Ramaiah Institute of Business Studies

Chapter 2
Leadership from Managerial Perspective

Learning objectives
This chapter helps you to understand the concepts like
 The concept of leadership from  Leadership versus manager
management perspective  Authority versus leader
 Nature of leadership  Formal versus informal
 Significance of leadership  Roles of leader
 Qualities of leadership  Levels of leadership
 Personal values in leadership  Understand leader
 Ethical values in leadership

2.1 Nature of leadership

1. Leadership derives from the power and is similar to, yet distinct from, management.
In fact, “leadership” and “management” are different. There can be leaders of completely
unorganized groups, but there can be managers only of organized groups. Thus it can be
said that a manager is necessarily a leader but a leader may not be a manager.
2. Leadership is essential for managing.
The ability to lead effectively is one of the keys to being an effective manager because
she/he has to combine resources and lead a group to achieve objectives.
3. Leadership and motivation are closely interconnected.
By understanding motivation, one can appreciate better what people want and why they
act as they do. A leader can encourage or dampen workers’ motivation by creating a
favorable or unfavorable working environment in the organization.
4. The essence of leadership is followership.
In other words, it is the willingness of people to follow a person that makes that person a
leader. Moreover, people tend to follow those whom they see as providing a means of
achieving their desires, needs and wants.
5. Leadership involves an unequal distribution of power between leaders and group
members.
Group members are not powerless; they can shape group activities in some ways. Still, the
leader will usually have more power than the group members.

6. Leaders can influence the followers’ behavior in some ways.

Leaders can influence workers either to do ill or well for the company. The leader must be
able to empower and motivate the followers to the cause.
7. The leader must co-exist with the subordinates or followers and must have a clear
idea about their demands and ambitions.
This creates loyalty and trust in subordinates for their leader.

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8. Leadership is to be concerned about values.

Followers learn ethics and values from their leaders. Leaders are the real teachers of
ethics, and they can reinforce ideas. Leaders need to make positive statements of ethics if
they are not hypocritical.
9. Leading is a very demanding job both physically and psychologically.
The leader must have the strength, power, and ability to meet the bodily requirements;
zeal, energy, and patience to meet the mental requirements for leading.

2.2 Importance of Leadership

Leadership is an important function of management which helps to maximize efficiency and
to achieve organizational goals.
1. Initiates action- Leader is a person who starts the work by communicating the policies and
plans to the subordinates from where the work actually starts.
2. Motivation- A leader proves to be playing an incentive role in the concern’s working. He
motivates the employees with economic and non-economic rewards and thereby gets the
work from the subordinates.
3. Providing guidance- A leader has to not only supervise but also play a guiding role for the
subordinates. Guidance here means instructing the subordinates the way they have to
perform their work effectively and efficiently.
4. Creating confidence- Confidence is an important factor which can be achieved through
expressing the work efforts to the subordinates, explaining them clearly their role and
giving them guidelines to achieve the goals effectively. It is also important to hear the
employees with regards to their complaints and problems.
5. Building morale- Morale denotes willing co-operation of the employees towards their
work and getting them into confidence and winning their trust. A leader can be a morale
booster by achieving full co-operation so that they perform with best of their abilities as
they work to achieve goals.
6. Builds work environment- Management is getting things done from people. An efficient
work environment helps in sound and stable growth. Therefore, human relations should be
kept into mind by a leader. He should have personal contacts with employees and should
listen to their problems and solve them. He should treat employees on humanitarian terms.
7. Co-ordination- Co-ordination can be achieved through reconciling personal interests with
organizational goals. This synchronization can be achieved through proper and effective
co-ordination which should be primary motive of a leader.

2.3 Qualities of an Effective Leader:

1. Visionary:
Effective leaders have a clear vision of what they want to achieve and communicate it
effectively to their team.
2. Strategic thinking:

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They are able to think ahead and plan for the future. They can anticipate potential
problems and opportunities, and adjust their plans accordingly.
3. Decisiveness:
They make timely and well-informed decisions, even when faced with uncertainty or
difficult choices.
4. Strong communication:
Effective leaders communicate clearly and consistently with their team, listen to their
feedback, and provide constructive feedback.
5. Empathy:
They understand and relate to the needs and concerns of their team members, and strive to
create a supportive and inclusive environment.
6. Accountability:
They take responsibility for their actions and decisions, and hold themselves and their
team members accountable for achieving their goals.
7. Adaptability:
Effective leaders are flexible and adaptable, able to pivot quickly in response to changing
circumstances.
8. Confidence:
They have a strong sense of self-assurance and belief in their abilities, which inspires
confidence in their team.
9. Passion:
Effective leaders are passionate about what they do, and their enthusiasm is contagious.
10. Lead by example:
They model the behavior they expect from their team members and set high standards for
themselves and others.

