CHAPTER 6 Management Skills 1 Leading LEADING Leading

CHAPTER 6: Management Skills 1: Leading

LEADING • Leading is a management skill that encourages people to work towards a specific goal.

LEADING A strong leader must be able to: • Clearly communicate business goals to all staff • Find ways to motivate employees to achieve these goals • Set an example to employees • Delegate tasks to staff

LEADERSHIP STYLES There a number of leadership styles that managers can use to achieve organisational goals. The most common styles are: 1 Autocratic 2 Democratic 3 Laissez-faire

1 Autocratic Leadership • Autocratic leadership is a management style where the manager makes all business decisions without input from employees.

Features of Autocratic Leadership A Authority • Autocratic leaders have complete power and control in the organisation. B Decision-making • Autocratic leaders do not consult with employees when making decisions. C Trust • They do not trust employees and may believe that they are lazy and try to avoid work. D Motivation • Autocratic leaders use threats and punishment to motivate their employees to work harder.

AUTOCRATIC LEADERSHIP Advantages 1 Quick Decision-making Decisions can be made quickly as the autocratic leader does not consult with others. Therefore, the business does not miss out on opportunities in the market. 2 Quick Task Completion The autocratic leader gives orders to staff to ensure that tasks are completed quickly and deadlines are not missed. 3 Improved Productivity Employees work hard as they know that they are being supervised by management. This can improve productivity in the workplace. Disadvantages 1 Management Stress The autocratic leader makes all business decisions and does not delegate tasks. This can lead to management stress and burnout. 2 Staff Motivation levels are low as staff follow orders and jobs are not delegated to them. This can lead to higher absenteeism and staff turnover. 3 Industrial Action Employees may feel undervalued, which damages the relationship between management and employees. This may lead to increased industrial action, e. g. work to rule and official strikes.

2 Democratic Leadership • Democratic leadership encourages employees to participate in decision-making in the business.

Features of Democratic Leadership A Authority • Democratic managers delegate tasks to employees. However, ultimate responsibility for all tasks lies with the manager. B Decision-making • Democratic leaders include employees when they make business decisions. C Trust • Democratic leaders trust their employees and empower them to make decisions on behalf of the business. D Motivation • Employees are motivated as they feel valued when they are delegated tasks and are involved in decision-making in the business.

DEMOCRATIC LEADERSHIP Advantages Disadvantages 1 Increased Intrapreneurship Employees are willing to come up with ideas that can help the business to increase sales or decrease business costs, e. g. a new product. 1 Slow Decision-making is slow as managers consult with their employees before making major business decisions. 2 Future Promotion Delegation and empowerment help employees to develop new skills and knowledge. When promotions arise in the business they can apply for these roles. 2 Frustrated Employees may feel frustrated if their ideas are not incorporated into business decisions. They may decide not to contribute their ideas in the future. 3 Employee Motivation Employees have high levels of motivation, as they feel valued. This can lead to higher productivity levels among staff. 3 Management Resentment Some managers may resent empowering employees, as it reduces their control in the business.

2 Laissez-faire Leadership • Laissez-faire leaders take a hands-off approach to employees and allow them to make decisions that they believe are in the best interests of the business.

Features of Laissez-faire Leadership A Authority • Laissez-faire managers set goals for employees and allow staff to decide how best to achieve those goals. B Decision-making • Laissez-faire managers empower employees to make decisions on behalf of the business. C Trust • Management outlines the business objectives and trusts employees to work independently without close management supervision. D Motivation • Employees are highly motivated under this style of leadership, as they feel empowered to achieve the firm’s goals.

LAISSEZ-FAIRE LEADERSHIP Advantages Disadvantages 1 Employee Motivation Employee motivation is high among empowered employees, as they feel trusted by management. They work hard for the benefit of the business and to achieve the firm’s goals. 1 Reduced Productivity Some employees may take advantage of the lack of regular management supervision. This can create tension among team members and reduce business productivity. 2 Improved Skills and Knowledge Delegated work helps employees to improve their skills and knowledge. This prepares them for future promotions in the business. 2 Poor Decisions Some employees can make poor decisions that damage the firm’s reputation or result in a business missing an opportunity in the market. 3 Intrapreneurship Employees use their intrapreneurial skills to develop new products or identify new processes. This can help to reduce business costs and improve sales. 3 Poor Industrial Relations Management may blame employees for mistakes made or for not achieving targets. This can lead to poor industrial relations between management and staff.

DELEGATION • Delegation involves assigning tasks to another person, e. g. a manager delegates tasks to a subordinate.

Requirements for Delegation Open communication Employee skills and experience Managerial control

Requirements for Delegation 1 Open communication • Delegated tasks and the required standards should be clearly communicated to employees. 2 Employee skills and experience • Management must choose employees with adequate skills and experience to complete the assigned task. 3 Managerial control • Ultimate responsibility for task completion lies with management. Therefore, managers must implement a control system to ensure that errors are identified and corrected quickly.

Advantages of Delegating Advantages 1 Management Workload Delegation reduces managerial workload and allows managers to focus their time on more important managerial tasks and decisions. 2 Increased Employee Motivation Delegating tasks to employees shows that management trusts them. Increased motivation can help to boost productivity in the workplace. 3 Management Training Delegation gives employees the opportunity to develop their skills and knowledge and helps them to train as managers.

Disadvantages of Delegating Disadvantages 1 Employee Stress Some employees may not want the additional responsibility of delegated tasks and may become stressed and want to leave the firm. 2 Poor Decision-Making Employees lacking experience and suitable guidance may make poor decisions when they receive delegated tasks. This could damage the firm’s reputation. 3 Employee Resentment Employees may resent management if they feel that the delegated tasks are simply tasks that the manager does not like to do.

BENEFITS OF LEADERSHIP 1 Achieving organisational goals 2 Management time 3 Increased employee motivation 4 Supporting change 5 Staff recruitment and retention

Key Terms • leading • leadership styles • autocratic leadership • • democratic leadership empowerment laissez-faire leadership delegation

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