Paper F1

Accountant in Business (AB)

Chapter 4 Leadership Management Supervision

Ch.4--Leadership, Management & S L d hi M Supervision i i

1.Introduction

2.Theories of Management

3. Authority & Responsibility

4. Leadership Theories

5. Leadership Styles

1. 1 Introduction
1.1 Leadership 1.2 Managers 1.3 Supervision

1.1 Leadership 11
A leader is someone who exercises influence over someone other people Leadership is an interpersonal influence directed toward the achievement of a goal or goals Interpersonal - between people Influence the power to affect others Goal something that we need/want to achieve

1.2 1 2 Managers
All managers aim is to get things done delegating managers done, to other people rather than doing everything themselves Management is the effective use and coordination of resources such as capital, plant, materials and labor to achieve defined objectives with maximum efficiency

1.2 1 2 Managers
Management can be considered as: g Function the responsibility for directing and running an org. Process it incorporates activities by which internal and external resources are combined to achieve the objectives of the org.. (people, money, machines, materials)

1.2 1 2 Managers
Management can be considered as: Discipline a substantial body of knowledge on mgt and its functions which enables managerial competence to be achieved in a short time. Mgt is considered both a science and an art time art. P f Profession i a type of higher grade non-manual occupation with both subjectively and objectively recognized occupational status; possessing a well-defined area of study or concern and providing a definite service after advanced training and education

1.2 1 2 Managers

Leader = Manager ? g
A leader can be a manager A manager is not necessarily a leader If a manager is able to influence people without using formal authority to do so, then the manager is demonstrating leadership

1.2 1 2 Managers
Manager Leader

Administers

Innovates

Relies on control

Inspires trust

Has his eye on the bottom line

Has his eye on the horizon

1.3 1 3 Supervision
The supervisor is part of the mgt team The supervisor is a person given authority for planning and controlling th work of th i group, b t all th can d t lli the k f their but ll they delegate to the group is the work itself A supervisor is a type of manager whose main role is to ensure that specified tasks are performed correctly and efficiently by a defined group of people Supervisors will also be doing operations work and giving advice to others to help solve problems. If the more senior manager is absent, the supervisor will take over the role.

1.3 Supervision
Supervisors roles:
The interface between the management and the workforce Front line resolving problems first hand and often having to resolve problems quickly Often need to have direct knowledge of employment legislation Often have responsibility for negotiation and industrial relations within the department Management tasks and operational work to perform Day-to-day detailed internal information (manager medium-term internal and external information)

2. Theories of management 2
2.1 Classical Theories 2.2 2 2 Human Relations School 2.3 2 3 Modern Approaches

Taylor Fayol Elton Mayo Mintzberg Drucker

2.1 2 1 Classical Theories

Taylor & Fayols beliefs: Fayol s one best way to - organize the firm - do the individual job Emphasis on the task to be done rather than the person doing it M i f t Main features: - belief in one controlling central authority - specialization of t k i li ti f tasks - fair pay and good working conditions decided by mgt - clear li l lines of command f d

2.1 2 1 Classical Theories

Taylors 5 areas of management P.54 for details):

Forecasting & Planning Control C Co-ordination di ti Organization Command ?

2.1 2 1 Classical Theories

Taylors applied 14 rules of managerial conduct P.55 P 55 for details)

2.1 2 1 Classical Theories

The implications of Taylors scientific p y management: Workers should be set high targets but should be well rewarded for achieving them Working methods should be analyzed scientifically including the timing of work Management should plan and control all the workers efforts

2.1 2 1 Classical Theories

Modern arguments about management theories:
It is not always a best way of doing a particular job Employees can often have considerable insight into a job and can make important suggestions for improvements Many workers can be motivated by other methods than tight control and financial reward

2.2 The Human Relations School 22 Mayo s Mayos view:

Group relationships and management-worker communication were far more important in determining employee behavior than were physical conditions and the working practices imposed by management. Wage levels were not the dominant motivating factor for most workers workers.

2.2 The Human Relations School 22 Further i F th view:

Employee behavior depends primarily on the social and organizational circumstances of work Leadership style, group cohesion and job satisfaction are major d t j determinants of the outputs of the working i t f th t t f th ki group Employees work better if they are given a wide range of tasks to complete Standards set internally by a working group influence employee attitudes and perspectives more than standards set by management y g

2.2 The Human Relations School 22 Negative view: N ti i The approach possibly overestimates the th commitment, motivation and desire it t ti ti dd i to participate in decision making of many employees.

