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Important Theories of Leadership and Management in organisations

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Very often we can hear today how important good leadership is to run a business successfully. But why? Why do we need good leaders? Why is a good leader essential for running a business? What is leadership anyway? And most important of all, how can one evaluate the performance of a leader? These and many other questions arise when we think about leadership. Many famous people have also made up their mind about these issues and have developed different theories about leadership. This term paper will deal with three very important theories and point out differences in these models and problems of applying them in reality. The first theory will be the "Managerial Grid" of Blake/Mouton. Then we will go on with Fiedler's Contingency Model and end with Hersey-Blanchard's Situational Theory. First of all though, it is necessary to know what leadership is and what it means for a company.
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Høgskolen i Oslo
Organisation Development
Term paper:
Important Theories of Leadership and
Management in organisations
Name:
Angela Gebhardt
Franca Heinrici
Alessio Pavan
Lecturer: Magid Al-Araki
Date:
27 April 2003

Contents
page
1. Introduction
3
2. A definition of LEADERSHIP and MANAGEMENT
3
3. Blake / Mouton’s Managerial Grid
4
4. Fiedler’s Contingency Model
7
5. Hersey-Blanchard Situational Theory
9
6. Conclusion
11
2

1. Introduction
Very often we can hear today how important good leadership is to run a business
successfully. But why? Why do we need good leaders? Why is a good leader essential for
running a business? What is leadership anyway? And most important of all, how can one
evaluate the performance of a leader?
These and many other questions arise when we think about leadership. Many famous people
have also made up their mind about these issues and have developed different theories about
leadership. This term paper will deal with three very important theories and point out
differences in these models and problems of applying them in reality.
The first theory will be the “Managerial Grid” of Blake/Mouton. Then we will go on with
Fiedler’s Contingency Model and end with Hersey-Blanchard’s Situational Theory.
First of all though, it is necessary to know what leadership is and what it means for a
company.
2. A definition of LEADERSHIP and MANAGEMENT
Very often management and leadership are referred to as the same thing. But actually
these two are different in some ways. The most obvious differences are shown below.
• Management is the process of getting things done through the efforts of other people.
(Focuses on procedures and results)
• Management suggests more formality & manager refers to a position in an organisation.
• Leadership is influencing of others to do what he/she wants them to do.(Influencing others
i.e. human interaction)
• A leader may have no formal title at all and rely on personal traits and style to influence
followers.
But can anybody become a leader? The common sense tells us: “NO!” This is of course true,
because one who wants to become a leader has to have certain significant trait, which are:
• ”Supervisory ability: planning, organising, influencing and controlling the work of others.
Need for occupational achievement: The seeking of responsibility and the desire for
success.
Intelligence: Creative and verbal ability including judgement, reasoning and thinking
capacity
Decisiveness: Ability to make decisions and solve problems competently.
Self- assurance: Extent to which the individual views himself or herself as capable of
coping with problems.
3

Initiative: Ability to find new and innovative ways of doing things” [Judith R. Gordon,
1990]
Leadership is “influencing others to do activities to fulfil a shared goal”
[www.mech.uq.edu.au, 25.October 2002]. It is also the direction and management of change
as well as the creation of visions for the organisation. Another task is to motivate and lead
people for success and to create conditions, which are necessary to achieve goals.
Basically we can distinguish between four different styles of leadership.
Autocratic
Participative
Democratic
Laissez-Faire
The leader tells the
The leader allows and Leader seeks
Leader lets group
worker what to do
expects workers
majority rule from
members make all
participation
workers
decisions
[Judith R. Gordon, 1990]
Now that the basic leadership styles have been presented and the difference between
leadership and management are explained the focus should be on the different theories
mentioned in the introduction. First, Blake/Mouton’s “Managerial Grid” will be dealt with.
3. Blake/Mouton’s Managerial Grid
Unlike the two theories, which will be described later on, the Managerial Grid is a
behavioural theory. In 1964, two academics in the field of management published a book:
“The Managerial Grid: key orientations for achieving production through the people”.
Blake and Mouton elaborate a model, which tries to understand the different attitudes of
managers toward the human resources and the other resources involved in the organisation.
This is very important because a manager has to have the best skills and to be able to keep all
the resources co-ordinated toward achieving the project’s goal.
The model conceptualises management styles and relations. It uses two axis: “ Concern for
People” and “ Concern for Task”, which are two important dimensions used to examine
management behaviour and characteristics.
When taken the two axes and all evolving possibilities together a matrix with 81 different
management styles appears. According to Blake and Mouton five of the 81 styles are the most
significant and important.
(See also grid on page 5)
4

