1.4.5 Leadership

• • Leadership is the act of establishing direction, purpose & the necessary capabilities among a group of people
• Management is the day-to-day organisation of the business, its resources and its staffing
• • A successful leader will be able to use a variety of leadership styles depending on the situation to achieve the best results for their business
• Autocratic

  • manager retains control & takes all decisions
  • little consultation with workers
  • subordinates are expected to obey instructions
• When does the autocratic leadership style work better?

  • more appropriate where there is a need for quick decision-making, during a crisis
  •  more suitable in a small business where the owner is the primary decision-maker and has complete control over the business
• Advantages of autocratic

  • Allows quick decision making
  • Necessary during crisis
  • Ensures the direction of organisation remains in line with organisational objectives
• Disadvantages of Autocratic

  • workers may become dependent on the managers
  • little creativity encouraged
  • employees may not be given the opportunity to express ideas
  • may lead to worker's feeling ignored/demotivated
• Democratic leadership

  • Employees are encouraged to participate in and influence decision making.
  • Information is shared with team members
  • A single status culture is encouraged
• Advantages of Democratic

  • can gain commitment especially during change
  • employees more likely to buy into decision
  • motivation may improve
• Disadvantages of Democratic

  • Decision making is slower
  • Quality of decision making becomes poor -
  • workers may make decisions that are selfish
  • feeling the manager isn't doing their job
• When does the democratic leadership style work better?

  • More appropriate when the business needs to encourage creativity, innovation, and employee engagement.
  • Effective in larger firms where decisions require input from multiple stakeholders, or where there is a need to build consensus
• Paternalistic Leadership

  • similar to autocratic but leader makes decision in the best interest of the workers.
  • managers take most responsibility for decision making, although there may be some consultation with workers
• Advanatages of Paternalistic

  • Employees feel valued
  • workers may be persuaded that decisions are made in best interest
• Drawbacks of Paternalistic

  • little scope for employees to make decisions
  • there is still a 'them and us' culture
• When does the paternalistic leadership style work better?

  • More appropriate where the staff are uneducated or inexperienced.
  • Require more guidance and support from their leader.
  • Effective where the leader needs to build a strong sense of loyalty from their employees
• Laissez - Faire

  • little direction given to workers
  • broad guidelines may be provided but day to day influnece of manager is limited.
  • subordinates are free to make decisions
• Advantages of Laissez - Faire

  • useful for skilled, creative & well-trained employees
  • motivates workers as they have more control over their working lives
• Drawbacks of Laissez-Faire

  • decision-making becomes time consuming & lacks decision.
  • may lead to chaos if good teamwork, feedback & working relationships are not evident.
• When does the laissez-faire leadership style work better?

  • More appropriate where the staff are very experienced and require minimal supervision.
  • Effective  where the leader wants to build a culture of independence and self-motivation.
• McGregor Theory X Managers

  • average worker is lazy & dislikes work
  • workers need to be controlled & directed
  • centrallised organisation
• McGregor Theory Y Managers

  • most people enjoy work
  • workers will take responsibility & organise themselves
  • decision making can be delegated
• Factors affecting leadership styles

  • Personal value system
  • Manger's experience
  • Confidence in subordinates
  • Feeling of security
  • Nature of business problems
  • Type of organisation
  • Effectiveness of teams/groups
  • Skills & experience of subordinates
  • Pressure ( time & cost)