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Both management and leadership are needed to make teams and organizations successful. Trying to decide which is more important is like trying to decide whether the right or left wing is more important to an airplane's flight. I'll take both please! The aim of this essay is to answer the age old question as to whether management or leadership is more important to an organization. Organizations, ranging from professional to social, have been in existence for centuries and the sole purpose of any of these organizations is to grow and succeed. Thus, it is without a doubt that any organization would accomplish much without a source of management or leadership. Even though it is evident that both management and leadership are both fundamental to a successful organization, a distinction between the two should be made; although they are both similar in definition and function they do differ in importance in and effect on organizations.
Sales Management: the planning, direction and control of personal selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to personal sales force.
The term 'good' is often used to describe something of quality and skill; thus, good management simply means management that is of the highest quality and is effective in producing the greatest results for an organization: "Excellent results stem from a combination of skilled management, strategic thought and a good dose of general common sense" . Every workplace organization, whether large or small, has a manager or person in charge; whether the appointed person is able to implement good management depends on their skill and capability. Management is the major task of any manager - it involves the use of authority to coordinate and supervise the activities of others and to ensure that tasks are being completed in an effective and efficient manner More importantly, managers must implement the four key elements of management: planning, organising, leading and controlling in order to attain organizational goals . Organizational goals, whether they are sales targets or technological developments, are put in place by managers to set out the purpose and scope of an entity. Without such goals an organization would cease to exist as there would be no direction to grow or move forward. The process of setting goals and deciding how to achieve them is the planning aspect of the management function . If effective management is employed, there is a greater likelihood of managers establishing better organizational goals and contingency plans to ensure the future and success of the organization; because it will not only be goal directed but will also be prepared for unforeseen circumstances that may arise, enabling them to react effectively and efficiently (Samson & Daft, 2009). Good management also assists in the successful implementation of action plans to achieve such organizational goals by organizing, allocating, arranging and regulating activities and resources within the workplace . Leading and managing are terms often used interchangeably because leading is described as a core activity of any manager.
Leadership is an observable, learnable set of practices. Leadership is not something mystical and ethereal that cannot be understood by ordinary people. Given the opportunity for feedback and practice, those with the desire and persistence to lead - to make a difference- can substantially improve their abilities to do so.
leadership is often considered as a much more pleasant concept in comparison to that of management: "leaders are seen as charismatic and often are admired and held in high esteem, managers frequently are thought of as the organization's taskmasters with a whip in one hand and a bullhorn for screaming out orders in the other hand , portray management as "mundane, uninspiring and tactical by nature" and in addition, asserting that management alone cannot guarantee the success of an organization. Consequently, it has been argued that leadership should be favoured at the expense of management in a successful organization . One of the most important aspects of leadership is the leaders' followers argues that people would rather follow a leader than a manger, if given the option; this is not surprising as leaders tend to focus more on the people rather than any other aspect of the organization because in order for a leader to effectively influence and lead others they must work to gain the trust and respect of their followers. Thus, there are various positive reasons as to why leaders are commended over managers among the people, "hope of success, trust in the leader, excitement about a project or mission, or the opportunity to stretch oneself to the limit". Unlike management, leadership is not an assigned role or title placed on someone. The task of managing a corporation is specific to the teams of managers who are formally appointed the position whereas leaders can stem from any sector of an organisation. Therefore, managers are associated with formal authority which means people secondary to them in the organizational hierarchy may view managers as intimidating and unapproachable which further emphasises why leaders are more favourable in an organization. Yet in reality, success isn't easily achievable and so in order to attain it, compromise must occur. An organization cannot survive on leadership alone, because although a leader may possess few managerial qualities, they are unable to satisfy all the tasks of a manager. Nevertheless, as every workplace organization involves employees, it is evident that leadership is a fundamental aspect of any entity because leaders are responsible for managing the people. However, organizations are about more than just the workers, which illustrates the prevailing importance of managers to control all the remaining aspects of an organization such as goals, plans, assets and resources.
