The literature review will start by a brief definition of leadership and current leadership approach. It also specifies the concept of modern management which will be discussed with directive towards the modern management approach and capabilities. The relationship between the leader and follower will be explained. In additional to that changed nature and perception changed from the modern face of the businesses will be explained. Current leadership, modern management approach and the current practices of businesses in today’s market place are defined and the literature will explore how current leadership and modern management are inter-related or overlap; considering the global concept or face of today’s businesses.
2.1.1 Leadership: As a Definition
In last 60 years, scholars gave 65 different definitions regarding the dimensions of leadership (Fleishman and others., 1991) and also difficult to understand as it depends in which it is classified and perceived. According to Buchanan and Huczynski, (2007), Leadership is symbolized as power, authority and influence. Moreover, the organizations of current business concentrate mainly on the building of team, formation of the networks, and to plan knowledge to achieve a common goal. In the competitive business world leadership seems to be diminishing due to the usage of power and authority when taken in to consideration. In the present trend leader is considered as an individual with the goals and ability to lead the bottom hierarchy to reach the goals of an organization. Another definition given by Northouse (2007) defines leadership as “Leadership is a process whereby an individual influences a group of individuals to achieve a common goal”. Bass (1990, pp. 11-20) also defined the term leadership as, “a process where the leader is at the centre of group change and activity and embodies the will of the group.” During the period several scholars gave various theories of leadership and author will explore more about the theory widely accepted and most relevant leadership theories which are adopted by modern business practices.
Management and leadership have some common characteristics; leadership has been defined as a “process of influence leading to the achievement of desired purposes”. Whereas management involves, “the efficient and effective maintenance of an organization’s current activities, and the implementation of policies” (Bush and Glover, 2003), which differentiates it from leadership. The theories of leadership suggest that an effective leader has a great influence on the team and the organizational goals as the behavior of the leader influences the behavior of an individual. Burns (1978) proposed two forms of leadership in particular which compromises transactional and transformational. Transactional leadership focuses on the real motives or goals of the organization, be it political or managerial and concerned about the overall organizational development (Burns., J.M, 1979, pp.11). The transactional leaders and followers’ exchange of needs and services are to accomplish independence objectives (Sergiovanni, 1991).
In transformational leadership, a leader engages with others and creates a connection that surges the level of motivation and morality in both the leader and the follower (Northouse, 2007, p. 176). The transformational leadership theory relates to the intellectual stimulation and charisma of the individual leaders (Bass, 1985). The transformational leaders have the ability to create support for their vision by empowering others to take responsibility and powerfully project it. According to Bennis (1993), transformational leaders penetrate the soul of others and affect their awareness to strive for greater ends. Thus, it is challenging to create a leadership talent pool. Leadership activities can be demarcated, defined or outlined and learning opportunities created. Still certain qualities are specific and needs to be selected into the talent pool and needs development at personal level than professional or technical. There is a growing recognition that there is a need to acknowledge the importance of leadership feature for organization’s competitive edge (Gibbons, 1999). It is essential for betterment of the current practices and also for transformation of the organization for the future. This learning is sustained or exists in the organizational processes and systems and not just in individual minds of its members and the leadership that solely relies on the heroic efforts might not be sufficient when changes are required in large systems (James., K, CEML, June 2000).
2.1.3 Current leadership approach
According to Perren., L (CEML, 2002), over the recent year there have been seen significant changes in what is required of good leaders. Those organizations will undoubtedly face serious problems in an ever more uncertain future, whose leaders do not respond to these required new ways of working. The Council for Excellence in Management and Leadership (CEML) reveal significant shortages in leadership skills such as:
â€¢ “Creating a sense of vision in a fast changing environment
â€¢ Motivating people and leading them through change
â€¢ Being innovative in products and services and ways of working.”
The best practice case studies highlighted the following six elements of inspirational leadership. They “genuinely care about their people, involve everybody, show lots of appreciation, ensure work is fun, show real trust and listen a lot” (cited in: Perren., L, CEML, 2002).
The table 2.1 reflects that the followers desire in the leaders; views of both exceptional leaders and best practice case studies findings (DTI, December 2003).
