Effective Leadership The Important Aspects Commerce Essay

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Effective Leadership is one of the important aspects to meet the organisation challenges. There are heavy competitions in today's business situation, which can be faced by the flattened chain of management, multi-dimensional teams and varied operational environment. Organisation should motivate and direct the workforce through active leaders. Higher employment engagement and retention can be created through effective leadership which in turn makes the business environment productive. Socially responsible management enables motivated and productive employees. The quality of the leadership is to create and maintain loyal employee environment by way of ethical policies, reasonable compensation and proactive management. Leadership and Management are systems of actions each involves to decide what need to be done, creation of people network and relationship thereby to achieve an agenda and then try to make sure those people do their job. The difference of the two concepts is that all these tasks are accomplished in two different ways (John Kotter, 1990).


The following are the objectives aimed to cover in order to present a complete report:

To understand the concept of leadership and management and their relationship for organisational success.

To examine the importance of leadership in management by analysing the issues and identify the skills needed using various theories and practices.

To discuss leadership and management practice of Hewlett Packard Company.

To provide suggestions on how to conduct effective leadership and how the management can benefit from it.

Conceptual view of Leadership and Management:

Leadership is the key dynamic force that motivates and co-ordinates the organisation in the achievement of its objectives (Dubrin, 1997). It is an art to influence people and induce them into action. Effective leadership involves activities that develop clear beliefs, objectives, strategies, and vital process recognition and workforce participation through motivation. Management brings orders and consistency to strategic dimensions of the organisation (Crawford, 2003:63-4). It is the purpose of accomplishing the effectiveness of the organisation (Grace, 1995: 192). Management is the mixture of theories and practices which is designed to achieve to confirm the organisation's work is developed, supported and assisted by the individual or team in order to achieve the organisation's objectives effectively (O'Sullivan, 2003:5).

By looking at the above definition of the two concepts it is understandable that management is the activity of controlling, directing, planning, monitoring, problem solving and resource negotiating. In-turn leadership is the activity which involves commitment, communication skills, eye on vision, flexible and understanding. Both are distinct in nature but are complementary. Good leadership can render effective management and effective management can enhance efficiency in leadership. Proper practices should be followed in order to bring the effectiveness of the two concepts

Relationship between leadership and management:

In recent trends there is a huge shift from management and leadership in an organisation with an aim of facing the rapidly changing world and gain competitive advantage. From the above explanation it is clear that leadership is one of the functions of management along with planning, organising, staffing and directing. Leadership is an individual's function influencing a group of individual in order to accomplish a common objective.

Management is functioning towards achievement of organisation goals in effective way. Only with leadership, management can exist.as leadership is involved in creating and directing for the organisation culture. Management can follow the processes which are levied by the leaders. Leaders mainly analyse and strategies the activities of individuals in an organisation and management just follow those framed steps. Hence leadership and management are intertwined factors for an organisation to operate efficiently. Leadership is about the creation of system which management follows to achieve the organisation objective. The below are theories of management and leadership. I have made an analysis of Hewlett Packard (HP)'s leadership and management styles and their initiatives.

Overview of the issue:

The Hewlett Packard company (HP) is a multinational corporation having it's headquarter in California, United States. It is one of the largest Information Technology Company operating in major countries. They are involved in the development of computer, data storage and networking hardware and delivers software solutions. HP and Compaq merger took place in September 2001. After the merger, initially the stock price of HP had a great fall because of the disbelief of the employees and investors of the two companies. It had a fall from 2# ranking to 9# but after two years of merger at 2003 jumped to 3# in best employer ranking and became the global leader gaining its employees and investors satisfaction. Now I am going to analyse the leadership and management strategy followed by HP to create strong employee engagement.

Theories of management:

Theories are outlooks with which individuals make sense of their experience (Stoner et. al. 1995). It includes concepts and principles which are interdependent and provides important area of knowledge. Modern theory of management helps to understand the organisation environment in the changing world. Following are different theories of management.

