Comparing Management and Leadership

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Effective leaders know they get the best efforts out of people by working with them, by helping them do their best, and by showing them how to be more productive.  Managers perform managerial functions, coordinating human, material, and financial resources to accomplish objectives.  As a business owner, you will find you are both a manager and a leader.

Manager is often used synonymously with other terms such as executive, administrator, supervisor, and boss.  Regardless of the specific term or the particular context, the basic functions of a manager remain the same.  They are:  

Planning – Deciding who, what, when, where, why and how things will be done, in view of the organization’s goals, develop and interpret policies, manage budgets and continuously improve methods of performing specific tasks.

Organizing – Prepare schedules, delegate tasks and monitor programs through timetables or measurable objectives.

Staffing – Advise and support employees, hire and promote, evaluate performance, and develop and reward employees.

Directing – Motivate, inspire, and communicate with employees for better understanding, ownership and commitment, and seek to reduce response or process time by encouraging innovation.• Controlling – Measure performance, establish standards and measurements of quality and service, prevent and correct problems that impede effectiveness, and obtain feedback for current and future projects.

Businesses become effective and efficient by doing the right things, in the right way, at the right time, and with a high ratio of output to input.  Achieving excellent performance and ensuring the continuing capability to perform is the job of management.  It means getting quality work done on time.  Managers share functions but they vary in styles of leadership, formal and informal backgrounds and personalities.  Effective managers are decisive and have strong goals and ambitions.  They are perceptive and can see the parts as a whole.  They value common sense and are life-long learners.  As the owner and manager of your business, you have a strong desire to achieve your objectives by making decisions and solving problems.  You also provide leadership by example.                                        

Now let’s look at leadership.  Leadership implies that a person is a good leader, that he or she is doing something right.  We think of a leader as someone who attracts others to him or her, someone others naturally follow.  Some characteristics that seem to help are having energy, enthusiasm, interpersonal skills and power.  When dealing with your employees, you have legitimate power as their boss, so they should naturally follow you.  Different leaders have different styles and their subordinates have individual differences, such as work habits, values, and personalities.  Managers and leaders need communication skills to discuss performance, give credit, and listen to subordinates.  There are major differences in the extent to which a subordinate fits or doesn’t fit with the leader.  Those that are seen favorably by the leader are part of the in group while those who are in disfavor are the out group.  People usually know to which one they belong.  The in group tends to be more satisfied with their jobs than the out group.  Leaders have to be careful that they do not let their feelings of liking influence their more formal judgments of and behavior toward their subordinates.  It is important to have all employees participate and gain their confidence by knowing them personally.

As you can see from this brief information about managers and leaders, a business owner will be both.  You don’t have to be an expert in everything to be a successful business owner, but it helps to know enough to understand what is happening.  You can hire employees or individuals or companies outside the business to do some of your work.  You have an advantage as a business owner in that you know your business and have a vested interest in it.  Do what you do best and depend on others to work for you to make your business successful.

  • Author: Pat Jones
  • Title: President/Owner - Business Broker
  • Company: Pat Jones Business Brokers
  • Company Website:
  • Date: February 14, 2018
  • Category: Buying a Franchise or Business
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