Management vs. Leadership
As previously mentioned, every organization involves employees. The McDonalds restaurant is the largest fast food chain in the world, operating over 30,000 franchises in over 100 countries worldwide. It was revealed in the 2010 McDonalds annual report that the organization employs over 1.7 million workers from all age groups across their stores. In enormous corporations such as McDonalds, with such a vast number of employees, it is expected that both leaders and managers are equally essential in running the organization because there is an equally enormous number of duties to be satisfied. However, in contrast, a small, family-owned, local milk bar may only have, at most, three employees. Clearly leadership is not as important in an organization of three people in comparison to that of one with over one million people, simply because such a minute organization does not require such a deep extent of leadership. However, it is not to say that the manager of the milk bar should not possess leadership qualities because even though there are very few employees, motivation and communication of direction must still take place in order for the business to thrive. Although both management and leadership are both important functions of an organization, a number of moderating factors determine the effectiveness and importance of leadership including size of the organization. Whereas, regardless of size or type, every organization needs a person in charge. In other words, management is important and is needed in every organization but the extent to which leadership is needed varies among different organizations.
Jim Skinner, CEO of McDonald's, is inspecting the kitchen of one of his restaurants in Oak Brook, Ill., with the rigor many of his peers might reserve for financial reports. He examines the food-preparation area as he explains, in great detail, the "review of the hash browns" that McDonald's initiated a few years ago -- and admonishes me to not touch anything. "Unless you feel like you want to have a job," he adds. McDonald's, after all, is one of the few places hiring these days.
Skinner isn't a micromanager. He's simply intensely focused on the efficiency and performance of McDonald's (MCD) 33,000 restaurants worldwide and the enormous, complex infrastructure that supports them, a managerial trait that has resulted in nothing short of a Golden Age for the Golden Arches. Since Skinner, 66, became CEO in 2004, the company has delivered an annual growth rate of 5%, with revenue topping $24 billion last year. Same-store sales, a closely watched industry metric, have climbed each of the seven years of his tenure, and in that time the stock has returned more than 250% -- even after the early-August equities selloff -- vs. 16% for the S&P 500 (SPX).
Now think of all the things that have to go right to pull off that kind of global transformation: Test kitchens need to churn out winning recipes (no more McPizzas!), the company must line up suppliers who can handle big orders, the crews have to be trained to prepare new items, and marketers must figure out a way to sell them -- all while fending off the food police who, not without merit, dog the company about the nutritional value of its fare. Luckily for McDonald's, Skinner is an operations whiz who has turned the restaurant giant into a well-oiled machine, insisting on planning and accountability throughout the company -- even hash browns are subject to review. "McDonald's has been an execution wonder," says UBS analyst David Palmer.
Under Skinner, McDonald's has become so successful that it now has a challenge only a few companies, such as Wal-Mart (WMT), face. How do you continue to grow a behemoth? Every day 64 million people in 118 countries (Bosnia was just added to the list) eat at its restaurants, which generate revenue that trumps Starbucks (SBUX), KFC, Pizza Hut, and Taco Bell (YUM) combined. From 2008 through 2010, McDonald's was responsible for 90% of the sales growth of the U.S. fast-food and fast-casual industry, according to research firm Technomic. Every month that the company ups its same-store-sales figures, which it has done for the past 99, the harder it is to lap its numbers year to year.
To entice consumers to buy more -- and more often -- McDonald's under Skinner has pursued what the fast-food industry calls "platforms" rather than one-hit wonders. (Chicken is a platform; McNuggets are the product.) McCafé, McDonald's beverage platform featuring coffee drinks and smoothies, has added about $125,000 in sales per store and is the company's biggest launch in 35 years. As McDonald's has put its major flops of the past far behind (ever try the McLean or the Arch Deluxe?), the company has gained permission from consumers to branch out into products you'd never expect to see on the menu board a decade ago -- oatmeal, for example. Geographical divisions have even gotten better at sharing ideas around the globe. McCafé originated in Australia, and now Chicken McBites, another Aussie staple, is being tested in the U.S.
Despite having more than 100 items on the menu, Skinner, perhaps more than anyone else at McDonald's, has never lost sight of the fact that the company's roots go back to the burger business. In the late 1990s and early 2000s McDonald's started acquiring stakes in brands like Chipotle (CMG). Those investments diversified the company but barely caused a blip in earnings. When Skinner became CEO, he sold them all off in their entirety in order to keep the focus on the core. "Because you're good with hamburgers, you think you can do pizzas or rental cars or an IT business or sell your know-how," says former executive Hennequin. McDonald's has been guilty of this too -- it once opened Golden Arch hotels in Switzerland. "Jim is always the guy that takes us back to 'What difference is this going to make for the hamburger business? Is that going to help? If that's not going to help, forget it.'"
Today McDonald's is better than ever at figuring out what will or won't work on the menu board, a testament to the discipline Skinner has instituted. Every new item that ends up on customers' trays has to have a strong business case that examines its profitability, the capital it requires, and how it can be built out nationally. McDonald's has about 40 products at different stages in the pipeline, and some, like the Angus Burger, can take over four years to hit the market. Products that meet the company's business-case requirements have a 90% chance of going national. During the testing phase, the company may even try out different prices by market to ensure a new launch is adding incremental sales rather than stealing share from an existing item.
