GRADE 12 BUSINESS
STUDIES
LESSON 4
MANAGEMENT AND
LEADERSHIP
MEANING OF MANAGEMENT AND
LEADERSHIP
Leadership
• The ability of an individual or a group of individuals to influence and guide followers or other
members of an organization
• Leadership is an of inspiring subordinates to perform in order to achieve goals
• It cannot be taught, although it may be learned as it is an inborn trait
Management
• The coordination of Planning, organising, leading and controlling employees to achieve goals.
• A person becomes a manager because of the position in which he/she is appointed
• Managers have power because of the position of authority into which they are appointed.
DIFFERENCE BETWEEN MANAGEMENT
AND LEADERSHIP
Leadership Management
Influences human behaviour. Guides human behaviour.
Communicates by means of Communicates through
interaction/behaviour/vision/values management functions, e.g. line
/ charisma. function.
Innovates/Encourages new ideas to Administers plans/programs/tasks to
increase productivity. reach targets.
Inspires staff to trust and support Controls systems and procedures to
each another. get the job done.
Focuses on what and why. Focuses on how and when.
TYPES OF LEADERSHIP
Type of leader Description
Autocratic Tell people what to do
No consultation/ no input
Charismatic Draw followers with charm
Bureaucratic Strict rules in organization
Processes/ procedures
Democratic Two ways of communication/ listen
to all opinions before decision
Laissez-faire Delegation decision making/staff
makes own decision
Transactional Punishment and reward
DIFFERENT TYPES OF LEADERSHIP
DEMOCRATIC LEADERSHIP STYLE
Democratic leadership style:
• The leader involves employees in the decision making process.
• Clear/two way communication ensures group commitment to find decisions.
• People-orientated, as employees feelings and opinions are considered.
• Handles conflict situations by involving followers in finding the best
solution.
IMPACT OF DEMOCRATIC
LEADERSHIP STYLE
Positives/Advantages
• The leader allows the employees to participate in the decision making process, so they feel
empowered/positive.
• Clear/Two way communication ensures group commitment to final decision(s).
• Complex decisions can be made with inputs from specialists/skilled workers.
Negatives/Disadvantages
• Incorrect decisions may be made if staff is inexperienced/not fully informed.
• Decision making may be time consuming because stakeholders have to be consulted.
• Employees may feel discouraged if their opinions/inputs are not considered.
• Not effective in times of crisis/when quick decisions need to be made.
BEST SITUATIONS TO USE THE
DEMOCRATIC LEADERSHIP STYLE
This leadership style can be used when:
• Group members are skilled and eager to share their ideas.
• The leader does not have all the information needed to make a decision and
employees have valuable information to contribute.
• Cooperation is needed between a leader and a team.
• Decisions need to be looked at from several perspectives.
AUTOCRATIC LEADERSHIP STYLE
• A leader takes all decisions alone without involving employees.
• Line of command/ communication is clear as it is top-down/ followers know
exactly what to do.
• Task-orientated as the opinions of employees are not considered.
IMPACT OF THE AUTOCRATIC LEADER
Positives/Advantages
• Quick decisions can be taken without consulting/considering followers/ employees.
• Work gets done in time/on schedule.
• Direct supervision and strict control ensure high quality products/service.
• Works well in large companies where consultation with every employee is impractical.
• Useful in a crisis/urgent situation, e.g. after an accident/meeting tight deadlines.
Negatives/Disadvantages
• Workers can become demotivated if their opinions/ideas are not considered.
• De-motivated workers impact negatively on productivity.
• New/Creative/Cost reducing ideas may not be used/implemented/never be considered.
BEST SITUATIONS TO USE THE
AUTOCRATIC LEADERSHIP STYLE
• In crisis situations, e.g. in the case of unforeseen challenges/accidents.
• In emergencies, where there is a shortage of time.
• When employees are motivated and the leader has already earned the trust
of the followers.
• When dealing with employees who are not cooperative.
LAISSEZ-FAIRE LEADERSHIP STYLE
• This form of management allows the subordinates complete freedom in
decision making.
• The leader provides general goals and guidelines.
• The subordinates must ensure that company policy must be adhere to in
their decision making process.
IMPACT OF LAISSEZ-FAIRE
LEADERSHIP STYLE
Positives/ Advantages
• Workers/Followers are allowed to make decisions on their own work/ methods.
• Leader motivates workers by trusting them to do things themselves/on their own.
• Authority is delegated, which can be motivating/empowering to competent workers/increase productivity.
• Individual team members may improve/develop leadership skills.
Negatives/ Disadvantages
• Lack of clear direction/leadership may be demotivating to employees.
• Employees can be held responsible for their own work which may lead to underperformance.