[http://www.nwlink.com/~donclark/hrd/history/grid.html, online 25. October 2002]
Blake and Mouton describe the five shown management styles as the following:
Country club management: (grid position 1,9)
Here we find all the managers with a high concern for people and a low concern for
production.
This kind of manager has a thoughtful attention to needs of people for satisfying relationships,
which leads to a comfortable friendly organisation and work environment.
They always have lots of social interaction and put service projects as well as company sports
teams high on their list.
Authority- obedience management: (grid position 9,1)
All the managers who operate at the other extreme are included in this position.
They focus on the efficiency in operations with little concerns for individuals.
They get a work done in such a way that human elements interfere to a minimum degree.
Impoverished management: (grid position 1,1)
Managers in this grid position exert a minimum effort to get required work done and to
sustain organisation membership.
They have little concern for either the human element or the production level of the team.
This kind of manager has a short life in responsible organisations.
Organisation management: (grid position 5,5)
These kinds of managers constantly try to balance the necessity to get out work with
maintaining moral of people at a satisfactory level, but not excellent.
Organisation production will be close to expectations but without exceeding them.
Team management: (grid position 9,9)
This is the ideal manager identified by Blake and Mouton.
This manager develops a relationship of trust and respect with employees and others. There is
also certain interdependence through a common stake, which leads to an enhancement of the
productivity.
5

Blake and Mouton concluded that the first four styles are not the most effective, while
team management approach is the best style because it improves performances, lowers
employee turnover and absenteeism and grants employee satisfaction.
However, the team management style would not work in a crisis, because sometimes there is
no time to be sensitive to morale issues.
Moreover the Managerial Grid encourages managers to devote more time on managing
human resources, because they usually spend more time managing easier resources. In fact,
human resources are quite complex to measure and to allocate; that’s why managers should
devote time to these more challenging resources.
Like in any other theory one can find both strengths and weaknesses in the Managerial Grid.
Strengths:
• Marked a big shift in the focus of management work
• Several studies give credibility to this model
• Encourages managers to think about their own balance between two main areas of
managerial concerns: task orientation and people orientation
• By following this approach, project managers can focus more on the human side of the
management equation, trying to identify ways to adapt the behaviour according to
different resources and circumstances.
Weaknesses:
• The Managerial Grid aims at identifying the most effective management style for all the
situations, which are not supported by evidence in real organisations.
• No adequate relationship between behaviour and performance outcomes (satisfaction,
morale, and productivity) has been documented.
• This approach implies that the most effective management style is team management style
but this actually may not be the case in all the situations.
• It does not encourage managers to think and act flexibly according to the circumstances in
which they are managing
The theory of the Managerial Grid has been used for 35 years in training managers about
working with people.
It is also important because it can help project managers look at managing projects and
resources more effectively.
But it is also fundamental to consider other factors to profile a manager, such as, how does his
employees and his master rate you as a leader, does he get his job done, does he take care of
his employees, is he growing his organisation, etc.
6

4. Fiedler’s Contingency Model
Unlike behavioral theories, situational theories tell us that effective leadership depends
on the situation at hand. They require the leader to interact with the employees. They
encourage them to listen, to involve, to coach, to develop, to enrich, to motivate, to risk, to
credit, to care, and to express concern for those who they manage. Situational theories include
the Contingency Model, the Path-Goal theory, and the Situational Leadership theory.
While many scholars assumed that there was one best style of leadership, Fiedler’s
contingency model postulates that the leader’s effectiveness is based on ‘situational
contingency’, or a match between the leader’s style and situational favourableness, later
called situational control.“ [Ann E. Brown, 2001]
“A leader can only be effective if the individual personality style is appropriately matched to a
given set of situational variables.” [Managing Business & Engineering Projects - J.M.
Nicholas, 1990] These 3 variables are:
• The work group accepts or rejects the leader.
• The task is relatively routine or complex.
• High or low formal authority.” [J.M. Nicholas, 1990]
Fiedler’s contingency model includes 3 different elements and 2 different styles. The
elements, on which the situation is measured on, are:
• a good or poor leader-member relation
• a high or low task structure and
• a strong or week position power
The two different styles are based on the leader either task oriented or relation oriented.
Then Fiedler developed a questionnaire to measure an individual in one is of the above
categories. This questionnaire is the main component of his theory. He uses the least preferred
co-worker (LPC) scale, an instrument for measuring an individual’s leadership orientation
using eighteen to twenty-five pairs of adjectives and an eight-point bipolar scale between each
pair. “High-LPC or relationship-motivated leaders describe their least preferred co-worker in
more positive terms and are concerned with maintaining good interpersonal relations. Low-
LPC or task-motivated leaders describe their least preferred co-worker in rejecting and
negative terms, and give higher priority to the task than to interpersonal relations.” [ Ann E.
Brown, 2001]
7