6.1 Scientific Management Theory:

This is referred by Frederick Taylor for the modern era management. According to this theory, the workloads are evenly divided among the management and the workers. Management took the part of instructing and workers in the part of labour and both by doing their tasks effectively. This theory will be a success from a economic point of view as it replaces the rule of thumb with science of work. It involves the following methods,

Comparing the performance with the optimum goals. Rewards are given for success and loss of earnings for failure.

Workers are selected and trained scientifically to achieve the goals.

These selected and trained workers results in the science of work where the work is shared between the management and workers.

6.2 Classical Management Theory:

This theory was developed from the works of Max Weber's bureaucratic theory and Henri Fayol's administrative theory. Under weber's bureaucratic theory, the organisation's functions should be carried out with set of rules. The rules includes fixed and official jurisdiction, structures hierarchy, authoritative lays with official position and not with the individuals and management through written records. But the more bureaucratic will result in depersonalise hence he formulated impersonal organisation where little human interaction is allowed among the members. While Fayol focussed that personal effort and dynamics of the team can make a perfect organisation. He developed fourteen administrative principles to carry on the five management functions like planning, organising, commanding, co-coordinating and controlling. He emphasised the above management function as a granular level.

6.3 Behavioural Theory:

This theory developed from the works of Elton Mayo. This behavioural theory proved the failure of Taylor's scientific theory. Group dynamics and the social environment of the organisation is a key factor affecting the productivity level. The origin of this theory was based on the Hawthorne works experiment, where it was proved that there is no correlation between science and productivity, Mayo undertook an experiment relating to the social makeups and productivity through the women workers and number of rest breaks which proved the importance of informal group in the organisation's work place. And now in many organisations there are many concepts like Teamwork, Social system, group dynamics which have the base of Behavioural theory.

6.4 System Theory:

This theory focused on the classical scientific theory along with the behavioural theory. System theory focuses on the relationship and interdependence between the management structures and the human behaviour creating various variables in the organisation. A system is sharing of feedback among the input, processes, output and outcomes. With the rapidly changing environment this approach is followed in many organisations as it enables the management to recognise the different variables of the organisation and their interrelation.

6.5 Contingency or Situational Theory:

According to this theory, there is no best way of organisation structure which may vary according contingency and organisation variable which influences its structure. Individuals choose different management structures which are appropriate to their organisation variables. The contingency includes organisation's size, technology and the operating environment.

6.6 Neo Human Relation Theory:

This theory was making of the famous sociologist Maslow, McGregor, Herzberg motivation hygiene theory and Likert. This theory mainly focuses on satisfaction, intensive and intrinsic. Maslow proposes the hierarchy of needs for human which should be satisfied according to its urgency. E g. Monetary rewards. But this does not apply in all circumstances as there are more than monetary terms which makes the individual work for. McGregor theory is where the manager makes assumption of the employees in two distinct noticeable nature in name of theory x and theory y. this is applicable to certain extreme as individuals can be separated in two extremes. Herzberg dealt with two factors namely the motivator which gives rise to satisfaction and hygiene which gives rise to dissatisfaction. His work emphasised of increasing the motivation and to create organisation structure containing higher number of motivators. Likert dealt with the patterns of manager's behaviour whether to be task oriented or people oriented. They can be exploitative-authoritative, benevolent-authoritative, conductive or participative group.

HP management theory:

HP uses scientific theory to some extent. They recruit exceptional individuals and provides opportunity to develop their capabilities based on the benchmarking which is related with the company's strategy, hence the company goal has been shared between the individual to attain their roles and the management to take directive measures to attain the relayed goals, This theory is considered are depriving humanisation hence HP followed combination of another theory in order to make the organisation success. Along with the scientific approach HP follows behavioural theory, whereby it employs activities which could enable the task of relationship building. The organisation conducts 20% of its development program which are relationship based like job rotation, special projects and cross-functional team. As they follow the combination of both scientific and behavioural theories, they are considered having system approach.

