1

Leadership
This is an art of motivating employees to achieve objectives and create a competitive advantage
over competitors. This is the action of leading people in an organization towards achieving
goals.
Leadership is an individual's ability to provide guidance to others in an organization. Leadership
is constituted of various elements including transparency, humility, democracy, decisiveness,
communication, creativity, confidence, trust, and learning from failure.

Difference between management and leadership

Management is the process of planning, organizing, guiding and controlling the resources of the
company to achieve organizational objectives.
Functions of management.
1. Planning – this is the process of setting objectives for the organization to achieve.

➢ Strategic planning, which occurs when the company focuses on its long-term
objectives of sustainable growth. The strategy is drafted by upper management and
becomes a framework that guide the long-term plans for the company. For a
manufacturing company, strategic plans may include setting up manufacturing
capacities in newer markets or entering contracts for the procurement of lithium,
which is the most common element in batteries.

➢ Tactical planning, which is relatively short-term, i.e. less than a year. Upper
management is not heavily engaged in these plans instead they are managed by
middle management. Plans, such as sales events, procurement, manufacturing
output, etc., are included in tactical planning.
 2

➢ Operational planning, which is very short-term or daily basis planning and is mostly
taken care of by the low-level managers. This includes daily targets and other daily
goals.

2. Organizing - this involves allocating the right number and quantity of resources to the
relevant departments and people to achieve objectives.

3. Coordinating – this is the process of communicating with other relevant department and
divisions. Eg: communicating the objectives, ideas and suggestions.

4. Commanding – this is the process of guiding, leading and motivating employees to

achieve objectives.

5. Controlling – this is the process of evaluating the performance and comparing it with the
pre-set targets. If the objectives are achieved then employees will be appreciated or the
good work done. And if the objectives are not met employees should be advised and
revise the plan to perform better next time.

Functions of leaders
➢ Setting a clear vision – this means influencing employees to understand and accept the
future state of the organization. A group of new employees at a start-up firm may not
believe or have confidence in a launch approach presented by the new CEO. A good leader
will influence the employees to envision how their duties will impact a successful
outcome. With that influence, the employees will be more likely to feel confident in
moving forward.

➢ Motivate others - leaders should know how to encourage its team, inspire them to action
and help them realize their potential. When a leader can serve as a mentor to their team,
it encourages employees to work hard, produce better work and strive for greater
responsibility in the workplace. Leaders should encourage team members to perform well.

➢ Innovate - A good leader always should try to find out / discover ways or systems to
improve the existing process of work and bring value to the business. They also encourage
other employees of the company to bring new ideas and discuss with them to work on the
best one. Leaders understand that pleasant change is good for the growth of the
 3

organization, encourages employees to come out of their comfort zones and helps them
grow as well.

➢ Delegate – A good leader will delegate work to its members which means assigns tasks or
asks others to take on more responsibilities, often based on business needs. An effective
leader, should be able to determine the team member's unique strengths and delegate
responsibilities accordingly for improved productivity. Leaders also delegate additional
responsibilities to employees to give them opportunities to learn new skills and prove
themselves.

➢ Handle change effectively – come up with an effective plan /system or mechanism to drive
change effectively. This will lead to a proper and clear guideline for employees to work
towards.

• Good managers should have leadership qualities thus should be good leaders but all
managers are not good leaders. Leaders are not always managers.

Characteristic of leaders
▪ Delegation – discussed

▪ Communication skills -leaders should be able to give out messages and instructions clearly
to its employees and other stakeholders and be a good listener. This is important as it
reduce the mistakes thus reduce wastages and reduce cost causing profits to increase. The
quality and effectiveness of communication among leaders across your organization directly
affects the success of the business strategy.

▪ Motivate other
Good leaders should be able to encourage and inspire the team members or
subordinates to perform well and achieve objectives. (already discussed)

▪ Gratitude – good leaders should be thankful thus can lead to higher self-esteem, reduced
depression and anxiety, and better sleep. Gratitude can even make the better leader. Yet few
people regularly say “thank you” in work settings, even though most people say they’d be
willing to work harder for an appreciative boss. The best leaders know how to show
gratitude in the workplace.
 4

▪ Integrity
Leaders should act with authenticity, honesty, integrity, and reliability. Employees need
to know that a leader will behave ethically. That they won’t say one thing and do
another. Or that if they make a mistake, they’ll take responsibility rather than blaming
the team. Integrity means treating employees fairly and upholding the values of the
company. This not only inspires trust in other team members but also encourages them
to act with integrity as well.

