Introduction

Whereas leaders have existed in some sense ever since man first emerged, managers are a
fairly new concept developed to cope with the intricate structures of the modern
multidimensional organizations (Kotter 1990, Kotterman 2006). Managers are the
people who run these complex organizations. They are the ones in charge. In everyday
language, terms for a leader and a manager are often used interchangeably (Kotterman
2006). Leadership has been a topic of interest for a long period of time. However, from
Ancient philosophers' texts to Machiavelli's The Prince, early literature on leadership
tends to be mainly prescriptive. In the 19th century leadership research began to focus
more on theoretical aspects, and ever since a vast amount of leadership theories have
been published. (Bass & Stogdill, correct form?) Extending through Carlyle's theory of
the Great Men through the Contingency theories of the 1950's and 60's to the more
recent theories of more transformational and distributed leadership, just to name a few
(Bryman et al. 2011). However, there is still no clear consensus of the definitions
(Burns 1978, Barker 2001, Toor 2011). The concept of leadership has been viewed
from a large variety of angles, the focus has for example been in the behaviour,
attributes, situation, followers or goals of the leader (Yukl 1989). Grint (2010) proposed
that the definition of leadership generally tends to fall into one of the four following
categories: a position, person, result or process-based leadership.
Theories of transactional and transformative leadership form a major part of modern
leadership studies. They originate from James MacGregor Burns' research into political
leadership in 1978 and have since been subject to great deal of research and debate
(Bryman et al. 2011). Transformational leader is defined as one that leads by inspiring,
motivating and by contributing to followers self-worth in order to achieve the desired
outcome, whereas transactional leadership is based more solely on rewards and
punishments as exchanges between the leader and the followers. Wages, bonuses and
employment contracts are often seen as some of the rewards, while informal and formal
warnings, and termination of employment contract as possible punishments (Burns 1978,
Bryman et al. 2011).
The four key components of transformational leadership, as presented by Bass and
Riggio (2006) are idealized influence, inspirational motivation, intellectual stimulation
and individualized consideration. Idealized influence means that the leader has an
emotional connection and serves as a role-model for his followers. The followers respect
their leaders. In accordance with inspirational motivation, leaders motivate and get their
followers excited about the shared goal. This is also often seen as a major part of a
charismatic leadership. In intellectual stimulation, followers are encouraged to embrace
their creativity and bring forward their visions and ideas. Individualized consideration
means that the leader sees every follower as an individual and develops a personal
relationship with them. He provides support and encouragement according to the
followers individual needs (Bass & Riggio 2006).
For the purposes of this essay, we limit our view solely on the transformative leadership
theory in the aid of identifying the key differences between a leader and a manager. As

such, this paper should be read more as a light overview of differences in theoretical
aspects of leadership and management, instead of a prescriptive guide to how leaders and
managers should behave according to academic literature.

Key distinctions
Leadership is often seen as heroic and somewhat mystical whereas management as
mundane and even boring (Alvesson & Sveningsson 2003, Capowski 1994). As
followers we still seem to search for the heroic individual to guide us, and often give
credit to the persons who seem to be in charge when actually the results were doings of a
multitude of individuals within the organization (Bennis 2003, Bryman et al. 2011,
Grint 2010, Zaleznik 1977). In some cases, even though not directly stated, the view
seems to be that leaders are seen as good whereas managers as bad, or at least as better
and worse.
There appears to be at least two different [core] views on management and leadership in
academic literature. While some academics perceive management and leadership as
complementary entities, others differentiate the two concepts to some extent (Bennis
1989, Kotter 1990, Kotterman 2006, Yukl 1989, Zaleznik 1977). The main debate
seems to focus on how much the two concepts intertwine. In the same way as the
literature has a vast amount of different definitions of the concepts, there also seems to be
listed as many differences as there are academics writing about the field. Some of the
literature is based on academics' on personal opinions, some rely on quotes from famous
corporate and world leaders and some draw from empirical research and interviews from
top executives in different sectors (Toor 2011). However, some of the key differences
seem to revolve around goals, personalities, relationships and forms of power. We will
now focus more on these key differences.

