts, particularly one who plays team members off against each other. You must be prepared to demonstrate integrity and stand up for your staff at times.

1.7 How leaders contribute to organizational change:

By studying the topic dynamics in leadership we studied about the definition of leadership and what are the main roles that a leader should follow to become a successful leader. Now we discuss about what are the contribution that are leader can do with the organizational change.

These can be as:

Transparency to the colleagues: leader should be transparent about all the changes to his group members. They should be sharing all the information with the team workers.

Keep your group members hope alive: Effective leaders project an optimistic view of the future, even during times of change. Their colleagues need to know that you believe a better day is coming. However, they also need to provide a realistic assessment of the obstacles that your organization must overcome in order to reach that better day.

Keep the employee fully informed: You must keep your employees fully informed. In downsizing environments, the levels of uncertainty run high amongst employees. You must reduce their confusion, even if that means sharing some bad news. 

Tell the truth: If you try to relieve your employees' misery by saying things will calm down after the reorganization, you may be heading for trouble if that's not the truth.  Plus, the next time your organization announces a change your employees' trust will take a nosedive. Employees need to be taught how to handle changes, not be told it will soon be over.

Cut and simplify the work: if the organization has downsized, you probably cut only the workforce not the work load. So what can be done is You can't pretend things are the same.  You can, however, reorder priorities on a task-by-task basis. You can cut extraneous tasks, forms, and procedures. You can encourage your associates to take shortcuts in non-critical, routine areas to make time for more important items.