▪ communication skills
good leaders should be able to send messages or instructions clearly across its team
members and other stakeholders. This is important to reduce misunderstandings, guide,
lead team members to achieve objectives.
That means effective communication is one of the most important leadership qualities a
person can develop, without it performing other functions will be difficult.

▪ Empathy
This is where the leaders should be able to understand the difficult situations faced by
the subordinates and team members and support them to the best of their ability rather
than just sympathizing them. This takes the leader a long way, as the subordinate will
respect and become more committed and dedicated.
An empathetic leader is compassionate and knows how to connect with others. They
care about the needs and hopes of their team members. Instead of jumping to harsh
conclusions if an employee’s performance drops, they seek to understand the root cause
and provide the possible support.

▪ An eye for talent

Good leaders create new leaders. Part of leadership is choosing the right people for the
job and then helping those people develop their own skills. A great leader can recognize
and foster leadership traits even in the most junior members of the team. Therefore,
help them develop into better leaders.

▪ Emotional intelligence
This is where the leaders should be able to understand their own strengths and
weaknesses and use it to develop the business. And should have the ability to
understand the feelings of other people with whom they deal with and act upon
suitability. Example: understand the difficulties faced by the subordinates and support
them in the best possible way without pressuring them.
 5

▪ Intelligence
Leaders should be able to identify and spot problems with its root cause and suggest
visionary radical solutions to it.

Leadership styles
This refers to the different methods or approaches use in handling people and other
subordinates.
Leadership styles are behavioral characteristics of a leader when managing, guiding, motivating,
and directing. Leaders with great leadership styles inspire political movements and inspire social
change. They motivate others to perform, create and innovate. Leadership styles consist of
excellent communication, creativity, ability to delegate tasks, confidence, and honesty.
There are different styles of leadership. They are:
1. Autocratic style of leadership
2. Democratic style of leadership
3. Laissez-faire leadership
4. Paternalistic leadership style.

Autocratic style of leadership

• This is where employees are expected to follow the instructions given by the top
management, which means their ideas and suggestions are not taken into consideration.
• There is one way communication.
• Close supervision of staff.
• This style works under the motto of 'my way or the highway.' It is the opposite of
democratic leadership.
• Leaders view themselves as having absolute power.
• Authoritarian leaders do not seek the advice of their subordinates.
• An example of an autocratic leader is Vladimir Putin. In his leadership, he has exercised
complete control over his country.
 6

Benefits of autocratic style of leadership

▪ It will provide a guideline for employees to work towards - when clear instructions are
provided to employees, they will clearly know what they should do to achieve the objectives
of the organization. Therefore, employees will not be drifted away from original business
objectives.

▪ Faster decision making - when the employee’s ideas and suggestions are not taken into
consideration time will not be wasted for discussions. Therefore, the Efficiency of the
business would increase leading to higher customer satisfaction.

▪ Quality decisions will be made because the people in the top management will be highly
qualified and experienced. Therefore, it will be taken to benefit the entire organization. This
would help increase the overall efficiency and productivity.

▪ Enhances workplace communication - Autocratic leadership encourages one-way

communication and ensures information reaches the right audience. As the leader clearly
defines goals, expectations, and other information to employees, it helps in simplifying and
enhancing workplace communication. An autocratic leader often sends direct information to
the employees, ensuring accuracy in information.

▪ Improves productivity- As autocratic leaders move information quickly throughout an

organization, they can influence more efficient project completion. An autocratic leader
delivers communication and decision on time, ensuring employees receive every
information required to complete the project on time. Also, such a leader increases
workplace productivity by guiding employees on what to do and how to accomplish their
goals on time. This process has a powerful impact on the employee's performance and
typically results in the consistent delivery of projects.