From the viewpoint of leaders
From the viewpoint of followers
â€¢ Strong communication – storytelling and listening
â€¢ Genuine shared vision
â€¢ Passion for learning and intense curiosity
â€¢ Having fun and very energized
â€¢ Real confidence and trust in their teams
â€¢ Focus on developing people
â€¢ Strong self-belief, coupled with humanity and humility
â€¢ Respect for employees and customers
â€¢ Committed to giving something back and to making a significant difference
â€¢ Commitment to developing people
â€¢ Clarity of vision and ability to share it with their people
â€¢ Dogged determination and often “relentless”
â€¢ Passion for and pride in what they do
â€¢ Clear standards of ethics and integrity
â€¢ Very strong focus on priorities
â€¢ Not afraid to show some vulnerability
â€¢ Willingness to take risks
â€¢ Regular use of reflective periods
â€¢ Almost universal dislike of jargon
Table 2.1: Most prevalent leadership characteristics:
Source: DTI, December (2003)
The top six ranked attributes of a leader include; Enabler, Team builder, Social adaptability, Enthusiastic learner, Reflective and Self-belief. The other attributes include; Visionary, Legacy Builder, Single Mindedness, Opportunity Awareness, Enthuse, Developer, Values Champion, Consistent, People Champion, Customer Champion, Self-reliance, Proactive and Knowing what works. Three quarters of followers want their leaders to create and demonstrate trust, vision and respect. Particularly the middle and junior managers are dissatisfied with the remoteness of the top management (DTI, December 2003).
To understand the relationship between the leader and follower in an organization, it is must that to understand the word ‘follower’. In this research ‘follower’ refers to those who report to a leader in an organization and follow their viewpoint for achieving the goals for their organization. It is an interesting topic to read and find out how leaders and followers are associated to each other in the leadership process which can be a relationship between superiors and subordinates. Leaders need followers, and followers need leaders (Burns et al, 1978, cited in: Northouse, 2007, pp.3). The whole responsibility and burden is on the shoulder of the leader even though there is a strong relationship between leader and follower. Leader is responsible to motivate the subordinates and achieve the organizations goals. According to Buchko., A.A, (2007) indicates that research suggests that the values of a leader are of significant importance while they are also inherited by the subordinates and the leaders who exhibit a well built value-based behavior of management which tends to inculcate the similar behaviors in their subordinates. The values refer to the similar design and the belief among the people which bind them together in an organization and the common values inherited in an organization which are named as the “core” or of the “inherent” values and how they are exhibited has a unique influence on the execution of the firm is represented in diagram 2.1 (cited in: Buchko., A.A, 2007). Consequently it can be said that the strong leadership qualifications and potential have a great impact on value-based management and the total firm execution.
Figure 2.1: The relationship of organization values to performance
Source: Buchko., A.A, (2007), pp. 38
Research suggests that the efficient leaders are those people on the basis of which the followers respond to the leaders who tell them that their work is their first priority. To maintain the followers in motivated path and get them involved in era of change, it is critical that the leaders must create a culture in the organization which stimulates the fun at work apart from execution (DTI, December 2003). One of the research on the soft approach of qualifications of leader (Crosbie, R., 2005) indicated the following 8 unique qualifications of leaders:
personal effectiveness/personal mastery;
planning and organizing, and;
Leader must also be able to develop collective self confidence, give voice to all people, and view leadership as learning. The idea of leadership just being about having a vision, aligning and selling it to people is a bankrupt idea (James., K, CEML, June 2000). This is supported by Edge (2007, pp. 039), suggesting that in today’s business organizations the work of leading and managing potentially involves multiple leaders including individuals who have not had any formally designated leadership and management positions and does not just include the CEO or leadership teams.
2.2.0 Endeavour to relate management and leadership skills, capability and abilities
In this research modern management has to be defined to link between management and leadership attributes. In modern times management and leadership are inter-linked, therefore it is must to have knowledge about management and leadership skills, capability and abilities and both are required in modern managers and leaders. So, it is important to examine and investigate the existing literature on these attributes.
2.2.1 Modern management approach
In modern era of management, the directors should have a complete understanding of leadership because it is one of the independent activities important to influence one of the four functions basic managerial functions apart from planning, organizing and controlling. Leadership was considered qualification for a success of organization and along with the rise in technology and the international business, leadership is given more preference. In today’s business world manager requires more skills apart from management skills (Certo, 2003). Weekes, S (2007), supported and also suggested to apply the significant changes so that individuals at all the levels have a capability to make decisions and become future leaders. To achieve the organizations success the executive has to understand the difference between managing and leading and also combining them when needed. Weekes recognizes that the combination should show a calculated focus on the process of organization (management) with the true concern for the workers (leadership) (The Edge, 2007, pg. 026).