Fiedler assumes that leadership style is fixed, that it is, either relation oriented or task
oriented. The leadership style is then matched with the situation defined by the three
situational factors previously described. If the leadership style does not match the situation,
the situation has to be adapted to it or the person has to be replaced.
[http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld041.htm, online 25 October 2002]
Above Fiedler’s Model is shown and one can see what leadership style belongs to which
combination of the three elements. For example is a situation in which the leader has a great
deal of control and influence is a high control situation. A moderate control situation is one in
which the leader has a medium degree of control, and a low control situation is one in which
the leader's control and influence are relatively low.
The model shows that task oriented leaders have the strongest positive effect in the situations
1,2,3 and 8. Whereas relation oriented leaders do well in situations 4,5,6 and 7. The leaders
effectiveness depends on the situation and therefore a leader can do something about their
situations.
According to Fiedler there is no ideal leader. Both task and relation oriented leaders can be
effective if their orientation fits the situation. Fiedler also assumes that since the personality
and therefore the orientation are relatively stable, improving the effectiveness requires a
change in the situation.
One major point of criticism is the fact that this theory implies that the only alternative for an
unalterable mismatch between leader orientation and an unfavourable situation is changing
the leader.” [Ann E. Brown, 2001]
Others criticise the method of measuring leadership through the LPC model.
8

But in general this theory is a good way in evaluating the performance of a leader. Of course
it should not be the only way to measure the effectiveness of a leader in a company. But surly
one could use it as a complementary method to find out, how the leader is performing and if
there is need for a change.
5. Hersey-Blanchard Situational Theory
Hersey and Blanchard developed also a theory that bases the leadership style on the
given situation. The Situational Leadership theory, created by Hersey and Blanchard, includes
four situational leadership styles: telling, selling, participating, and delegating. According
to Paul Hersey, a situational leader adapts "leadership behaviors to features of the situation
and followers."
Manager’s leadership style must be adaptable and flexible to meet the changing needs of
employees and situation. It should be matched to the maturity of the subordinates.
Maturity is assessed in relation to a specific task and has two parts:
Psychological maturity - Their self-confidence and ability and readiness to accept
responsibility and be able to manage the given tasks.
Job maturity - Their relevant skills, technical knowledge and ability to carry
responsibility; the ability to put up high goals, and still manage them.
[Strunz H., Dorsch M., page 145]
As the subordinate maturity increases, leadership should be more relationship-motivated than
task-motivated.
The Hersey and Blanchard Leadership Model means that the developmental levels of a
leader's subordinates play the greatest role in determining which leadership styles are most
appropriate (leader behaviors). According to this conceptualization, leader behaviors fall
along (1) directive behavior and (2) supportive behavior.
DIRECTIVE BEHAVIOR
SUPPORTIVE BEHAVIOR
• one-way communication
• two-way communication
• followers' roles spelled out
• listening, providing support &
• close supervision of performance
encouragement
• facilitate interaction
• involve follower in decision making
[http://psychology.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fwww.geocities.c
om%2FAthens%2FForum%2F1650%2Fhtmlblanchard.html, 14.10.2002]
9

Putting the leadership behaviors identified by Blanchard together on a grid, four
leadership styles result:
1. The "telling style" is appropriate when the members are new or inexperienced, and need a
lot of help, direction, and encouragement to get the job done. – high task, low relationship
2. The "selling style" is useful when group members are a little more responsible,
experienced, and willing to do the task but do not have the necessary skills. – high task, high
relationship
3. The "participating style" is a supportive style used when groups have the ability to do the
job but may be unwilling to start or complete the task. – high relationship, low task
4. The "delegating style" is useful when group members are willing and able to take
responsibility for directing their own behavior. – low relationship, low task
[http://www.mech.uq.edu.au/subjects/e4390/Em1mod08/sld046.htm, online 09.10.2002]
The Blanchard model combines the behavior grid (similar to the Blake- Mouton
Managerial Grid) with the Developmental Levels of subordinates to arrive at some
conclusions about appropriate leadership styles.
HIGH
selling
participating
Relationship
of behavior
telling
delegating
LOW
Task behavior
HIGH
mature
Maturity of followers
immature
[Strunz H., Dorsch M., 2001, page 146]
There is one problem: To believe that the leader can ascertain the maturity of the
employee and as a result of that chooses a specific leadership style. [Strunz H., Dorsch M.,
2001, page 146] To determine the appropriate leadership style the leader must first determine
the maturity level of his employees in relation to the specific task that the leader is attempting
10

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