▪ Reduces employee stress - Although autocratic leaders set workplace rules, regulations, and
guidelines, they play an essential role in eradicating the stress level of employees. These
leaders take full responsibility for their work and reduce the workload and pressure from
the employees. Under an autocratic leader, employees are primarily responsible for
following instructions and meeting work deadlines. This system reduces employee stress
levels so they can remain productive and motivated in the workplace.
 7

Limitations of autocratic style of leadership

▪ Demotivates employees - When employee ideas and suggestions are not taken into
consideration, they would feel unimportant thus job satisfaction would fall. As a result,
efficiency would fall causing wastages would reduce and increase the speed of
production thus reduce productivity. Therefore, less output will be produced.

▪ Lack of new ideas and suggestions - When employee ideas and suggestions are not taken
into consideration no creative and unique ideas are bought to the company. This would
make the business less competitive in the market causing customers to choose
competitors’ products thus lose customer loyalty.

▪ Employees will be less committed and loyal - This is because the subordinates and the
management will not have a good or close rapport, as there is no two-way
communication. As a result, employees will be less committed and dedicated.

▪ Creates dependency on the skills of the leader- As autocratic leadership follows a

structure, it becomes difficult for many employees to adjust to the work environment.
The culture and performance of the organization or team depend upon the values and
ethics of the leader, which can cause a poor work culture. When an inexperienced leader
becomes an autocratic leader, the outcome might not be favorable. For example, if the
leader makes a wrong decision, there's no one to hold them accountable.

▪ Creates a high-pressure working environment - Autocratic leaders make most of the

decisions on behalf of their team, which might make them feel stressed, overwhelmed,
and pressured. If a leader is unwell or unable to make confident decisions, it can affect
the rest of the team, as no team members hold the decision-making power. Though such
a work environment can lower team members' stress levels, it creates a high-pressure
situation for leaders.
 8

Democratic style of leadership

• This is where employee ideas and suggestions are taken into consideration.
• There is two- way communication.
• There is less supervision of staff.
• More information is given to staff.
• It is also referred to as participative leadership.
• In this leadership style, the leader chooses to involve team members in making
decisions.
• The leader always has the final say but listens to the team's input.
• An example of democratic leadership was displayed by Nelson Mandela. He offered help
and guidance to others. He was able to build trust by seeking people's opinions, making
communication a key driver in his leadership.

Benefits of democratic style of leadership

✓ Employees will be motivated – when employee ideas and suggestions are taken into
consideration, they would feel important and valued. This would increase job
satisfaction causing efficiency to incase where wastages would reduce causing speed of
production to increase thus increase productivity. Therefore, more output will be
produced.

✓ New ideas and suggestions will be generated

When employee ideas and suggestions are taken into consideration creative and unique
ideas are bought to the company. This would make the business come up with a USP
thus become more competitive in the market causing customers to choose the
company’s product thus increase sales and profits.

✓ Decisions made will be better

Employees are more informed and aware about the local market conditions, including
the likes and dislikes of consumers. This would allow the company to take well informed
 9

decisions which reflect the likes and dislikes of its consumers. This would help increase
customer satisfaction thus increase customer loyalty.

✓ Employees will be more committed and loyal - This is because the subordinates and the
management will have a good or close rapport, as there is two-way communication. As a
result, employees will be more committed and dedicated which increase employee
loyalty. Therefore, employees would retain in the business without leaving thus labour
turn over would fall causing cost of recruitment and selection to fall.

✓ Team cohesion
Involving people in the decision-making process can help reinforce the company's vision.
Everybody is a part of the group's decision and understands the motivations behind this
decision. They know they are working towards a common goal. It promotes greater
cohesion within the group.

Limitations of democratic style of leadership.

▪ Slow decision making - Taking the ideas and suggestions of employees into consideration
will be time consuming and delay the decision finalizing process. Therefore, the
productive time will get wasted and efficiency would fall.

▪ Performance may falter - Some employees are less able to perform under democratic
leadership because they don't like making decisions. They might also have the
impression that they work harder than the leader.

▪ Not all employees will be able to give out suggestions and opinions for e.g.: unskilled
workers. Therefore, it will not be suitable with such workers.