2.2.2 Defining management skills
Decision making is one of the prime factors in management includes capacity to explore and identify opportunities to make use of resources efficiently. The principal elements included in management and leadership practices include managing people, process, structure, strategy and innovation. Critics also argue that managers need to have shift management capabilities from risk averse, hierarchical approach towards the approach that is more people oriented. It is also associated attributes such as inspiring, developing talent and performance management by providing clarity (IES, 2006).
Other skills like organizational skills and technical knowledge which are also defined in literature (Tamkin, P., and Denvir, A, 2006) are depicted in table 2.2:
Table: 2.2 Skills needed by today’s managers
Creativity and the management of change: Robert Chia (1996) strongly argues the need for managers to develop ‘entrepreneurial imagination’.
Innate factors: According to Mabey and Thomson (2000); the most important factors in making an effective manager are experience, personality and inherent ability. Beech (2003) also strongly supports this.
Soft skills: Mabey and Thomson (2000) suggest that the skills most needed in this century are the ‘softer’ skills – leadership, team working, people management and customer focus.
Generic Skills: According to the Council for Administration ‘management skills’ are considered as a specific category of generic skills. They support that the management skills are no longer constrained to ‘Managerial’ occupations.
Customer Relations: Chartered Management Institute concluded in the survey that customer relations are rated as the most important determinants for organizational future success by the managers.
The need to manage change: According to Winterton et al., (2000) new management development activities are required for need to manage change.
Leadership and strategic thinking: According to Kettley & Strebler (1997) senior managers need to think strategically, analyze information, solve problems and make decisions.
Source: (Tamkin, P., and Denvir, A, 2006)
2.2.3 Management and leadership capabilities
The core areas of capabilities development in management and leadership by the modern professionals, who are responsible to both their staff and people who rely on them for services, has been shown in Table 2.3: The author argues that the below mentioned skills and capabilities required in managers cannot be achieved unless a communication channel with followers is developed by a manager. The key skill of communication is to link all these areas and the ability to engage people is the area of critical success regardless of the area of endeavor (CEML, April 2002). Also, there is an increasing complexity in today’s businesses and poses multiple challenges which requires both management and leadership skills (ibid).
Table 2.3 Capabilities required in managers
Leading Strategic Direction: This includes capability to match the external threats and opportunities with internal strengths and weaknesses. Also, includes potential to act as catalyst for strategic decision making, quality and innovation.
Managing Client/Customer Relations: This suggests a clear understanding of who the customers or clients are and what they want? About their environment and what will make them happy and satisfied with the services. So, it includes delivering a quality service, relationship building and ability to measure effectiveness and satisfaction.
Managing and Leading People: It includes elements such as developing shared values and inspiring shared vision. Supporting and developing teams and individuals and optimizing diversity and talent. It includes the performance management capability of effective delegation such as, setting clear objectives, reviewing achievements, giving feedback and recognition.
Making it Happen: It includes operational planning, resource management, project management, operational planning and continuous process improvement.
Source: CEML (April, 2002)
2.2.4 Management and Leadership Abilities
In competitive world of business managers has to face multiple challenges which require both management and leadership skills. In large organizations, there are many pressures on managers to perform and to be accountable for multiple stakeholders. For efficient running of an organization executive has to motive, inspire and also guide their vision fits with both the interests of other stakeholders and the reality of the changing world. The management competence and leadership abilities previously were limited to needs such as abilities to inspire, motivate and enable people to do things differently to achieve newer levels of performance and customer satisfaction which in turn resulted in lacking of managers and leaders for the modern organization. Figure 2.2 (For detailed figure refer appendix C) depicts the “Management and Leadership Abilities Framework”, which clearly highlights the crucial combination of people abilities, task abilities and thinking abilities that lead to excellence in management and leadership in an organization (CEML Final Report, 2002).
Figure 2.2: Management and Leadership Abilities Framework
Source: CEML Final Report (2002), pp. 11
Thinking abilities are represented by thinking strategically.
Task abilities include the abilities to manage information, manage resources and manage activities and quality.
People abilities include the abilities to manage relationships, manage self, manage and lead people and lead direction and culture (Perren, L. and Burgoyne, 2002).
Management and leadership are the key factors for the success of an organization and complement each other (Darling et al., 2007) and can be seen as two overlapping functions. The fundamental differences between management and leadership are:
Managers administer; leaders innovate.
Managers maintain; leaders develop.
Managers control; leaders inspire.
Managers are short-term oriented; leaders long-term.
Managers ask how and when; leaders ask what and why.
Managers typically imitate; leaders originate.
Managers accept the status quo; leaders challenge it.
Managers do things right; leaders do the right things (Darling., J.R and Nurmi., R.W, 2009, pp. 206).
