1. Applied business studies leadership

2. What do leaders do?
Set objectives and direction for the business; they must have vision and know where the business is going.
Set standards; lead by setting an example (commitment, professionalism and ethical behaviour).
Recognise the skills that exist within the organisation and make use of the human talent.
Shape the culture and organisational structure of the business.
May become role models for individuals within the organisation.

3. Styles or types of leadership
There are a number of leadership styles and leaders are all different in their approach. However it is possible to identify five distinct styles:
Autocratic or authoritarian
Paternalistic
Democratic
Participative
Laissez-faire

4. Autocratic or authoritarian (armed forces)
Give little freedom to junior employees to take decisions, communication downwards, state objectives they expect employees to pursue.
Advantages; appropriate when a quick decision necessary (Coca-Cola/Dasani Water). When important to give a uniform message to all employees. When managers responsible for a large number of unskilled workers.
Disadvantages; employees become dependent on their leaders and don’t use own initiative (organisation less responsive and slows down decision making). Due to harsh criticism staff will avoid making decisions and pass up to be made at a higher level, hence senior managers tend to be overworked. Not unusual for staff turnover to be high.

5. Paternalistic (cadbury’s)
Is broadly autocratic but paternalistic leaders take the interests of the workforce into account when making decisions. Retain control over most decision making and only delegate minor decisions to subordinates.
Advantages; loyalty because staff feel protected and cared for. Low rate of labour turnover (helps to reduce recruitment costs and improve competitiveness).
Disadvantages; employees not encouraged to use their creative and imaginative skills, nor do they encourage the use of initiative (business not making the most effective use of its human resources).

6. democratic
Allow subordinates some role in decision-making. Typically leaders will delegate some decision making powers to subordinates (can help develop managerial skills in junior employees); encourage junior employees to express views and ideas (can enhance the creativity of the management team); listen to junior employees’ views and explain why decisions have been taken.
Advantages; employees offer constructive and imaginative ideas and suggestions (raises staff morale and motivation). Modern businesses large and complicated with dynamic and changing environment – leaders need the support that democratic leadership can provide.
Disadvantages; slower decision making, consulting with employees can take time. Can allow some managers to absolve themselves of some responsibility for making decisions. It may result in less consistent decision making.

7. Participative leadership
Business leaders fully involve one or more employees in determining what to do and how to do it (a highly democratic style); gives employees a high degree of control over decision making and their working lives.
Advantages; similar to democratic but benefits more pronounced, allowing managers to utilise the talents and creativity of subordinates to the fullest extent. Most valuable when businesses are required to take complex decisions requiring a range of specialist skills.
Disadvantages; similar to democratic leadership. Slower decision making and less consistency may be the price to be paid for the benefits of this style.

8. Laissez-faire (teaching)
Means “leave alone” which accurately describes this style of leadership (the most extreme type of democratic leadership). Subordinates are empowered to take many decisions without reference to their managers. Sometimes exists because of the failings of the individual leader.
Advantages; can utilise the employees’ talents as fully as possible. Shows a degree of trust and respect. May be appropriate when leading a highly creative and committed team. Can be successful such as when the employees are well-qualified and experienced, are highly motivated and supportive of their manager, leader and employees are all pursuing the same objectives.
Disadvantages; can lack co-ordination and possibly a clear sense of direction. Can sometimes neglect the planning process.

9. The skills of leadership
John Gardener (US writer) studied a large number of organisations and came to the conclusion that there were some qualities and attributes that appeared common in good leaders including:
physical vitality and stamina
intelligence and judgement
eagerness to accept responsibility
understanding of subordinates and their needs
skill in dealing with people and the capacity to motivate people
courage and resolution
trustworthiness
decisiveness
self-confidence and assertiveness
adaptability and flexibility.

10. Style versitility
It may be that the best leaders are those who adopt a style appropriate to the situation that they face. The most talented are arguably the most versatile, able to call on one or more styles having assessed the demands of the situation.
If it is true that the most effective leaders are versatile, then this has a number of implications:
Will need a greater emphasis (and spend more money) on training managers. In particular managers will need training to help them move away from their “natural” style of leadership.
A more flexible business culture may be required.
Junior employees may need support and training to work with a manager who uses different leadership styles (to enable them to carry out duties requiring different degrees of independence).