▪ May not be suitable for large organizations as its not realistic to consult a lot of
employees when having to make a decision.
 10

Paternalistic leadership style

➢ This is a father like approach.
➢ This is Where the decision is made by the top management and expect employees lo
follow it but the welfare or the impact to employees are taken into consideration.
➢ Similar-to autocratic leadership style
➢ Paternalistic leadership is a management style in which a dominant, assertive figure or
person operates as the mother /father whom employees must trust, obey and be loyal
to.
➢ A paternalistic leader fosters a friendly work atmosphere, where employees see their
coworkers as family. The paternalistic leadership style lays huge importance on the
needs of employees and the organization.
➢ Professionals employing the paternalistic management style are concerned about their
workers' best interests. They treat their employees and even refer to them as family.
They expect trust and loyalty above all.
➢ The paternalistic management style involves leaders making one sided decisions.
They inform employees that the decision-makers are acting from a position of
competence and legitimacy. Employees are expected to have faith in their leaders calls
and not question them.
 11

Benefits of paternalistic leadership style

✓ Independence: Employees strive towards working independently. They can

enhance work skills and knowledge, as they have access to career development
opportunities.

✓ Consent: Employees see various rules and guidelines as valuable in their own
interests. Here, consent comes from a place of respect rather than obligation.

✓ High loyalty: Employees believe hard work or loyalty are ultimately recognized and
rewarded. This leads to job satisfaction, motivation, and even retention. Therefore,
cost of recruitment and selection would fall.

✓ Creativity: Employees are able to openly express ideas and opinions without a
feeling of fear. With the freedom to 'think', it encourages innovation and creativity.
Therefore, can come up with a US thus create a competitive advantage over
competitors

Limitations of paternalistic leadership

× Bias- Employees believe this management style is unfair and subjective. Leaders
may selectively favor workers which can lead to jealousy, conflict, and discrimination.
This will create rivalry among employees thus damage team spirit.

× Demotivation - Employees end up feeling unvalued compared to 'favored' and

employees are not actively participating in the decision-making process. This would lead
to job dissatisfaction thus reduce efficiency and productivity.

x Autocratic - Employees may be obliged to 'blindly' follow their leaders, as this attitude
becomes a norm or part of the company's culture. It often leads to them feeling
unresected and they may not be happy to follow the instructions all the time as they
may feel its inappropriate in a given situation. This can lead to job dissatisfaction.

x Inadequate - Employees end up being completely dependent on their leaders. They

experience feelings of incompetence or underqualification (even if they have no reason
to). This is because employees are not given the freedom to make decisions thus no self-
development.
 12

Laissez-faire leadership style

▪ Laissez-faire leadership is a management method that involves evaluating employees
skills and talents and assigning them responsibilities based on their capabilities.
▪ 'Laissez-Faire' is a French word that translates to 'let it be,' hence from these words, the
meaning of leadership can be deduced.
▪ Laissez-faire is also known as delegative leadership. It involves leaving employees to
conduct tasks without overseeing them, as long as their actions do not negatively affect
a company.
▪ It is important to point out that this leadership style is only applicable to intelligent,
skilled, experienced and educated dependable employees who have a forward-thinking
mentality.
▪ Laissez-faire is the opposite of autocratic leadership, where all power resides in one
person and does not consider the opinions of subordinates.
▪ Laissez-faire requires little to no involvement of leaders and employees are mostly
expected to make decisions on their own. This is why laissez-faire leadership thrives well
with excellent and dependable employees.

Example: The late Steve Jobs (the founder of Apple Inc) was said to be a laissez-faire
leader who allowed employees to make their own decisions. This helped Apple create
high-quality products for the technology market.

Laissez-faire leadership is characterized by the following:

o Hands-off approach
o Leaders provide all training and support
o Decisions are left to employees
o Comfort with mistakes
o Accountability falls to the leader
 13

Examples; Here's how laissez-faire leadership could look in different settings:

In school: The teacher is more of an observer while students are able to do as they
wish.4 There is a lack of expectations and discipline in the classroom.5

At work: Leaders and supervisors stand back and let their employees make decisions and
may let them set their own deadlines.2 They don't offer much feedback.3

In government: A political leader who exhibits laissez-faire leadership would leave

decisions to subordinates and provide little direction.

