9. Leadership and leadership styles

There are managers and there are leaders in business. The differ­ence between managers and leaders is that managers produce order while leaders create change. Leadership is creating a vision for others to fol­low, establishing corporate values and ethics, and transforming the way the orgariization does business so that it is more effective and efficient.

In the book Workplace 2000 the authors say that leaders like managers plan, organize, direct, and control. But when leaders plan, they plan more globally in terms of setting the agenda for the firm. Leaders organize, but their focus is on structuring or restructuring the organization to be competitive in world markets. Leaders direct and control, but their direction involves creating a vision and their control consists of empowering people and holding them responsible for finding their own means to those ends.

Nothing has challenged researchers in the area of management more than the search for the "best" leadership traits, behaviours, or styles. Thousands of studies have been made just to find leadership traits, that is, characteristics that make leaders different from others. Intuitively, you would conclude about the same that researches found: that the research findings were neither statistically valid nor reliable. You and I know that some leaders seem to have traits such as good appearance and tact while others appear unkempt and abrasive.

Just as there is no one set of traits that can describe a leader, there is no one style of leadership that works best in all situations. Let's look briefly at a few of the most commonly recognized leadership styles and where they may be effective:

1. Autocratic leadership involves making managerial decisions without consulting others and implies power over others. Many business people who were sport leaders seem to use rather successfully an autocratic leadership style that consists of issuing orders and telling players what to do. Motivation comes from threats, punishment, and intimidation of all kinds. Such a style is effective in emergencies and when absolute followership is needed (for example, on army manoeuvres). Some football, basketball, and soccer coaches have successfully used this style.

2. Democratic or participative leadership consists of managers and employees working together to make decisions. Research has found that employees participation in decisions may not always increase effectiveness, but it usually does increase job satisfaction. Many new, progressive organizations are highly successful at using a democratic style of leadership where such traits as flexibility, good listening skills, and empathy are dominant. Some organizations that have successfully used this style include Wal-Mart. Federal Express, IBM. Xerox, and AT&T.

3. Laissez-faire or free rein leadership involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives. In certain professional organizations, where managers deal with doctors, engineers, and other professionals, the most successful leadership style is often one of laissez-faire leadership. The traits needed by managers in such organizations include warmth, friendliness, and understanding. Individual leaders rarely fit neatly into just one of these categories.

Researchers Tannenbaum and Schmidt illustrate leadership as a continuum with varying amounts of employee participation ranging from purely boss-centred leadership to subordinate-centred leadership.

Which leadership style is the best? Research tells us that successful leadership depends largely on who is being led and in what situations. It also supports the notion that different leadership styles ranging from autocratic to laissez-faire may be successful depending on the people and the situation.

In fact, any one manager may use a variety of leadership styles depending on whom he or she is dealing with and the situation. A manager may be autocratic but friendly with a new trainee; democratic with an experienced employee who has many good ideas that can only be fostered by a manager who is a good listener and flexible; and laissez faire with a trusted, long-term supervisor who probably knows more about operations than the manager does.