• Could lead to conflict when some team members act as leaders and dictate to other team members.
• Productivity may be compromised with a lack of tight control over workers not meeting deadlines
BEST SITUATION TO USE THE
LAISSEZ-FAIRE LEADERSHIP STYLE
• Subordinates are experts and know what they want/can take responsibility
for their actions.
• The leader is very busy and delegation of tasks will increase productivity.
• Team members need to improve/develop leadership skills.
• Suitable when employees are highly experienced and know more about the
task than the leader.
CHARISMATIC LEADERSHIP STYLE
• The leader serves as a role model and people follow him/her.
• The leader has a vision and is able to communicate well with others.
• The leader draws followers through charm and personality.
• This style is commonly used by politicians, religious leaders and business
teams.
IMPACT OF CHARISMATIC
LEADERSHIP STYLE
Positives/Advantages
• Expert at selling vision and achieve excellent results.
• Employees are motivated as the leader is energetic/ inspiring.
• Inspires loyalty/hard work among employees.
Negatives/Disadvantages
• Leader believes more in him/her than the team.
• Projects can collapse if the leader leaves the team.
• Leaders are intolerant of challenges and regard themselves as irreplaceable.
BEST SITUATION TO USE THE
CHARISMATIC LEADERSHIP STYLE
• Sell vision and achieve excellent results.
• Motivate employees as the leader is energetic/ inspiring.
• Inspire loyalty/hard work among employees.
TRANSACTIONAL LEADERSHIP STYLE
• Assumes that followers are driven by punishment and rewards.
• Punishment and rewards is always linked to the task at hand.
• Group members who failed to make meaningful contributions are punished.
• Group members who made meaningful contributions are rewarded.
IMPACT OF TRANSACTIONAL
LEADERSHIP STYLE
Positives/Advantages
• Encourages employees to work hard because they will receive rewards.
• Improves employees' productivity and morale.
• Business goals and objectives can be achieved as employees are motivated.
Negatives/Disadvantages
• Employees may become bored/lose creativity as they have to follow rules/ procedures.
• A transactional leader will have to monitor the work performance of employees to ensure
that expectations are met.
• Managing/controlling employees may be time-consuming.
BEST SITUATION TO USE THE
TRANSACTIONAL LEADERSHIP STYLE
• When the business wants to maximise employee performance.
• When deadlines have to be met on short notice/under pressure.
• When workers have a low morale.
• When the strategies/business structures do not have to change.
BUREAUCRATIC LEADERSHIP STYLE
• The leader provide strict rules of the business.
• The leader ensures that employees follow rules and procedures accurately
and constantly.
• The leaders follow the rules systematically and makes sure that employees
also adhere to the rules.
• There is little adjustment to changes in the environment.
• The leaders encourages no creativity.
IMPACT OF BUREAUCRATIC
LEADERSHIP STYLE
Positives/Advantages
• Managers ensure that rules/ regulations are always followed accurately.
• Health and safety are increased in a dangerous workplace, e.g. construction sites/mines.
• Followers know what is expected of them because of detailed instructions.
• The quality of work can be ensured.
Negatives/Disadvantages
• Complicated official rules may seem unnecessary/ time consuming
• Very little room for error, so workers feel they are not always treated with dignity.
• Lack of creativity/innovation/ self-fulfilment may lead to stagnation/ decrease in productivity.
• Employees may feel they have become objects of work and are not treated as humans.
BEST SITUATION TO USE THE
BUREAUCRATIC LEADERSHIP STYLE
• Can be used where health and safety are a priority and rules have to be
applied.
• Appropriate for routine jobs e.g. when employees have to follow rules on
how to use dangerous machinery
LEADERSHIP THEORIES
Situational leadership theory
• Different leadership characteristics are needed for different situations.
Transformational theory
• Suitable for a dynamic environment, where change could be drastic.
• The passion/vision/personality of leaders inspire followers to change their
expectations/perceptions/motivation to work towards a common goal.
Leaders and followers
• Teams achieve great results when there is a sense of understanding between the leader
and the team of followers.
• Followers listen to what is expected of them and are willing to work as a team.
• Followers easily accept responsibility when something doesn’t work out.
DISCUSS THE ROLE OF PERSONAL
ATTITUDE IN SUCCESSFUL LEADERSHIP
• Positive attitude releases leadership potential.
• A leader's good/bad attitude can influence the success/failure of the
business.
• Leaders must know their strengths and weaknesses to apply their
leadership styles effectively. Great leaders understand that the right
attitude will set the right atmosphere.
• Leaders' attitude may influence employees'/teams' thoughts/behaviour.
• Leaders should model the behaviour that they want to see in team
members.
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