Leadership and Management Report for SME Organisation

2266 words (9 pages) Essay in Management

08/02/20 Management Reference this

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Table of Contents

Executive Summary

Introduction

Key Differences between Management and Leadership

PESTEL Evaluation

Conclusions

Recommendations

References

Appendix 1

Situational Leadership Model (SLM)

Appendix 2

Mintzberg’s Organisational Model

Appendix 3

Outline of the Organisation

Executive Summary

I have reviewed the Senior Team leader of my current organisation and evaluated whether or not, with the current business conditions, if the organisation is running at its most effective.

The review established that although management had a vision for which he wanted the business to get to and the employees he wanted to recruit, there were two key recommendations in which the company should utilise to help transform efficiency.

The conclusion to this report is to employ a more effective leader based on stronger supervisory attributes and a restructure to the company in order take responsibility from the Senior Team leader in order for him and the workers to be more effective.

Introduction

Within this article, we will be reviewing theories from a few academic thinkers, philosophers and logicians over the past century, structural models and environmental impacts on the business. Once studied, we will be able to make a distinction between the differences between management and leadership, the styles described and to effectively make proposals for, if required, my organisation.

See Appendix 3 for an outline of the key features for the organisation.

Key Differences between Management and Leadership

The Oxford Dictionary defines management as ‘the process with or controlling things or people’ (Oxford Dictionary 2018)   whereas leadership is defined as “the action of leading a group of people or organisation” (Oxford Dictionary 2018)

The quote below is from a management consultant called Peter Drucker and in my opinion, this highlights the three challenges management have in organisations. The leadership is the vision and driving force behind making it a success.

“Only three things happen naturally in organisations: friction, confusion and underperformance. Everything else requires leadership” (Peter Drucker, no date)

Mayo, an organisational theorist, hypothesised that morale, motivation and social needs are the main influencers to succeed in management. His Hawthorn Studies show that productivity is depended on conditions within the workplace, whether it is allowing workers to work in groups, regular rest breaks or making the workplace aesthetically pleasing. This gives the workers job satisfaction but the unsupervised ‘Laissaz-faire’ leadership style this requires could result in loss of purpose and risk low productivity.

If we compare that to Urwicks management theory, that is militarised and authoritarian. It focuses on getting organisations structures correct with all roles defined within their own specific areas. This theory focuses on sole supervisors who have a clear line of authority to all in their group and therefore responsibility lies exclusively with them. Many organisations favoured Urwicks Theory but the underlining social and environmental ethics on morale, job fulfilment and pay has made this Theory outdated. If implemented in an organisation, an autocratic leadership approach would be required which would give you faster decision making process, though the disadvantage would be unhappiness in the workplace and therefore low productivity. 

McGregor’s X and Y Theory highlight notions that managerial style can be affected by assumptions on people’s incentive to work and these can be polar opposites. The first, Theory X Manager, alleges that all workers are lazy and therefore shy away from accountability in the workplace, thus needing additional incentives and direction. Whereas, Theory Y managers believes that workers are well-organised and able to be given more independence so that they flourish and contribute to the organisation.

Having reflected on the above three management theories, it’s clear that management and leadership are different. Firstly, management is the formula of the company or the organisation in which it works whereas leadership is the action in getting the workers involved within the system but leaders are reliant on. Secondly, the attributes are different between management and leadership. Visionary, the ability to communicate and influence are key skills that is very rare to see in a manager.

PESTEL Evaluation

I’ve taken the opportunity to sit down and discuss all external factors with the MD to analyse the form of management structure in place.

The PESTEL framework (Political, Economic, Social, Technological, Environmental and Legal) is used to define the environmental factors affecting an organisation; this teamed up with a SWOT Analysis (Strength, Weaknesses, Opportunities and Threats) also assists companies with a better idea of external threats or strategic opportunities

Below I’ve provided a summary using the PESTEL framework for my organisation:

Political: As an SME company, the political impact is low and rarely a deciding factor in management planning. However, policy that creates more construction opportunities (e.g. HS2, increased social housing) does have positive effects. Conversely, Brexit has brought uncertainty to the property market which is damaging to the industry.

Economic: Economic influences such as inflation or increased rates rises will have an effect. As an SME, the management should be aware of significant economic shifts and plan their marketing accordingly. For example, high interest rates affect the housing market which suggests a move away from house surveys and a move into the social housing market. Overall construction costs such as transport, labour and materials can contribute to more expensive projects which can hinder viability.

Social: The leadership the RICS for continual professional development (CPD) and the wider agenda for equal opportunities which influence companies planning on training and recruitment. Economic factors such as inflation lead to a potential increase in wages with the higher cost of living.

Technological: As an SME, investment in new technology is expensive and time consuming; therefore every investment is carefully considered. BIM (Building Information Modelling) and computer generated images are such technology that is becoming important in the management of new projects. ‘Green’ issues are also becoming the main topic and constant R&D within the construction sector is essential in the quest for climate control.

