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Leadership vs Management

We’ve used the word “leader” and we’ve used the word “manager.” You may think they’re interchangeable, but they aren’t. They are different.

Abraham Zaleznik, Harvard Business School Professor Emeritus, was the first to write about the differences between leaders and managers. His article, “Managers and Leaders: Are They Different?”  challenged the traditional view of management, which centered on organizational structure and processes.[1] Organizations, at the time, developed managers with a focus on process and control. Zaleznik argued that these same organizations were missing the opportunity to develop leaders by concentrating on this, because they were really two different types of people.

Zaleznik charged that the approach of the typical organization was omitting essential leadership elements of inspiration, vision and human passion from their concept and development of people. He went on to define a manager as someone who seeks order, control and rapid resolution of problems. A leader, he went on to say, is more like an artist, and “tolerates chaos and lack of structure.” Organizations were too often not creating an environment where leaders could flourish.

In Zaleznik’s view, both leaders and managers contribute to the organization. Leaders contribute by advocating change and new approaches, and do so by gaining the commitment of employees. Managers contribute by advocating stability and the status quo, exercising authority, carrying out responsibility and determining how work will get accomplished.

John Kotter, current Harvard Business School Professor Emeritus, had some additional opinions on the differences between leadership and management. In 1990, Kotter proposed that leadership and management were two distinct, yet complementary systems of action in organizations. Specifically, leadership is about coping with change, and management is about coping with complexity.

Kotter’s view of the leadership process involves:

  • Developing a vision for the organization
  • Aligning people with that vision through communication
  • Motivating people to action through empowerment and basic needs fulfillment

Conversely, Kotter’s view of the management process involves:

  • Planning and budgeting
  • Organizing and staffing
  • Controlling and problem solving

Here’s an explanation of Professor Kotter’s point of view from the man himself:

Leader-Managers

Have a Vision

Create momentum around your vision and the company’s vision—and encourage your departments’ leaders to do the same.

Perhaps your vision for the department is to be the best finance department in the company, outperforming the financial departments that support the company’s other areas. Your job as leader is to tie that vision to the goals and beliefs of your employees. And, because leaders create other leaders, you encourage your accounts payable and accounts receivable managers to do the same with their smaller teams.

Explain Your Reasoning

Set examples and explain your reasoning to earn employee respect.

Employees often follow the examples of leaders who display integrity and strength in their interactions. The leader-manager often has to make unpopular decisions, and when he or she does, an explanation of the reasoning behind that decision can help the leader earn the respect of employees.

Accomplish Goals

Business people who have subordinates at almost every level will agree that inspiring others is their most important function, but most understand that accomplishing goals is the central concern of the work they’re doing. Without accomplish tasks, there is no productivity, no profit. If employees are motivated and excited about the work they’re doing, the leader-manager should be well on his or her way to guiding the team’s accomplishments. This is where a hybrid of managerial skill and leadership traits really moves into action.

Innovate New Solutions

Obstacles and roadblocks are commonplace in the business world. Leaders embrace risk and understand that they must be taken to grow. Leaders embrace change. Managers, on the other hand, like routine and status quo, if we are to understand the assessments of researchers correctly. As a leader-manager, you will need to assess the roadblocks you see and innovate new solutions to overcome them. Some may work and some may not.

Exploring Transformational And Transactional Leadership Styles-Tahreem Raza

TRANSFORMATIONAL LEADERSHIP

Transformational leadership is distinguished from transactional leadership in that it aims at innovation, while the latter is focused on planning and execution. Furthermore, transactional leadership focuses on rewards and punishments in order to achieve goals. These characteristics suggest that transformational leadership strives to create new opportunities for employees in an organization, whereas transactional style works off of an existing structure (Tucker, Georgia, Russell, College, and Emory, 2004). Another distinguishing feature between the two styles is that transformational leadership aims at motivating people while transactional leadership focuses on the use of manipulation of power and authority (Tucker, et al, 2004).