Test your understanding

P.57 P 57 - 58

2.3 Modern Writers 23

Contingency approach ( no one best approach ) (no approach) contingency theorists do not ignore the lessons learnt from earlier theorists but adapt them to suit particular theorists, circumstances Behaviouralism concerned with the personal adjustment of the g individual within the work org. and the effects of group relationships and leadership styles Systems theory expresses a managers role as being a coordinator of the elements of a system of which people are only one part

2.3 Modern Writers 23

Druckers 5 basic operations of a manager (P.59 for details): (P 59 f d t il ) S t objectives Set bj ti Organize Motivate & Communicate Establish yardsticks Develop people

2.3 Modern Writers 23

Mintzbergs 10 skills that managers need (P.60 for details): Interpersonal Figurehead Leader Liaison Informational Monitor Disseminator Spokesperson S k Decisional Entrepreneur Disturbance handler Resource allocator Negotiator

3. Authority, Responsibility and Power Concepts Authority is the right to give orders and the power to exact obedience (Fayol) Authority is the right to do something or ask someone else to do it and expect it to be done Authority is thus another word for legitimate power

3. Authority, Responsibility and Power Concepts

Line Authority is the aut o ty a manger has o e a e ut o ty s t e authority a ge as over subordinate down the vertical chain of command Staff Authority is the authority one manager or department may have in giving specialist advice to another manager or department, over which there is no line authority. Functional Authority is a hybrid of line and staff authority where a manager setting policies and procedures for the company as a whole has the authority in certain circumstances to direct, design or control activities or procedures of another department

Test your understanding

P.62 P 62

3. Authority, Responsibility and Power Concepts

Responsibility is an obligation placed on a person to fulfil a task which he/she has been given. given Responsibility is the obligation to use delegated powers Managers and supervisors are ultimately responsible ( ibl (accountable) f th actions of t bl ) for the ti f their subordinates Responsibility is an obligation owed, so it can not be delegated

3. Authority, Responsibility and Power Concepts

John French and Bertman Ravens 5 sources or Raven s bases of power (P.62-63): Reward power Coercive power (negative side of reward power) Expert power Referent power Legitimate L iti t power

3. Authority, Responsibility and Power Concepts

Having responsibility w/o authority frustrated, fr strated stressed and demoti ated demotivated

Having authority w/o responsibility may exercise their authority in an irresponsible way

Test your understanding

P.64

4. 4 Leadership theories
4.1 Trait theories (qualities approach) 4.2 The ti 4 2 Th action-centered approach (Ad i ) t d h (Adair) 4.3 The contingency approach (Fiedler) 4.4 Transformational leadership (Bennis) 4.5 Managing change (Kotter) 4.6 4 6 Leadership to mobilize (Heifetz)

4. 4 Leadership theories
4.1 Trait theories (qualities approach) 4.2 The ti 4 2 Th action-centered approach (Ad i ) t d h (Adair) 4.3 The contingency approach (Fiedler) 4.4 Transformational leadership (Bennis) 4.5 Managing change (Kotter) 4.6 4 6 Leadership to mobilize (Heifetz)

4.1 4 1 Trait theories (qualities approach) ( qualities approach ) Assumption: leaders were born and not made Leadership qualities:
- physical traits: drive, energy, appearance - personality traits: adaptability, enthusiasm, confidence - social traits: co-operation, tact, courtesy - other traits: ambition, fairness, integrity, initiative, etc..

4.2 4 2 The action centered approach (Adair) action-centered

Adair: any leader has to strive to achieve 3 major g y j goals while at the same time maintaining a position as an effective leader Adairs ti Ad i action: Task needs: setting objectives, planning tasks, allocating of responsibilities, setting performance standards Group needs: communication, communication team building, motivation, discipline building motivation Individual needs: coaching, counselling, developing, motivating

4.3 4 3 The contingency approach(Fiedler)

Fiedler: studied the relationship between leadership style and effectiveness of the work group. k Fiedlers 2 styles of leader: - Psychologically Distant Managers (PDMs) - Psychologically Close Managers (PCMs)

4.3 The contingency approach(Fiedler) ---- Psychologically Distant Managers (PDMs)

Maintain distance from their subordinates by formalizing roles and relationships within the team Are withdrawn and reserved in their interpersonal relationships Prefer formal communication and consultation methods rather than seek informal opinion Judge subordinates on the basis of performance and are primarily task-oriented Fiedler found that leaders of the most effective work groups actually tend to be PDMs