Environmental: The company is currently heavily involved with zero carbon techniques and invests into this in a practical sense via a current construction project. This approach is to be disseminated to the industry and is a future strategic target for the company to move into over the coming years. Recycling in the office and integrating sustainability in construction projects is now a major consideration in policy decisions.

Legal: SME companies can find legislation onerous particularly employment, H&S and financial obligations within the workplace. Despite this, an SME must keep on top of current legislation changes and employ suitable resources, e.g. accountants, solicitors to support the company’s compliance.

Conclusions

Within my organisation, we use McGregor’s Theory of manager Y and Hersey-Blanchard situational leadership model combined. When the company was created, the main vision for the managing director was that each member of staff is able to work independently without the need for supervision and furthermore, accountability and integrity was important. The views of the MD are to give his workers motivation, support and the ability to grow as a person, thus making themselves their own supervisors to manage their own workloads. Under the SLM, Situational Leadership Model (Appendix 1), from Hersey-Blanchard, the managing director falls under the S3 category which is very supportive but lacks giving clear direction. These management styles are implemented due to the nature of the business, the management’s previous experience and the managing director requirements of certain attributes within each employee they recruit. 

Although a charismatic leader who likes to builds relationships and gives his workers belief in their work, ultimately lacks structure and control throughout the business and his workers. This would conclude that his over trusting country club approach with management is due to his inability to effectively manage.

Recommendations

Having reviewed the influences on management, leadership and strategic objectives throughout this report, I’m able to make the following conclusions on the changes which I would propose in order for the organisation to maintain growth. I would maintain that McGregor’s theory is still the correct concept to be effective but I believe that firstly, a hierarchy restructure between managing director and the workers is needed. Secondly, a structured stance on current leadership attitudes which would swing the management style nearer to McGregor’s Theory X.

In my opinion, it is vital that the organisation appoints a mid-level manager who’ll sit between the workforce and the managing director to communicate and support between both. Although the business is small, the structure would need to be adjusted from the Direct Supervision to the Standardisation of Work models (Appendix 2 and 3). Mintzberg’s Organisational Model is comparable to the current business model in the organisation. I believe that a structured approach with a democratic leadership style would be beneficial as it would increase self-development, direction and subsequently increase productivity. 

McGregor’s Theory X – Y, although extremes of leadership styles, could lead the organisation to a better outcome but this is dependent on the quality of leadership rather than management function. Experiments made in 1939 from Kurt Lewin concluded that a democratic leadership style was the most effective over an autocratic and laissez-faire style. I believe with a mid-level manager operating between the MD and the workers; it would give the office a balanced leadership and structured approach

The middle management would essentially free the MD to carry out the entrepreneurial function of the business (strategy, marketing and business development) whilst the middle manager managed the legal, ethical and economical compliance of the business leaving the workers to carry out the technical duties under the supervision of the senior management. This is recommended in the E Myth book (Michael Gerber, 1986) which separates different management duties according to their skill sets. In our case, the MD is highly technical and entrepreneurial but not necessarily an efficient manager, hence the requirement for a good mid-level manager to cover operations.

Reference List

1)      Management. (2018). In: Oxford Dictionary. [online] Available at: https://en.oxforddictionaries.com/definition/management [Accessed 12 Nov. 2018].

2)      Leadership. (2018). In: Oxford Dictionary. [online] Available at: https://en.oxforddictionaries.com/definition/leadership [Accessed 12 Nov. 2018].

3)      Kouzes, J. and Posner, B. (2013). Great Leadership Creates Great Workplaces. San Francisco: Wiley.

4)      Mulder, P. (2012). Situational Leadership Model (SLM). [online] Available at: https://www.toolshero.com/leadership/situational-leadership-hersey-blanchard/

5)      Gerber, M. (2003). The E-Myth Revisited. New York: HarperCollins

6)      ManagementMania.com. (2018). Mintzberg’s Organizational Model. [online] Available at: https://managementmania.com/en/mintzbergs-organizational-model [Accessed 12 Nov. 2018].

7)      Mullins LJ, and Christy G (2013) Management and Organisational Behaviour (10th edn) Harlow: Pearson Education

8)      UCEM (2018) People and Organisational Management (2nd edn), Reading; UCEM

Appendix 1

Situational Leadership Model (SLM)

Appendix 2

Mintzberg’s Organisational Model

Appendix 3

Outline of the Organisation

My organisation is a twenty year old SME chartered surveyors firm that was build up by the managing director. He employs eight operational workers and support staff within specialised areas. He has over 40years of experience in all aspects of surveying and project management and is a Fellow of the Royal Institute of Chartered Surveying.

The company project manages house builds for 6 million pounds, heavily involved with social housing developments and undertakes expert witness, adjudication and mediation work due to the managing directors time served in the construction space.

Within the operational staff, there are three quantity surveyors, three building surveyors and two project managers and all currently report to the managing director.

Current Organisation Chart

 

Proposed Organisation Chart

Word Count : 1470

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