The intrinsic characteristics of transformational leaders, as described by Dixon (1998), are the main drivers behind effective behaviours. Dixon’s study revealed that a leader’s behaviour is influenced by four factors: self confidence, integrity, honesty, and personal values. The primary driving force behind effective performance is the leader’s ability to connect his or her life experiences with transformational behaviours. Once such connection is established, it leads to external transformation, resulting in organizational transformation. For example, when a leader starts to believe that his work can make a difference; his intentions transcend beyond personal motives and are geared towards the greater good.

Schuster (1994) states that transformational leadership appeals to higher motivation, while improving the quality of life for the members of an organization. Transactional leadership, conversely, is considered “at best a networking of power” (p 103). Transformational leaders are able to exercise influence in two primary areas, which appeal to the mind and the heart: 1) deep thinking and 2) empathy (Schuster). Using these influences, a transformational leader is able to motivate followers to act on their own behalf and for the needs of others. In transformational leadership, the leader empathizes with the developmental needs of his/her followers. According to Jung, Yammarino and Lee (2009, transformational leaders are good mentors and provide coaching to their followers.

Transformational leadership focuses on people (Burke, Stagl, Klein, Goodwin, Salas and Halpin, 2006). Bass (1990) explains that such leadership motivates in followers; it moves people beyond self-interests and allows them to focus on the good of the group or society (Stewart, 2006). Transformational leaders are able to articulate an appealing vision of the future by communicating ideologies and leading through example. This leadership tends to improve the team’s morale and motivates the team members (Stewart).

In summation, a transformational leader is able to motivate his followers, to strive for excellence without the use of power or authority, by inspiring them through his passion and deep thinking.

TRANSACTIONAL LEADERSHIP

In contrast with a transformational leader, a transactional leader accomplishes goals by rewarding employees who meet expectations (Bass, 1990). These rewards come in the form of recognition, pay increases, and advancement. Employees who fail to perform per expectations, however, are penalized. Such transactions or exchanges – the promise of reward for good performance, and discipline for poor performance – characterizes effective transactional leadership (Bass, Avolio, Jung and Berson, 2003). Hence, transactional leadership becomes less appealing and appears mediocre when the leader relies heavily on passive management by exception. Management by exception is, “when leaders transact with followers by focusing on mistakes, delaying decisions, or avoiding intervening until something has gone wrong, or rewards focused on recognizing the work accomplished” (Howell & Avolio, p. 892). This implies that the leader only interacts with his followers when expectations are not met and standards and procedures not followed (Bass, 1990)

Since transactional leadership is based on a system of rewards and penalties, it does not offer much in terms of inspiration, to motivate people to go beyond the basics. Given this fact, the followers of transactional leaders might get complacent and develop a tendency to achieve minimal expectations only that would help them avoid penalties (Bass, 1990). Thus, the leader and the follower are in an agreement on what the follower would receive upon achieving the negotiated level of performance (Bass, 1990). The success of such leadership depends on the level of satisfaction the leader and followers have in following this system of performance based appraisals (Bass, 1990).

A study conducted by Howell and Avolio (1993) confirms that contingent reward leadership has a negative impact on the followers’ performance. Contingent reward is viewed as “an active and positive exchange between leaders and followers whereby followers are awarded for accomplishing agreed upon objective” (p. 892). If managers do not effectively follow-up on the contingent reward promises, thereby displaying behavioural inconsistency, they are viewed as ineffective leaders. Furthermore, research (Howell and Avolio, 1993). suggests that the level of contingent reward leadership is dependent on organizational context and settings. For example, an organization undergoing change might suffer from a transactional leadership style (Howell and Avolio, 1993). The penalties, awarded in such a system of managing by exception, have a negative impact on performance and satisfaction (Bass, no date). This stems from the fact the leader passively awaits problems before taking any action. By following this strategy, the leader ensures that corrective action is taken when required and in doing so he reinforces the roles and expectations for the followers. Hence, this behaviour represents an important aspect of transactional leadership (Bass, 1990)

As can be seen, a transactional leader relies heavily on power and authority to lead his members. Power play and the use of a “reward and penalty” system thus play an integral role in such a leadership style. As discussed through various researches, transactional leadership measures are not so effective and in most cases can de-motivate employees.

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