Benefits of laissez-faire leadership

✓ It encourages personal growth - Because leaders are so hands-off in their approach,
employees have a chance to be hands-on. This leadership style creates an environment
that facilitates growth and development because employees get the opportunity to take
decisions and become more responsible which leads to career growth.

✓ It encourages innovation - The freedom given to employees can encourage

creativity which means employees will come up with new unique ideas which helps the
company to innovate and create a USP. Therefore, the company can enjoy a competitive
advantage over competitors which means the customers would chose the company's
product over its competitors.

✓ It allows for faster decision-making. Since there is no micromanagement, employees

under laissez-faire leadership have the autonomy to make their own decisions. They are
able to make quick decisions without waiting weeks for an approval process. This would
increase the efficiency of the company thus increase customer satisfaction leading to
higher brand image

✓ Quality decisions will be made because employees will know the best methods or
techniques to use in order to provide an efficient service. This would increase customer
satisfaction leading to customer loyalty.

✓ Motivates employees+- when employees are given the freedom to make decisions and
do things in the best way. Employees would feel happy and satisfied as they feel
important valued. This would increase job satisfaction thus employees would retain in
the business without leaving. Therefore, reduce cost of recruitment and selection.
 14

Limitations of laissez faire

▪ Lack of role clarity: In some situations, the laissez-faire style leads to poorly
defined roles within the group. Since team members receive little to no guidance,
they might not really be sure about their role within the group and what they are
supposed to be doing with their time. This would lead to confusion thus waste
resources causing cost to increase and reduce profits.

▪ Poor involvement with the group: Laissez-faire leaders are often seen as
uninvolved and withdrawn, which can lead to a lack of cohesion within the
group. Since the leader seems unconcerned with what is happening, followers
sometimes pick up on this and express less care and concern for the project.

▪ Low accountability: Some leaders take advantage of this style as a way to avoid
responsibility for the group's failures. When goals are not met, the leader can
blame members of the team for not completing tasks or living up to
expectations.

▪ Therefore, no one will be clearly held responsible.

▪ No acceptance of what happens (passivity): At its worst, laissez-faire leadership

represents passivity or even an outright avoidance of true leadership. In such
cases, these leaders do nothing to try to motivate followers, don't recognize the
efforts of team members, and make no attempts at involvement with the group.

▪ some employees will take the freedom given for granted thus will not perform
according to the expectations.

If team members are unfamiliar with the process or tasks, leaders are better off taking a
more hands-on approach. They can switch back to a more delegative approach as team
members gain more experience.

Generally, this leadership style is not suitable for:

• Situations where efficiency and high productivity are the main concerns. Some
people are not good at setting their own deadlines, managing their own projects,
and solving problems on their own. Under this leadership style, projects can go
off-track and deadlines can be missed when team members do not get enough
guidance or feedback from leaders.

• Situations that require great oversight, precision, and attention to detail. In high
stakes and high-pressure work settings where every detail needs to be perfect
 15

and completed in a timely manner, a more authoritarian or managerial style may

be more appropriate.

• People who aren't good at setting deadlines or managing projects. Using a

laissez-faire approach in this type of scenario can lead to missed deadlines and
poor performance, particularly if group members are unsure of what they need
to be doing or do not have the skills they need to perform tasks with little to no
direction.
Moving from entrepreneur to leader
Every entrepreneur is not a good leader, its rare to find a good leader in entrepreneurs.
Entrepreneur being a good leader is a beneficial as it gives long run benefits such as motivates
employees to be more committed and dedicated, earn respect, easily achieve objectives etc.
Changing from an entrepreneur to a leader requires certain functional changes, such as:
1. The need for formality
When the business is small it’s usually run and managed informally with no strict rules,
regulation, systems etc. for example, no formal procedures are followed in paper work,
communicating etc. thus the owner can make decisions immediately as the business is
operating in a small scale. However, when the business expand it should follow formal
systems and procedures and the business will have several departments such as HR,
marketing, production, finance etc. or divisions thus to be a good leader formal systems
and procedures should be followed to ensure business performs smoothly and help
achieve objectives by making employees more accountable and responsible.