Goals & personalities

Where leaders aim to innovate, create and change the order of things, managers' main
goal is to run the day-to-day operations, organize and maintain the order as it is. Leaders
envision and try to find new ways of doing things and find solutions to new problems.
Leadership focuses in the future while management sticks to the present (Grint 2010,
Zaleznik 1997).
One of the main purposes of a leader is to achieve change (Grint 2010, Kotter 1990,
Zaleznik 1977). Acording to Kotter (1990, p. 104) this setting direction is different
from the planning that managers do. It is more about visioning and drawing general lines
than producing clear step-by-step
Student Number: 1225129

strategies to execute. Using the Scandinavian Airline Systems as an example, Kotter

(1990) argues that this vision does not actually have to be original. CEO of SAS, Jan
Carzlen, utilized a common idea of airline companies to attract frequent business

travellers as the company's strategy and succeeded in making SAS one of the top airlines
in the world.
Leaders pursue their goals because of their passion and dream, they have envisioned
something and they have the desire to achieve it. This distincts them from managers,
whose attitude towards goals seems to be set by what is expected of them, they try to
achieve the goals deemed necessary by corporate culture and shareholders (Zaleznik
1977). Simply envisioning is not enough. Leaders need to inspire their followers to share
their passion and work for the common goal. In order to do this, leaders need to have
credibility and be respected as well as have good relationships and communication
networks with their workers (Kotter 1990). All of which are qualities often seen in
transformational leaders (Bass & Riggio 2006).
Even in a situation where an organization may need a fresh course the most, the change
may be difficult to achieve. When the leader-like individuals envision and come up with
new ways to do things, they may face opposition and resistance by the people above, and
even below, them in the hierarchy. This going against the tide results them being
supressed by the more conservatist managers who just try to uphold the status quo. The
fear of change and the implications it may cause steps in (Kotter 1990, Zaleznik 1977).
Regardless, being able to to adjust and keep ahead of game is vital, especially in the
modern, globalized world (Capowski 1994).
Lack of change might cause great distress to a once powerful organization. Nokia, once
the clear winner of the mobile phone arms race, ended up losing its dominant position to
the more innovative companies like Apple and Samsung (Worstall 2011). Share prices
have plummeted over the years and are now one tenth (as quoted in OMXH) what they
used to be. Of course this cannot be regarded as the only reason, but is arguable one of
the main reasons for Nokia's demise. (Are the two previous paragraphs actually relevant
at all? Combine these two into few sentences and use the word count to write more indepth analysis of relevant info?)
Managers try to upkeep the current status of affairs. Their maintenance work is as vital to
the organization's survival as leader's innovation. As Capowski (1994, p. 13) so well put
it: Vision without any kind of structure will reap chaos. Zaleznik (1977) sees managers
as reactive and impersonal problem-solvers. Managers are deemed to be rational, they
merely plan and supervise the process as well as fix previously occurred problems.
Having both functioning management and leadership is important in running a successful
organization.

Relationships and authority

Where managers tend to have formal relationships with their subordinates, effective
leaders require informal and active personal relationships across the organization. Trying
to guide the entire organization towards a common vision requires communication and

coordination. Managers can control the subordinates with bureaucratic mechanisms but
leaders need to resort to these relationships in order to further enchance the changing
process, especially in large multistructural organizations (Kotter 1990). According to
Zaleznik (1977, p. 74) managers prefer to communicate with indirect signals instead of
messages in order to make their saying more open to intepretation and thus being able
to control the direction of the dialog. Leaders on the other hand try to express themselves
clearly and to involve their subordinates in the decision-making process giving them
some sense of control (Capowski 1994, Kotter 1990, Zaleznik 1977). Participating in
mundane affairs like small talk, gossip and listening is seen as an important part of
leadership and efficient management (Alvessong & Sveningsson 2006).
In most of the literature examined in the making of this essay, adjectives used to describe
both managers and leaders are very common with what are used to describe transactional
and transformational leadership. According to Zaleznik (1977, p. 74) subordinates often
describe their managers as inscrutable, detached and manipulative. Leaders were
described with adjectives rich in emotional content. Like in individualized
consideration, leaders also teach their followers and help them become leaders (Bass &
Riggio 2006). Managers also develop relationships with their followers but according to
Zaleznik (1977, p.73) they only maintain a low level of emotional involvement.
Leaders on the other hand may develop a mentor-apprentice-relationship with the
follower, and thus contribute to the development of the follower's leadership abilities.
Another key distinction can be found in authority. The origin of manager's authority and
power comes from the formal position they hold within an organization. People work for
their managers because of the economic incentives they provide (Kotter 1990). Leaders
on the other hand gain most of their influence from their subordinates' will to follow
them. Their authority is thus based on personal traits and respect as in idealized influence
(Alvesson & Sveningsson 2003, Kotterman 2006, Yukl 1989, Zaleznik 1977). These
transformational qualities are complemented with transactional exchanges (Bass &
Riggio 2006), as in traditional work-place scenarios the followers
naturally also look for economic incentives. In this sense, traditional definitions of
management and leadership overlap with transactional and transformational elements.
Some leaders also get part of their power from their position, but not all have formal
titles (Bass & Riggio 2006). It is possible to be a visionary leader without a managerial
position. Some famous leaders like Martin Luther King or Mohandas Gandhi achieved
great change in the society without holding a formal management title. They succeeded in
transforming their passion and vision to their followers gaining huge support. However,
according to Yukl (1989) this authority is easier to lose