2.4 Personal values of leadership

Leadership values are the principles and beliefs that guide the behavior and decisions of a
leader. Here are some of the most important leadership values:
1. Integrity: Leaders who value integrity demonstrate honesty, transparency, and ethical
behavior in their interactions with others. They are consistent in their words and actions,
and they hold themselves to a high standard of accountability.
2. Respect: Leaders who value respect treat others with dignity, regardless of their position
or background. They listen actively and seek to understand the perspectives of others.
3. Empathy: Leaders who value empathy are able to understand and relate to the emotions
and experiences of others. They seek to create a supportive and inclusive environment that
fosters teamwork and collaboration.
4. Courage: Leaders who value courage are willing to take risks and make difficult
decisions, even in the face of uncertainty or adversity. They are resilient in the face of
setbacks, and they inspire confidence in their team.
5. Responsibility: Leaders who value responsibility take ownership of their actions and
decisions, and they hold themselves accountable for achieving their goals. They also

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encourage their team members to take responsibility for their work and their contributions
to the team.
6. Collaboration: Leaders who value collaboration recognize the importance of teamwork
and actively seek out opportunities for cooperation and partnership. They promote a
culture of mutual respect and trust, where team members feel comfortable sharing their
ideas and perspectives.
7. Innovation: Leaders who value innovation are open to new ideas and perspectives, and
they encourage creativity and experimentation. They are willing to challenge the status
quo and embrace new technologies and processes that can improve their team's
performance.

2.5 Ethical Behavior in Leadership

Ethical behavior is a fundamental aspect of effective leadership. Leaders who act with
integrity and uphold ethical standards inspire trust and respect among their team members,
stakeholders, and the wider community. Here are some key principles of ethical behavior in
leadership:
1. Transparency: Leaders who act ethically are transparent in their communications and
decision-making. They provide clear and honest information about their intentions,
actions, and outcomes.
2. Fairness: Ethical leaders treat others with fairness and impartiality, regardless of their
position or background. They do not engage in favoritism or discrimination and strive to
create a level playing field for all.
3. Responsibility: Ethical leaders take responsibility for their actions and decisions. They do
not shift blame onto others, and they are accountable for the consequences of their
choices.
4. Respect: Ethical leaders show respect for the dignity and autonomy of others. They listen
actively to others, value their contributions, and treat them with courtesy and empathy.
5. Trustworthiness: Ethical leaders demonstrate trustworthiness through their consistent and
reliable behavior. They keep their promises and commitments, and they do not engage in
deceptive or manipulative practices.
6. Ethical decision-making: Ethical leaders make decisions based on ethical principles,
such as justice, equality, and human rights. They consider the impact of their decisions on
all stakeholders and weigh the potential risks and benefits.
7. Compliance with laws and regulations: Ethical leaders comply with all applicable laws
and regulations and uphold ethical standards in their industry or profession.

2.6 Leader versus Manager

“Leadership and managership are two synonymous terms” is an incorrect statement.
Leadership doesn’t require any managerial position to act as a leader.

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On the other hand, a manager can be a true manager only if he has got the traits of leader in
him.
A manager has to perform all five functions to achieve goals, i.e., Planning, Organizing,
Staffing, Directing, and Controlling. Leadership is a part of these functions.
“All managers are leaders, but all leaders are not managers.”
Leaders and Managers can be compared on the following basis:
Basis Manager Leader
Origin A person becomes a manager A person becomes a leader on basis
by virtue of his position. of his personal qualities.
Formal Manager has got formal rights Rights are not available to a leader.
Rights in an organization because of
his status.
Followers The subordinates are the The group of employees whom the
followers of managers. leaders leads are his followers.
Functions A manager performs all five Leader influences people to work
functions of management. willingly for group objectives.
Necessity A manager is very essential to A leader is required to create
a concern. cordial relation between person
working in and for organization.
Stability It is more stable. Leadership is temporary.
Mutual All managers are leaders. All leaders are not managers.
Relationshi
p
Accountabi Manager is accountable for Leaders have no well-defined
lity self and subordinates behavior accountability.
and performance.
Concern A manager’s concern is A leader’s concern is group goals
organizational goals. and member’s satisfaction.
Followers People follow manager by People follow them on voluntary
virtue of job description. basis.
Role A manager can continue in A leader can maintain his position
continuatio office till he performs his only through day to day wishes of
n duties satisfactorily in followers.
congruence with
organizational goals.
Sanctions Manager has command over A leader has command over
allocation and distribution of different sanctions and related task
sanctions. records. These sanctions are
essentially of informal nature.

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2.7 Authority vs Leadership

Authority Leadership
The authority exercised is a kind of leadership rely on the informal authority
legitimate power and people follow figures that they exercise on people to influence
exercising it, because their positions them
demand
Authority are trusted for their power and Leaders are trusted for their judgment and
respected for their position respected for their expertise
Authority rarely provides a scope for leaders provide a scope for feedback
feedback
Authority can hardly make people change leadership displays greater effectiveness in
their attitudes and behaviors with lasting addressing attitudes and behaviors of
effects and results people.
Exercising authority sometimes limits the leadership encourages people to look
approaches to arrive at solutions for issues beyond the obvious and think innovatively
and problems and sometimes emerge with radical
solutions

2.8 Formal vs Informal Leadership

Formal leadership is based on a person's formal position or authority within a group or
organization. For example, a manager, supervisor, or team leader may be given formal
authority to make decisions and give orders to their team. They have a designated role and
responsibilities within the organization, and their leadership is expected and recognized by
others.
On the other hand, informal leadership is based on a person's personal qualities, such as their
charisma, expertise, or influence within a group or organization. Informal leaders may not
have a formal position of authority, but they are able to influence others through their personal
relationships and social networks. They may be seen as a role model or mentor by others, and
their leadership is based on their ability to inspire and motivate others towards a common
goal.