2. The need for shared ownership

When a company grow it will need more capital to invest and expand thus new owners
will come into the business through the introduction of capital. For example: limited
companies would issue shares to raise capital thus new owners will come into the
business thus ownership and control will be shared which reduces the level of
independence.

3. Greater responsibility to others

When a business expands and become a company a lot of employees will be recruited.
The betterment of the employees and the stakeholders depend on the decisions taken
by the leader. The leader should take the right decision at the right time and support the
stakeholders to ensure the objectives are met.

4. The need for motivation and inspiration

When the business grows the gap between the top level and the employees increase,
leading to job dissatisfaction thus demotivation. So when entrepreneurs become a good
leader they should develop on the skill to motivate the employees. This means
 16

employees should be encouraged and inspired to perform better and achieve objectives
as all employees will not be self-motivated. A good leader will always guide, motivate,
lead, advice and support to perform the task.

5. The need for strategy and vision

When the business is small, they don’t have a clear plan to work towards and no clear
objective to achieve. This is because owner performs all functions like purchasing,
marketing, finance etc and they consider only on the days sales mainly. However, when
the business expand specialist will be recruited to work for each functional department.
And the leaders will build clear objectives and plans (strategy) for the company to work
towards. Eg: Richard Branson, the owner of virgin group is a successful leader.

The difficulties in developing from an entrepreneur to a leader

➢ Adopting the mind set

To be a good leader the person should overcome the ego they have as an entrepreneur.
And Leaders need to be open to new ideas and willing to adapt to changing
circumstances. They should be willing to give responsibility and delegate work to
subordinates. A good leader should always trust the subordinates and give them the
responsibility and authority to perform different tasks by helping them develop their
skills. And should over come the attitude of they should do everything on their own to
get it right thus trust is important. Giving out responsibility and trusting the employees is
an important quality of a good leader.

➢ Stress
Running a business is very stressful because if it’s not successful the owners and the family
their living standards would fall. Especially running and managing a large business is very
stressful unlike going for a job and getting a guaranteed salary. Eg: how to solve the cash
flow problem and from where to obtain finance, will the products sell well etc. conflicts with
different stakeholders will also lead to stress because it’s difficult to fulfill the needs of all
stakeholders thus solving disputes etc involves a lot of burden.
➢ Sharing ownership and control
Sometimes when the business expand new owners come into control as they invest capital
thus ownership and control will have to be shared thus profits and decision making will also
have to be shared which most owners dislike. This is problem because there will be conflict
in decision making and the business will not function the way the original owner wants thus
make them unhappy.
 17

➢ Trust
As a leader, it's important to trust your team members to do their jobs effectively. It's also
important to verify that tasks are being completed correctly and on time. Finding the right
balance between trusting your team and verifying their work can be a challenge. Trusting
subordinates is a very important quality of a leader as the opportunity should be given for
employees to take up responsibilities and challenges. This makes a good leader as
employees will feel valued and confident.
➢ Lack of leadership qualities
Some entrepreneurs may lack leadership skills such as communication skills, emotional
intelligence, intelligence to solve problems quickly, skill to motivate and guide employees
etc. However, when the company grows these skills. A high-profile leader who is well
reputed will have to communicate with other high-profile leaders for example: presidents of
other countries. Therefore, should have good communication skills such as communicate
clearly with proper language and know different languages to communicate with strong
leaders in other countries.
➢ Emotional intelligence
Leaders need to be able to understand and manage their own emotions/feelings, as well as
the emotions/feelings of their team members. Many entrepreneurs are used to being driven
by passion and enthusiasm rather than emotional intelligence and empathy. Building on
emotional intelligence will take the owner a long way as employees will be highly satisfied
thus commitment and loyalty would increase. This would help the leader earn respect.

Overcoming difficulties
➢ Delegation and trust

➢ Earn respect

➢ Maturity and experience

➢ Education

➢ Reduce stress
18
19