4.3 The contingency approach(Fiedler) ---- Psychologically Close Managers (PCMs) - Do not seek to formalize roles and relationships - Prefer informal contacts to regular formal staff meetings - They are more concerned to maintain good human relationships at work to ensure that tasks are carried out efficiently - Fiedler concluded that a structured style works best when the situation is either very favorable or very unfavorable to the leader - A supportive style works best when the situation is moderately f d t l favorable t th l d bl to the leader - Group performance would be contingent upon the appropriate matching of leadership styles and the degree of favorableness of the group situation for the leader

4.3 The contingency approach(Fiedler) The leadership is made up of 3 key variables: p p y The relationship between the leader and the group (trust, respect , etc.) The extent to which the task is defined and structured The power of the leader in relation to the group

4.4 Transformational leadership (Bennis) The leadership is made up of 3 key variables: Transactional leaders
see the relationship with their followers in terms of trade: they give followers the rewards they want in exchange for service, loyalty and compliance

Transformational leaders
see their role as inspiring and motivating others to work at levels beyond mere compliance. Only transformational p g g leadership is said to be able to change team/orgl cultures and create a new direction

4.4 Transformational leadership (Bennis)

Benniss 5 B i avenues of change: f h Dissent and conflict Trust and truth Cliques and cabals External events E t l t Culture or paradigm shift

4.5 Managing change (Kotter)

Kotters K tt 5 approaches t d l with resistance h to deal ith i t (P.68-69 for details) Participation and involvement Education and communication Facilitation d F ilit ti and support t Manipulation and cooperation Negotiation and agreement

Test your understanding

P.69

4.6 Leadership to mobilize(Heifetz)

Heifez argues that the role of the leader is to help people face reality and to mobilize them to make change. Leaders have 2 choices: - technical change: the application of current knowledge, skills or tools to resolve a situation - adaptive change: is required when the problem cant be solved with existing skills and knowledge and requires people to make a shift in their values, expectations, attitudes or habits of behavior

4.6 Leadership to mobilize(Heifetz)

Heifetzs 4 principles for bringing about adaptive change:
Recognition that the change requires an adaptive approach and understanding the values that need to be shifted and th i d t di th l th t d t b hift d d the issues th t that need to be resolved to make the shift possible Adaptive change causes unhappiness in the people being led; adaptive change requires the right level of stress to be applied: too little stress and too much stress Keep focused on the real issue of realizing the change; do not spend p g g ; p too much time on stress-reducing distractions Ensure the people who need t make th change t k responsibility E th l h d to k the h take ibilit and face the reality of doing the work of change for themselves

5. Leadership styles 5
5.1 Blake and Mouton 5.2 Ashridge

5.1 Blake and Mouton 51

Concern for production Concern for people (P.70 for the detailed grid)

5.1 Blake and Mouton 51

Benefits The grid shows areas where mgt faults can be identified and then provide the basis for training and for mgt development As an appraisal and mgt development tool to inform managers that attention to both task and people is possible and desirable Managers can determine how they are viewed b th i subordinates i d by their b di t Drawbacks The grid assumes that leadership style can be categorized into the two y g dimensions and that results can be plotted on the gird The position of team mgt is accepted as the best form of leadership. This may not be practical or indeed advisable. In many industries, concern for the task may be more important than concern f people, and visa versa for l d i and will always depend on the individual situaiton

5.2 5 2 Ashridge
Ashiridge Mgt distinguished 4 different management styles:
Tells (autocratic) the manager makes all the decisions and issues instructions which must be obeyed w/o question Sells (persuasive) the manager still makes all the decisions but believes that team members must be motivated to accept them in order to carry them out properly Consults (participative) the manager confers with the team and takes their views into account although still retains the final say Joints (democratic) the leader and the team members make the decision together on the basis of consensus

5.2 5 2 Ashridge
Management /Leadership Styles Tells (autocratic) Sells (persuasive) Advantages quick decisions the most efficient type for highlyprogrammed work team members understand the reason for decisions team members may be more committed team members may be able to function slightly better in the absence of instruction Disadvantages communications are one-way doesnt encourage initiative or commitment from subordinates communications are largely one-way team members are not necessarily motivated to accept the decision it still doesnt encourage initiative or commitment

Consults (participative)

involves team members in decisions consensus may be reached the quality of the decision may benefit from the input of those who do the work encourages upward co e cou ages up a d communication u cat o can provide high motivation and commitment empowers a team member to take the initiative shares other advantages of the consult style

may take longer to reach decisions team member input may not enhance the quality of the decision consultation can be a faade for a basic sells sty e se s style may undermine the authority of the manager may further lengthen the decision-making decision making process may reduce the quality of the decision because of the politics of decision making

Joints (democratic)

Chapter Summary

P. P 74

Exercises
Text Book (P. 599-600): Ch.4 Exam Kit (P.6-9): Ch.4 (P.6 9):