1.1 Explain the link between strategic management and leadership? Management is coping with complexity". The growth of large organisations led to the creation of management hierarchies as a method of maintaining control over things such as planning, budgeting, reporting, supervising and so on. Good management means that, even in the most complex of organisations, things happen in an orderly and controlled fashion. Leadership however, is about the process of initiating and coping with change, now a vital factor with significant changes in technology, competition, regulation, economic and demographic changes occurring more and more frequently. Stephen Drotter, co-author of “The Leadership Pipeline” points out that “Today’s organisations need effective leaders at every level and in every location”. Controlling and problem solving is the job of management whilst leadership focuses on motivating and enabling others to work towards new goals. The differences between these activities can be summarised as follows. Planning and budgeting vs. setting direction.
Planning and budgeting (whether short or long-term) are by definition intended to produce orderly, expected results. Direction-setting is about defining where we need to change and laying out the new direction. It need not be a mystical process but can relate to a hard-headed analysis of what is necessary in a critical situation. The output of direction setting is a vision or a strategy rather than a plan, but this does not imply that the vision is an ethereal concept that only the creative, psychic, or users of hallucinogenic drugs can produce. For example, the stated vision of Scandinavian Airlines was at one time to be "the best airline in the world for the frequent business traveller". Far from being an altruistic aim, any observer of the airline business would know that this could be translated as "To corner the most lucrative segment of the market airlines market". The success of a vision is not its originality, but the ability to translate it into meaningful action through energizing others. Having this sense of direction is a leadership function, which long term planning (the management analogue) is not a substitute for. Organizing versus inspiring and aligning.
Modern organizations are complex, interconnected, and contain many dependencies. To create significant change therefore requires the persuasion of a significant group of people to align themselves to the leader's vision and to move together. Many companies assume that change has been achieved when the old organisation chart has had the old reporting lines erased and new lines drawn in. However, this is analogous to changing the labels on the buttons on a control panel, without changing the connections to the things they operate. Even ignoring the need to change processes to reflect organisational changes (itself a management activity), the vital communications task of aligning people (to use Kotter's word) is a key leadership activity in getting commitment to work for rather than against the change. As well as getting the message across it means enabling people to take the necessary actions to "make it happen", particularly if taking initiative has historically been a risky activity in the company culture. This sort of culture change is not something that one can make rules for. Motivating versus controlling and problem solving.
If direction setting is about setting the direction, and aligning is about persuading people to start moving along the new path, motivating people is the factor that keeps them moving and helps them to overcome obstacles. This process begins at the vision stage by expressing the vision in a way that appeals to common values and makes achievement of the new direction important to those being led. It involves supporting efforts by coaching, feedback and role modelling (the word "leading" in English has a connotation of being out in front). It involves providing...
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