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Summary Leading a business
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LEADING• Unlike a functional structure in which activities are grouped according to knowledge, skills,
experience or training, a section based on product, location or customers resembles, in some
respects, a small, privately owned business. It is autonomous and is accountable for its profits
or losses.
• Many researchers have attempted to define leadership, using variables such as traits,
behaviour, influence, interaction patterns and role relationships, but it remains an elusive
concept.
• First, leadership involves influence, and second, it has to do with the influence one person
exerts over another person or persons. Other aspects of leadership in an organisational context
are that it should be intentional with the purpose of achieving specific outcomes, and that
employees should be willing to follow a leader.!
• A further crucial aspect of leadership is the interdependent relationship between a leader and
his or her followers. Employees do not blindly follow their leaders, even if they are in leadership
positions; they must accept them as leaders to willingly follow them.
• Thus, we can define leadership from an organisational point of view as the process of
influencing employees to work willingly towards the achievement of organisational objectives.
• In the leading function, managers take the lead to bridge the gap between formulating plans
and reaching goals. They transform plans into reality by influencing individuals, groups and
teams in the organisation through communicating with them and by creating an environment
conducive to motivating employees.
LEADERSHIP AND MANAGEMENT
• Leadership is different from management.
• Management is broader in scope, comprising four management functions.
• Influencing' is the process leaders follow when communicating ideas, gaining acceptance of
them, and inspiring followers to support and implement the ideas through change. Influencing is
also about the relationship between leaders and followers.
• Managers may coerce employees to influence their behaviour, but leaders do not.
• While leadership is not the only component of organisational success, it is an important
contributing variable. The components of leadership entail the following:
o Authority denotes the right of a manager to give commands to, and demand actions
from employees.
o Power is a manager's ability to influence the behaviour of employees.
o Responsibility is the obligation to achieve organisational goals by performing required
activities. Managers are responsible for the results of their organisations, departments
or sections.
o Delegation is the process of assigning responsibility and authority for achieving
organisational goals. Managers delegate responsibility and authority down the chain of
command. Delegation refers to giving employees new tasks. Such a task may become
part of a redesigned job or may simply be a once-off task.
o Accountability is the evaluation of how well individuals meet their responsi-bilities.
Managers are accountable for all that happens in their sections, departments, business
units or organisations. Managers can delegate authority and responsibility, but they
can never delegate their accountability.
, AUTHORITY
• Managers are responsible for ensuring that employees work together to achieve the
organisation's goals. Without authority, managers are unable to manage, initiate or sustain the
management process. Authority therefore revolves around obtaining the right to perform certain
actions (within specified guidelines) to decide who does what, to demand the completion of
tasks and to discipline those who fail to do what the organisation expects of them.
• Final authority rests with the owners or shareholders of an organisation, who transfer or
delegate authority to the board. The board, in turn, delegates authority to top management, top
management delegates it to middle management and so on, to the lowest levels.
• Authority and leadership are therefore closely related - the organisation grants authority to
managers to lead individuals and groups in achieving the organisation's goals.
POWER
• Leading and power go hand in hand. Without power, a manager might not be able to influence
and lead employees towards achieving organisational goals.
• Managers have two types of power: position power and personal power. Top management
delegates position power down the chain of command. Managers have personal power when
their followers bestow it on them.
o Coercive power is the power to enforce compliance through fear, whether
psychological, emotional or physical.
o Reward power is based on the manager's ability to influence employees with
something of value to them. It concerns the power to give or withhold rewards. Such
rewards include,.
• The more rewards a manager controls and the more value employees place on these rewards,
the greater the reward power a manager possesses.
• Legitimate power is the power an organisation grants to a position.
o Referent power refers to a manager's personal power or charisma. Employees obey
managers with referent power simply because they like them, respect them and
identify with them.
o Expert power is the power a manager accrues because of his or her expertise,
knowledge and professional ability, particularly over those who need the knowledge or
information. The more important the information and the fewer the people who possess
it, the greater is the power of the person who commands it.
• A manager who commands all five types of power is a strong leader. In organisations,
managers are not the only ones to possess power. Employees also have power,
• Individuals accrue power unrelated to their position in the organisation because they obtain
information from their social networks, which they can use to take action.
• Factors determining the strength of an individual's social network include the size of the
network (access to information from many sources), the number of contacts between the
individual and key decision makers in the organisation, and the variety of contacts in the
individual's network (contacts, including people in various departments and positions in the
organisation and outside of its boundaries with key contacts, provide access to a wider range of
information) Managers should be aware that their employees also possess power. They should
use their own power judiciously to accomplish the organisation's goals.
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