In spite of the fundamental differences as quoted above which reflect on the differences in types of personality; it does not specify which one is better than the other because the two sets of functionalities are necessary for the good execution of an organization. In the order with the expertise in the two paradigms that an individual must develop, learn and consolidate the attributes which were not inherited in basic personality (darling., J.R and Nurmi., R.W, 2009).
2.2.5 Benefits of leadership and management skills in managers
A good leadership and the management are the primary basis for delivering services, quality of execution, investment and productivity obtained in the public and private sectors. The principal elements included in management development considers: existence of education and qualification, formal and informal training, job based learning or experience personal factors or motivation and engagement (Tamkin., P and Denvir., A, 2006). A better execution of organization due to the good management would carry out to:
Managers with better skills who can be associated with greater innovation, performance, business growth and also higher survival levels of business.
Managers with better skills to implement better management practices, i.e. good quality processes, R&D activity and people management. This would be associated with better performance.
Recognition of higher level of skills by labor markets would lead to better managers receiving higher salaries, being promoted more and less likely to face unemployment (ibid).
The executives also show the capacity to adapt to change constantly and to fast mobile environment of businesses and in this manner they carry their people with them by the process of the change. Several benefits include (EFQM, 2003):
Clarity of purpose and direction within the organization.
A clear identity for, and within the organization.
A shared set of values and ethics.
Consistent and role model behaviors throughout the organization.
A committed, motivated and effective workforce.
Confidence in, and within the organization even in turbulent and changing times
In the present literature review it is obvious that a true mixture of skills, capability and ability is the need for the hour of the modern directors to be good leaders. So at this stage it will be interesting to study the nature of the modern business.
2.4.0 Comparative quality and performance of UK management
The IES (Tamkin et al., 2006) explored the quality of UK management both within UK as well as the non-UK multinationals. The negative aspect was that the UK managers are risk reluctant and unwilling to treat the poor execution or conflict and are overly hierarchical. Positive side they were sensitive and entrepreneurial. It was seen that one-third of managers and half of the juniors managers evaluated the quality of leadership; particularly inspiration as poor in their organizations with development of leadership given a low suitability by employers. Research suggests that employee view about their manager reflects on their attitudes towards work and the fact results of businesses. According to Rucci et al. ,1998; Barber et al. ,19992 ; Purcell et al. 2003; there is a growing importance of managers’ role in motivating staff (cited in: DTI, 2003).
It was noted that UK companies are less strategic and less forwards focused. The established companies always seek for empowering, energetic and people focused managers. On the other hand it is seen that the problem is with the lack of vision and strategic direction in the organizations rather than the possibilities of management in UK and consequently it is question of leadership rather than direct management (Tamkin., P, Mabey., C and Beech., D, April 2006). It has been argued by Darling., J.R and Nurmi., R.W (2009) which until recently it was thought that top level management should only work on the strategies and leadership was considered as part of skills in the middle-managers and the supervisors. They propose that it is now clearer that to successfully delegate and apply the strategy; not only the middle-managers and supervisors but also top management are necessary to explain leadership skills since they discover the strategy and constitute the essence of its existence. Thus, it is accepted, is carried out and well understood that planning and implementing a strategy are not two separate enterprises and they tend to over-lap organizationally (ibid).
Survey of followers at various levels of management functioning in the large variety of organizations in UK confirms that the today’s labour is sophisticated, informed and diverse than before and so people are still looking for an organizational leadership which is different and better. Research suggests that the organizations did not evolve effectively to satisfy the needs of today’s high performance workplace. Existence of an excessive command, control and bureaucracy behaviors in UK organizations which result in inhibition rather than improvement of the organizational performance (DTI, December 2003). With the issues of management and leadership; it is discussed that UK companies are less advanced in context to creating a progressive structure for the development of management and also in linking HR practices to the business strategies. The organizational culture becomes less flexible while companies are becoming more established and developed further. One requires it for them to evoke their drive and dynamism (Tamkin., P, Mabey., C and Beech., D, April 2006). So, it can be suggested that there is an urgent need to develop the management and leadership skills in the organizations in order to meet the demands of current business environment.