HP follows the theory of Management by objective. HP as an organisation provides training and development to enable their employees to achieve the organisational goals. They follow by way of Global Learning program where the Employees learning and function are aligned against the HP's strategy. The employees satisfaction is given importance in certain case by adopting Neo-Human relation theory e g. the employees are allowed to draw the design of their future roles and their expectations with HP. The name of the role is disclosed only after verifying the feedback.

Leadership and its importance:

Changes are common in an organisation hence the employees should also be able to adapt to these changes to enable the organisation growth. A leader should be competent to make his employees adapt to faster developing changes and also render satisfaction in their work. Leadership makes the employees to work in reality of changing environment and bring vitality to the people in organisation.

There is a famous saying "leaders are born and not made". but I don't accept the statement and according to me proper learning and training should be made and it should be a continuous process to render effective leadership. Leadership can be seen at any levels of organisation form lower to higher level management. The quality of leadership can be build by management initiatives. There are various theories based on the leadership and I have drawn examples for each and identified disciplines.

Theories of Leadership:

There are 8major theories in leadership which deals with the situational factors and the skill level of the leader and also difference in qualities between leader and his follower.

9.1 Great-Man Theory:

This theory got its popularity during 19th century. In this theory emphasis that leadership is inborn and not made. According to great-man theory leaders are born with right characteristics and inspirations. As many great leaders are found to not financially strong it believes they would not had the opportunity to practice and were born with inherit qualities. For Example: Mahatma Gandhi who was known for his peaceful approach is a great leader who was born with inherits ability. Hence individual who has the quality inbuilt can take up role of a person in right job and as a good leader.

9.2 Trait Theory:

This is similar to great-man theory that considers people have certain traits and qualities that are inherited. The traits can be the physical appearance or specific behavioural characteristics. This theory is not applicable as every individual has specific traits or characteristics and not all leaders. There are different tests that can be undergone to know the strong traits which are practised in many organisations as part of Human Resource Development activity.

9.3 Contingency Theory:

According to this theory, the degree of successful leadership depends upon various factors like leadership style, the follower's quality and the situation. It can be either successful or not depending on the environment.

9.4 Situational Theory:

Leaders choose different kind of leadership style depending on the situation which could help in some type of decision making. Example: if the followers are skilled democratic style can be chosen where the followers take the main role.

9.5 Behavioural Theory:

In this theory leaders are not inborn rather made through teaching and observation. It believes that the ability of leadership can be built through interaction with the environment which could shape it. Many organisations believe this theory and offer learning to mould the employees as good leader.

9.6 Participative Theory:

In participative theory, leaders encourages participation and contribution of the followers in various aspects like decision making and believes leadership can be ideal only with the participation of its followers which can make them more committed to work.

9.7 Management Theory:

This theory focuses on supervising, organising and group performance. It emphasis offerings rewards on successes and punishments on failures. This is like giving and taking policy. Followers are not encouraged for innovation rather has to follow set of rules and instructions laid. This is also called transactional theory.

9.8 Relationship Theory:

This is based on the relationship between leaders and followers. This theory involves the activity of motivating, performance improvement of every member. This type of leader often has high moral and ethics influencing the followers and becomes the role model of those members. This is also known as transformational theory.

Leadership Styles:

Leadership Style

Charismatic Leadership

Laissez-Faire Leadership

Transactional Leadership

Democratic Leadership

Autocratic Leadership

FIGURE1: Leadership style is the behaviour pattern of the influencing person

SOURCE :(Peter G. Northouse, 2010)

The above picture shows the different styles of leadership.

Autocratic Leadership: In this type of leadership style, the leader lays strict regulations of policies and procedures and maintains close watch on the followers. This is applicable where the followers are less skilled than the leader.

Democratic Leadership: the leader following democratic style promotes interest among the followers and practice social activity. They encourage and involve their followers in decision making. This is one of the styles which can offer high productivity in today's modern world as individuals seeks their involvement in the management operation and offers commitment.

Laissez-Faire: In this style the leaders delegates the task to the followers with some or no direction. This style can be successful only when the followers are skilful.

