Lesson 4 LEADERSHIP & MANAGERIAL SKILLS

Overview Nature of leadership Vision, mission and corporate objectives Leaders and management Skills for managerial success Management hierarchy and function

LEADERSHIP Peter Drucker: “The only definition of a leader is someone who has followers.” Warren Bennis: “Leadership is the capacity to translate vision into reality.” Bill Gates: “As we look ahead into the next century, leaders will be those who empower others.”

DEFINING LEADERSHIP Leadership is a process of social influence to maximise the efforts of others towards a goal Leadership stems from social influence, not authority or power Leadership requires others, and that implies they don’t need to be “direct reports” No mention of personality traits, attributes, or even a title; there are many styles, many paths, to effective leadership It includes a goal, not influence with no intended outcome Leadership “maximises the efforts” through engagement, influencing and persuasion

MANAGEMENT Management is the process of achieving organisational objectives through people and other resources. The manager’s job is to combine human and technical resources in the best way possible to achieve the company’s goals. Management principles apply to not-for-profits as well as to profit-seeking firms

MANAGEMENT HIERARCHY A firm’s management usually has three levels: top, middle, and supervisory Top management represents the highest level of management (CEO, CFO, executive vice president), or commonly known as top leadership Top managers devote most of their time to developing long-range plans for their organisations They set direction and inspire the company’s executives and employees to achieve their vision for the company’s future.

MIDDLE MANAGEMENT Middle management is the second tier in the management hierarchy and includes positions such as general managers, plant managers, division managers, and branch managers Focus on specific operations, products, or customer Develop plans to implement the firm’s strategic plans They budget for product development, identify new uses for products, and improve training and motivation. Because they are more familiar with day-to-day operations than CEOs, middle managers often come up with new ways to increase sales or solve company problems

SUPERVISORY MANAGEMENT Supervisory management or first-line management includes positions such as supervisor, section chief, and team leader. These employees assign non managerial employees to specific jobs and evaluate performance They implement the plans developed by middle managers

SKILLS FOR MANAGERIAL SUCCESS Managers at every level must exercise three basic types of skills: technical, human, and conceptual Technical skills –An ability to understand and use the techniques, knowledge, and tools and equipment of a specific discipline or department –Technical skills are important for first-line managers and less important for top managers Human skills –Interpersonal skills that enable managers to work effectively with and through people Conceptual skills –An ability to see the big picture by acquiring, analysing, and interpreting information –Conceptual skills are important for top-level managers, who must develop long-range plans

Managers carry out four functions—planning, organising, directing, and controlling. Planning is the process of anticipating future events and conditions and determining courses of actions for achieving organisational objectives Organising is the process of blending human and material resources through a formal structure of tasks and authority Directing involves guiding and motivating employees to accomplish organisational objectives Controlling involves evaluating an organisation’s performance against its objectives –Controlling: 1) establish performance standards, 2) monitor actual performance, 3) compare actual performance with established standards, and 4) take corrective action if needed MANAGERIAL FUNCTIONS

Vision Vision serves as the target for a firm’s actions, directing the company toward opportunities and differentiating it from its competitors A company’s vision must be focused and yet flexible enough to adapt to changes in the business environment Ethical Standards Sometimes ethical standards are set in compliance with industry or federal regulations, such as safety or quality standards High ethical standards also can encourage, motivate, and inspire employees to achieve goals Sometimes taking an ethical stand can actually cost a firm in lost revenues and other support VISION AND ETHICAL STANDARDS

A mission statement is a written explanation of an organisation’s business intentions and aims It is a statement of a firm’s purpose, its operations, its market, and how it differs from competitors It guides people inside the firm and informs others of the company’s reason for being Development can be complex and difficult ORGANISATION’S MISSION

Objectives are guideposts by which managers define the organisation’s desired performance in such areas as new product development, sales, customer service, growth, environmental and social responsibility, and employee satisfaction The mission statement identifies a company’s overall goals, while objectives are more concrete ORGANISATION’S OBJECTIVES

COMPETITIVE DIFFERENTIATION Creating Strategies –Competitive differentiation is the unique combination of a company’s abilities and approaches that sets it apart from competitors –Common methods of competitive differentiation include: being the first to introduce a product offering exceptional customer service offering bargains marketing company donations to charities

Implementing the Strategy –Middle managers or supervisors who actually implement a strategy –Companies that are willing to empower employees in implementing the strategy reap the benefits Monitoring and Adapting Strategic Plans –Monitoring involves securing feedback about actual performance –Plans need to be adapted when the actual performance fails to meet goals –Ongoing use of such tools as SWOT analysis and forecasting can help managers adapt their objectives and functional plans as changes occur

DEBATE QUESTIONS Should a company’s mission include sustainability? Agree or disagree. Good leadership instead of good managerial skill is required for a company to grow Vision does not serve anything in profit- oriented company as it is too long term for effective execution

DEBATE EXERCISE Divide students into 6 teams 2 teams per round, with 1 team per side – –“Agree team or For team” –“Disagree team or Against team” Premise of logics and arguments –Provide a clear and reasonable definition –Establish issue / scope of debate –Advance with substantive case / evidence –Rebut the arguments of the other team –Summarize the debate / position