There was a time when the idea of "Hamburger U," McDonald's training facility, used to elicit titters, but to Skinner, who didn't graduate from college or earn an MBA, management training is no joke. He created a leadership institute a year after he became CEO. One nine-month leadership program brings together top-performing executives to work on addressing big issues for McDonald's. Funding for another program, for all new officers, comes out of Skinner's own budget.
Skinner doesn't show much sympathy for employees who can't handle the thought of having a subordinate right behind them who's capable of tackling their job at any moment. "That's always a danger, and some people can't live with that," Skinner says. "I always like to say that my goal is to surround myself with people smarter than I am. I'm not afraid of it." And Skinner seems to practice what he preaches: At analyst meetings and on calls, he regularly defers to his No. 2, Don Thompson, who moved into his current job as chief operating officer in 2010.
Skinner isn't exempt from having a "ready now," and Thompson is widely believed by analysts to be his heir apparent. McDonald's doesn't have a mandatory retirement age, and the 66-year-old Skinner won't say when he plans to make the move. He does offer one lighthearted hint: "People always ask me when I'm going to retire," he tells me. "I say, 'When I run out of lids.'"
The profitability of an organization is not a result of good management on its own; however, management is a major contributing factor. Every organization is goal directed, and as ascribed earlier, management is the attainment of organizational goals with the use of planning, organizing, leading and controlling . The organizational goals act as an entity's reason for existence, it strives to achieve these goals in order to grow and accomplish. Therefore it can be concluded that the focus of any organization is to grow and move forward rather than to remain stationary and unproductive and thus there is an assumption that the life of the entity will be on going. The survival of an organization depends on the ability of the manager to sustain it by utilizing the effective skills of good management. The manager is responsible for making informed decisions about the welfare of the organization along with the collective resources owned. These decisions aim to not only achieve goals but to sustain and up hold the organization to ensure its survival in today's dynamic environment. Thus there is emphasis on an organization to have good management in order for the entity to survive, which also acts to highlight the importance of effective management. On the other hand, leadership is implemented as the principle dynamic force to guide and motivate subordinates to attain organizational objectives and ultimately bring change to an organization as more goals are satisfied. If effective leadership is exercised within an organization, innovation, change and transformation are easily attainable . Alternatively, Slap (2010) asserts that although leadership profits and adds value to an organization by way of innovation, it is not the purpose of introducing leadership. Rather, leadership is used as a tool to share and express important values and experiences to employees in an attempt to bring about an improved change in the workplace environment and in the attitudes held by employees. Leadership in this sense allows leaders to be more easily respected upon employees because they feel more connected with the leader, which also gives the leader greater influence to motivate and encourage hard work. Nevertheless, whichever way leadership is regarded the end result remains the same: innovation of an organization by way of providing direction to accomplish objectives . "A leader innovates; a manager maintains" without effective management to keep the organization alive it is likely to fail, and consequently leaders will be left taskless - there will be no goals left to achieve, no employees left to motivate and ultimately no organization left to innovate. This strongly recognises the importance of good management and the added advantage it brings to an organization; without good management, good leadership will be ineffective and futile.
Conclusively, although leadership and management are functions that must be applied to any successful organization, effective management has prevailing importance. Theoretically, management is defined as the attainment of organizational goals through planning, organizing, leading and controlling . Thus it is clear that leadership is encompassed in the task of management so if a manager can perform their task effectively, leadership is likely to follow. However the reverse is not true, as to lead is to influence, direct and motivate others to achieve goals, not to control so management is not a facet of leadership. Management is often considered as a control mechanism in an organization which some tend to find intimidating and off putting which is why leadership is usually the preferred, softer option . However, the focus of leaders is often on the people but people are obviously just one aspect of an organization which is why managers are more important because there are so many other features of an organization to be controlled. By influencing people to complete tasks effectively and efficiently, leaders bring about change and innovation in an organization. However, without management acting to sustain organizations in today's turbulent environment, there is simply no place left for a leader . Finally, the essentiality of leadership in an organization depends greatly on the size and type of a corporation whereas management is equally important in any and all organizations. These points clearly demonstrate that good management is more important to a successfully running organization than good leadership. All in all, if an organization were given an ultimatum between a good manager and a good leader, the good manager is likely to prevail.