Transactional leadership: this style is followed through motivational factors like rewards or punishments. This style cannot be successful as the followers don't have relationship with management.

Charismatic Leadership: this style concerns on relationship. This is the style which can be applicable in the modern changing world. Here the atmosphere is created favourable for the followers and the leader charms to admire the followers.

HP's Leadership approaches and success:

An individual can use two or more leadership style. Mark Hurd, CEO of HP uses a combination of leadership style for the management of HP. Mark Hurd mainly follows the participative leadership style as he believes commitment can be bought through participation of employees in decision making and values employees as a vital factor. For this he has given an accessible right for all employees to visit any department in the company and can make initiatives to learn. And believes they can learn the leadership quality through this and encourage them in the participation of decision making with feedbacks. This approach is based on the combination of Behavioural theory, Transformational theory and participative theory of leadership. As management occurs in groups, leadership also can influence the people in groups and enables to a have programmed shared objectives with regard to the organisation strategy.

The management and leadership style followed by HP made it to gain the employee satisfaction to 2# from 8# and 40% growth in employee strength in 2003. The system theory of management and participative theory of leadership had made HP to achieve its in terms of objective and employee satisfaction. Its initiative made for developing leader has created close relationship and attachment between the management and employees. It enabled to create loyal employees and great leaders. The CEO openness to employees and following democratic leadership style enables the employee satisfaction. A study shows HP all employees are pride to work in the HP work culture that is the system approach. Thus Kotler saying has been proves that leadership and management are two distinct factors complementing each and are necessary for the organisation for its success.

Leadership development:

As in recent trends many organisations have progressed into knowledge economy, leadership development has gaining its importance. The sharing of knowledge and views from the employees is important in today's modern organisation. HP has framed leadership which an employee can begin once they join the company. The program is designed for the HP mangers to improve their performance and to lead the company at best way. The leadership program includes many different programs like leading for results which was for the HP mangers, talent program for high potential leaders and director rotation program for high level management people. HP focuses on the development of leadership models, talent, values and thereby organisational culture.

Practical exposure:

During my under graduation in one of my management elective class my lecturer gave me an exercise to identify my interest of leadership. He divided my class rooms into five parts. I was one in the group of 6. The lecturer gave us separate activity like marketing, cooking, buying etc. I was under the activity of buying. I was asked to complete the task as a team. I took up the part of deciding the product and sourced available and the other to analyse the price, quality and variety. Once I shared in the class the lecturer said I have good leadership style as I took up the lead and basic part in the activity.


HP is successful in creating emotional attachments with its employees thereby building loyal customers. But there are some advantages in this concept as it make the employees to act on emotion aspects and not on facts. This is another way of depleting employees, as employees tend to avoid new opportunities because of their attachment. Also employees who are low skilled cannot be judged and act on their own which can affect the organisation. I advise that HP should also adopt other leadership styles like autocratic style as some individual can be controlled by bossy style of leadership. Instead of concerning for people who perform the task, leaders can concern for task in the crisis situation as concern for people cannot work at all times.

The concept of leadership and its styles should be made understand by the employees to recognise their leadership style and the development needed. Activities which can make them understand the concepts and analyse their critical thinking upon them can be conducted as a way of classroom training.


After having study about different leadership and management theories and their styles, it is understandable that none of them are perfect and it mainly depend in the situation where individuals operate. I conclude saying every individual should recognise a perfect style that can match the situation and the organisation working for. And every organisation should adapt the opt leadership and management theories and styles according to the changing situation. The key factor is not to find the good leadership style but to lead the followers as best as they can. In today's changing world leadership style should 99-poiii4

Matching of leadership style with the stated situation should be done in order to avoid any sort of wrong evaluation. Incorrect citation of the management and leadership will only bring some adverse effects on the organization in this uncertain economic environment. Taking a beneficial strategic decision for an organization is highly critical. Relevant answers to the questions involved while making decisions like, what sort of leadership style should be involved or where your market orientation lies must be figured out without any trace of confusion.