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The research in the field of management and leadership has enhanced the practical application of theories, paradigms and concepts. The difference between the two notions is still a controversial issue of management and leadership theories: most researchers agree that management and leadership should be differentiated (Kotter, 1990). Qualities needed for effective management are easier to define and develop, while leadership characteristics are inborn and more complex. However, this differentiation is important in theories and frameworks which concentrate on the personality, while the recent shift to the contingency approach in management and leadership has diminished the significance of this issue.

The Evolution of Management and Leadership Research: Theory and Practice

The recent shift from trait- or personality-based theories to the situational and participative theories has changed the notion of leadership and the way leaders are perceived (Avolio, Walumbwa, & Weber, 2009). Starting from the Great Man theory, trait and behavioral theories, the focus was on the personality of a leader and the ability to lead the followers using proper leadership skills. Contingency theories are based on this approach to a certain extent but underline the importance of the circumstances in which leadership must be exercised (Al-Sawai, 2013). Transactional theory is more appropriate for traditional businesses nowadays, while transformational leadership seems to satisfy the demands of contemporary organizational environments in terms of outcome and employee satisfaction.

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While previously leadership skills were put to the fore, nowadays, the flexibility and the effectiveness of a leader are appreciated the most. This shift was needed since companies were moving from a traditional managerial approach based on orders and control to the contemporary time-induced leadership style, which implies even distribution of responsibility among the members of a team and appraisal of their performance. There could be more visionaries in a team, and they all contribute to the achievement of the common goal. Nevertheless, the participative and situational approaches are applied to more flexible business environments, such as IT, design, and freelance businesses. Traditional organizations tend to follow transactional theories, which implement the command and control approach (Vecchio, Justin, & Pearce, 2008).

The analysis of the management and leadership theories reveals their strengths and weaknesses. Thus, the Great Man and trait theories are similar in their rigidity and limitation, which have an impact on the effectiveness of leadership. However, personality characteristics cannot determine the outcome of the leadership style since the leadership skills have to be applied in the appropriate environment. At the same time, the global or historical view allows for the Great Man leadership even nowadays.

Classical Management Theories

Classical management theories focus on the output of business efforts and hierarchy and bureaucracy are their major paradigms. These theories are more suitable for conservative businesses, such as manufacturing, with a more traditional approach to managing organizations. Transactional leadership is inherent in classical management theories. This leadership style considers followers as subordinates and does not allow them much personal responsibility.

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Human Relations Management Theories

Human relations are pivotal for the effectiveness of contemporary business. Employees frequently look for trust, responsibility, satisfaction and self-realization in their working places (Kark & Van Dijk, 2007). Among this type of theories, laissez-faire leadership is the most controversial since it implies the least involvement of a leader and allows the greatest level of personal responsibility of the subordinates for the outcome of their performance (Chaudhry & Javed, 2012). Providing that the employees can manage their time, effort and the overall performance effectively, this style could be beneficial. Otherwise, regardless of the skills of the leader, the team is unlikely to achieve sufficient results.  

Contingency Theories of Management and Leadership

The introduction of the contingency theory stemmed from the needs of the ever-changing business environment with its only core idea – the goal to be achieved. Regardless of the leadership style, a leader must apply the most appropriate leadership skills to the situation and concentrate on the circumstances and the result. Fiedler (1986) argues that the following three dimensions are important for contingency theories: leader and team member relations, the structure of the task, and the leader’s authority. The leadership approach is likely to be effective if all these three dimensions are developed well. Therefore, the situation will be favorable for the leader and will guarantee the desired outcome.

Global Management and Leadership Theories

Global management and leadership theories can be analyzed from historical and social perspectives. The Great Man theory is still popular. This theory is related to the debate about the leadership qualities being natural or acquired. This discussion is similar to that of the over talent. Some researchers argue that leadership is influenced by many factors such as knowledge, experience, ability to collaborate, and lifelong learning (Amanchukwu, Stanley, & Ololube, 2015; Bass & Bass, 2008). Since people tend to follow true leaders, the latter have to develop and foster extraordinary qualities to meet the demands of the society. The idea of a leader’s superiority stems from the aforementioned Great Man theory.  However, this standpoint is an explanation of  leadership from a historical perspective. Grinin (2010) reconsiders this point of view and emphasizes the role of an inspirational vision of a person who can become a leader under certain circumstances such as social strength and stability.

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In conclusion, according to personality-based theories, the task of a leader is to inspire, motivate, encourage innovation, and kindle passion in his or her followers. Contingency theories emphasize the importance of both traits and circumstances for the successful outcome (Vroom & Jago, 2007). However, the current situation in organizational leadership demonstrates that hardly any style can be considered universally appropriate. Indeed, leaders have to be skilled and flexible to react properly to the changes in business environment. Still, some businesses, such as manufacturing, for instance, require a traditional order and control approach. Consequently, while no management and leadership theory, style and approach can be regarded universal and all-purpose, genuine leaders have to assess the circumstances and apply the most appropriate approach. Therefore, contingency theory seems to be the closest to the modern demands to leadership since it promotes flexibility and adaptability of leaders.