2.4.1 Management and Leadership development (MLD) and its context in an organization
An effective and competing business response is to create new business structures (Tamkin et al., 2006) and the essential key with this is to discover how to do; which again places more requirements on managers. Porter and Ketels (2003) proposed that to succeed with the strategies of company towards higher level of innovation, goods and services; change in point of view is must. It is also essential for the managers and leaders to distinguish between the task leadership and the process leadership (Rees., W.D and Porter., C, 2008). They stated that if task is too complicated and the leaders become too much implied with task and neglects leadership process; it can have poor consequence in group performance. In order to achieve this distinctive quality of a leader; the individual needs to gain some experience. Consequently, in an organization the managers cannot begin their careers at senior levels undertaking strategic responsibilities; with the difference of the directors for which the route is much of clairifiant with the role and the sets by convention definite of responsibilities. But even for managers at the entry point is as specialist and then they progress in their career undertaking managerial responsibilities later (Rees., W.D and Porter., C, 2008). So it is understood that the excellence of an organization depends on the leaders who have the uniformity in their execution and vision. The leaders at various levels in such organizations combine and they motivate and inspired their employees as well in the organization towards the model behavior by excellence, performance and role model behavior (EFQM, 2003). As also indicated by Darling., J.R and Fischer., A.K (1998) that at a multinational firm the management team is mainly enhanced by each individual’s interactive style which can together affect the collective achievements and individual accomplishments.
The EFQM model as shown in figure 2.5 (cited in: Augustus, E.O et al, 2005), highlights the other crucial aspect of leadership such as; people management, policy and strategy, performance management that includes people, customer and social results (Armstrong, 2006, pp.124) other than a process to achieve results.
Fig. 2.5 The premise undermining strategic quality management, TQM and EFQM Excellence Model
Source: Augustus, E.O et al, (2005) and EFQM, (2003)
Effective leadership management teams are integration of four styles of behavior known as; Relater, Analyzer, Director and Socializer in each individual. Thus, leadership skills and capabilities are essential in every management workforce than just one or few individual who head the company (Darling., J.R and Fischer., A.K, 1998). Although management and leadership are now considered on current basis of similar structures and even to a large level as interchangeable but at same point of time Darling, J.R and Nurmi., R.W, (2009) argue that these two organizational roles are distinguishing responsibilities. They propose that management positions includes responsibilities that come with the particular position in an organization and managers must essentially have managerial competencies such as lawyers, doctors, artists etc. leadership refers to the personal skills and abilities such as vision, communication and influential aspects of their capabilities. Despite these differences; Darling., J.R and Nurmi., R.W, (2009) support the fact that combination of these two roles is beneficial and valuable (Collins and Porras, 2002) for the success and development of a firm.
On the other hand Svensson., G and Wood., G (2005) argue that even though it is favorable to have effective leadership in management that characterizes higher degree of skillfulness but in minor or major level the coincidence of timely precision at the right place, right time rather than skillful leadership; is responsible for the success of an organization. It was also supported by Rees., W.D and Porter., C, (2008) suggested that the effective leadership and management engage a commitment to set appropriate skills that match with situations. Understanding the requirements of leadership in a particular circumstance can help people adapt to the changing situation, but not necessarily it could be in a significantly different situation where the ability of people to adapt may be restricted. Therefore, they suggest that however some skills can be developed but it is unlikely to develop the skills which are consistent with the basic personalities of people aspiring to be leaders. At the same time, the generic qualities which are associated with leadership and also abundant to expect all these qualities in one individual are quite unrealistic. With all these issues the individual must have specific expertise which further adds on to the problem (ibid.). Borgelt., K and Falk., I (2007) suggests that the effective leadership is based on the collective leadership intervention and not on attributes in a single leader to achieve organizational goals. Falk (2003) supports this by stating that the attributes or qualities of an individual leader are necessary but for an effective leadership it is not sufficient. So Borgelt., K and Falk., I (2007) suggest that effective leadership occurs through a more strategic approach towards management and leadership as shown in figure 2.6 that includes four stages namely; trigger stage, initiating stage, developmental stage and lastly management and sustainability stage.
Figure 2.6: The design of effective leadership interventions
Source: Borgelt., K and Falk., I (2007, pp. 126)
Cook, P (2006) argues that, for the management and leadership development (MLD) the employer’s responsibility becomes increasingly crucial factor and many organizations are now taking responsibility for developing the necessary leadership skill needed in their managers more proactively. Author suggests that to gain a true value of MLD, each organization performance index in harmony with the needs of that firm. According to which the company can analyze various factors such as; what needs improvement? How to evaluate the improvements been made? Therefore, following these principles to enhance or incorporate the MLD; can be a valuable investment for the organization.
In the literature the author has delve into the most relevant leadership theory of 21st century which is flip-flop approach of leadership. The general leadership means of arriving with key leadership skills as noticed by the followers and by different scholars has been deliberated. The essential business leadership and management abilities have been investigated. The passages of modern businesses have been investigated t
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