The Importance of Leadership (CIE A Level Business)

• Leadership is about having a vision, sharing that vision with others and providing direction
  
  • Leaders can inspire and motivate others to work towards a common goal
    • This contributes to the meeting of aims and objectives and supports the development of a motivated workforce
       
• Leaders must also be prepared to pursue a new direction, or even step aside, when circumstances change
   
  
• While some managers may be good leaders, not all leaders have a management role
  
  • Employees will follow a manager's direction but may not be truly inspired to support the manager in achieving ambitious business goals
     
• Leadership is necessary in many different contexts
  • A leader in sport could be the captain of a national football or basketball team
  • A political leader could be a president, leader of a political group or trade union

• Leaders in a business are often, though not exclusively, employed in management roles
  • Directors are senior managers, elected to their posts by shareholders at the annual general meeting
  • Managers are employed to organise resources and make decisions relating to people and operations within their area of responsibility
  • Supervisors are directed by managers and lead the day-to-day performance of a team to achieve its goals
  • Employee representatives are chosen by their peers to act on their behalf when holding discussions or raising concerns with managers
    
    
• Informal leaders with significant influence often emerge in businesses
  • Informal leaders could be popular, trusted colleagues, experienced or long-standing members of staff or individuals with strong, persuasive personalities
  • In some cases, informal leaders are appointed to management positions to capture and utilise their influence
  • Otherwise, taking steps to involve and reassure informal leaders can persuade them to support business objectives
    • This can be a powerful way to gain trust and buy-in of employees

• Good leaders commonly have a range of broad talents
  • They are likely to have context-specific skills and a broad understanding of business issues
  • They will have suitable experience and expertise
  • They will possess personal characteristics such as honesty, ethical standards and patience when dealing with others
  • They will be excellent communicators, able to inform, persuade and inspire others
    
    
• According to research carried out by Harvard Business School, leaders aren’t born with superhuman capabilities
  • Leadership qualities cannot be taught; rather, they are learned from experiences and facing adversity
  • They tend to have intentionally put themselves in situations where they have to learn, adapt, and grow a range of important qualities
     

Qualities of good Leaders

• Emotional intelligence (EI) is an individual's ability to understand and manage their own emotions and feelings, as well as those of others
   
• Daniel Goleman's framework of four components that make up emotional intelligence includes skills that can be developed and improved to make managers more effective leaders
  
  

Diagram: Goleman's Four Competencies of Emotional Intelligence

Goleman's Four Competencies of EI categorises personal and social skills that can make managers effective leaders

Self Awareness

• Self awareness is the ability of an individual to read and understand their emotions and recognise their impact on others 
• Skills that can be developed include emotional self-awareness, self-assessment and self-confidence 
• The more leaders are aware of their feelings, the easier they are to manage when responding to others
  • Emotions can be unintentionally shared with others, through facial expressions and other nonverbal behaviour
  • Positive emotions towards others can influence them to cooperate and work towards shared goals
    
    

Social Awareness

• Social awareness is the ability to accurately notice the emotions of others and read situations appropriately
• Skills that can be developed include empathy, organisational awareness and service
• It involves leaders sensing what other people are thinking and feeling, taking into account their perspectives and being empathetic
  • Leaders should be able to identify others' frustration with the task at hand and respond in a way that can prevent further negative emotions
  • Strong empathy skills also help leaders get along better with others who see things differently from them to avoid misunderstandings and conflict
    
    

Self Management

• Self management is the ability of a leader to manage their actions, thoughts, and feelings in flexible ways to achieve goals
• Skills that can be developed include self-control, transparency and optimism
• It contributes to a sense of well-being, confidence and a sense of connectedness to others
  • Effective leaders can cope effectively even in the most challenging of working relationships
  • They can concentrate on the task at hand rather than being distracted by negative thoughts or emotions
    
    

Relationship Management

• Relationship management is the ability of a leader to take their own emotions, the emotions of others and the context to manage interactions with others successfully
• Skills that can be developed include bond building, conflict management and teamwork
  
  • Leaders sense other’s reactions to the situation and fine-tune their response to move in a positive direction
  • In this way, leaders influence those around them to make a good decision that is accepted by all