Leadership and Management – Part 2

Leading: Vision and Values

Leaders Difference between managers and leaders is that managers produce order and stability while leaders embrace and manage change. Leaders create vision for others to follow; managers carry out the vision.

Managers vs Leaders MANAGERS Do things right Command and control Seek stability and predictability Are internally focused Work within the firm Are locally oriented Think mostly of workers LEADERS Do the right thing Inspire and empower Seek flexibility and change Are externally oriented Coordinate the whole system Are globally oriented Think mostly of customers and other stakeholders

Leadership Styles Autocratic Leadership – involves making managerial decisions, based on information available to the manager, without consulting others; it implies power over others. Consists of issuing orders, telling employees what to do Motivation comes from threats, punishment, and intimidation Effective in emergencies and when absolute followership is needed (ie. army manoeuvres) Suits employees who do not want to make decisions

Leadership Styles Democratic (participative) leadership – style that involves managers and employees working together to make decisions Can lead to frustration if the manager’s decisions are not consistent with the input Annoys those who do not wish to have input Employee participation in decisions may not always increase effectiveness but usually increases job satisfaction Traits such as flexibility, good listening skills, empathy

Leadership Styles Laissez-faire (free-rein) leadership – style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish these objectives Managers simply advise subordinates Employees have the authority to make the final decisions themselves Traits include: warmth, friendliness, understanding

Controlling

5 Steps Establishing clear and specific performance standards Monitoring and recording actual performance (results) Comparing results against plans and standards Communicating results and deviations to the employees involved Taking corrective action when needed

Controlling Ongoing throughout the year Weakest link tends to be the setting of standards Standards must be specific, attainable, and measurable ie. want to improve distance when running vs want to go from 2km to 4km within 3 months

Effective Managers

Effective Managers Effective modern managers have three things in common: they are action-oriented they manage change efficiently they are able to build a sense of shared values that will motivate and generate loyalty

Managerial Skills Conceptual skills – ability to understand the relationships among the various tasks of a firm See how the pieces fit together Used by top-level and middle-level managers Managers with good conceptual skills tend to be creative and are willing to consider various methods of achieving goals

Managerial Skills Interpersonal Skills – skills necessary to communicate with customers and employees Communication with Customers – ensure satisfaction, listen to complaints, bring complaints to attention of top manager Communication with Employees – clearly communicate assignments, mistakes, listen to complaints

Managerial Skills Technical Skills – skills used to perform specific day-to-day tasks Understand the types of tasks that they manage Important for all managers who evaluate new product ideas

Managerial Skills Decision-Making Skills – skills for using existing information to determine how the firm’s resources should be allocated Steps for decision making Identify the possible decisions. Gather information on all possible decisions. Estimate costs and benefits of each possible decision. Make a decision and implement it. Periodically evaluate the previous decision to determine whether it should be changed.

Managerial Skills Human Relations Skills – skills in understanding and getting along with people managers with poor human relations skills may have trouble getting along with subordinates causing employees to quit or transfer Important in all levels of management

Areas of Management Marketing Managers - responsible for developing, pricing, promoting, and distributing goods and services to buyers. Financial Managers - responsible for planning and overseeing the financial resources of a firm. Operations Managers - responsible for controlling production, inventory, and quality of a firm's products.

Areas of Management Human Resource Managers - responsible for hiring, training, evaluating and compensating employees. Information Managers - responsible for the design and implementation of systems to gather, process, and disseminate information. Other Managers - more specialized managers (e.g. Research and Development) may be created to meet the particular needs of a firm.