2.9 Role of a Leader

1. Required at all levels-
Leadership is a function which is important at all levels of management. In the top level, it
is important for getting co-operation in formulation of plans and policies. In the middle
and lower level, it is required for interpretation and execution of plans and programmes
framed by the top management. Leadership can be exercised through guidance and
counseling of the subordinates at the time of execution of plans.
2. Representative of the organization-

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A leader, i.e., a manager is said to be the representative of the enterprise. He has to

represent the concern at seminars, conferences, general meetings, etc. His role is to
communicate the rationale of the enterprise to outside public. He is also representative of
the own department which he leads.
3. Integrates and reconciles the personal goals with organizational goals-
A leader through leadership traits helps in reconciling/ integrating the personal goals of
the employees with the organizational goals. He is trying to co-ordinate the efforts of
people towards a common purpose and thereby achieves objectives. This can be done only
if he can influence and get willing co-operation and urge to accomplish the objectives.
4. He solicits support-
A leader is a manager and besides that he is a person who entertains and invites support
and co-operation of subordinates. This he can do by his personality, intelligence, maturity
and experience which can provide him positive result. In this regard, a leader has to invite
suggestions and if possible, implement them into plans and programmes of enterprise.
This way, he can solicit full support of employees which results in willingness to work
and thereby effectiveness in running of a concern.
5. As a friend, philosopher and guide-
A leader must possess the three-dimensional traits in him. He can be a friend by sharing
the feelings, opinions and desires with the employees. He can be a philosopher by utilizing
his intelligence and experience and thereby guiding the employees as and when time
requires. He can be a guide by supervising and communicating the employees the plans
and policies of top management and secure their co-operation to achieve the goals of a
concern. At times he can also play the role of a counselor by counseling and a problem-
solving approach. He can listen to the problems of the employees and try to solve them.

2.10 levels of leadership

1. Self-leadership:
The ability to lead oneself is the foundation of leadership. Self-leadership involves having
a clear sense of one's values, vision, and goals, as well as the ability to motivate oneself
and take initiative.
2. Team leadership:
This level of leadership involves leading a small group of people towards a shared goal.
Team leaders need to be able to communicate effectively, build trust and rapport with
team members, and provide direction and guidance.
3. Functional leadership:
This level of leadership involves leading a team or department within an organization
towards achieving specific objectives. Functional leaders need to have a deep
understanding of their area of expertise, as well as the ability to manage resources,
develop strategies, and solve problems.
4. Strategic leadership:

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This level of leadership involves setting the overall direction and vision for an
organization or group. Strategic leaders need to be able to think creatively and
analytically, communicate effectively with stakeholders, and make sound decisions that
align with the organization's mission and values.

5. Visionary leadership:
This level of leadership involves inspiring and motivating people towards a compelling
and ambitious vision. Visionary leaders need to be able to communicate a clear and
inspiring vision, build support and enthusiasm among stakeholders, and navigate
challenges and obstacles along the way.

2.11 Levels of Leadership by John C. Maxwell

John C. Maxwell is a well-known leadership expert, and he has identified what he calls "The
5 Levels of Leadership." According to Maxwell, these levels represent a progression in a
leader's ability to influence others.
The five levels are:
1. Positional leadership:
This is the lowest level of leadership, where a person's influence is based solely on their
position or title. People follow because they have to, not because they want to.
2. Permission-based leadership:
At this level, a leader begins to develop relationships with their followers and gains their
trust and respect. People follow because they want to, not just because they have to.
3. Production-based leadership:
At this level, a leader has demonstrated their ability to produce results and achieve goals.
People follow because of what the leader has done for the organization.
4. People-based leadership:
At this level, a leader has not only produced results, but has also developed other leaders
around them. People follow because of who the leader is and what they represent.
5. Pinnacle leadership:
This is the highest level of leadership, where a leader's influence is so great that they
become a role model for other leaders. People follow because of the leader's character,
values, and vision.

Leadership Skills
2.12 Communication Skills
Communication skills are critical to the success of any leader. Effective communication
allows leaders to articulate their vision, motivate their team, and make informed
decisions.

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Here are some key communication skills that are important for leaders:
1. Listening: Leaders who are effective communicators know the importance of active
listening. They listen attentively to their team members, ask questions to clarify
information, and respond appropriately.
2. Clarity: Effective communication requires clear and concise messages. Leaders should be
able to communicate their vision, goals, and expectations clearly so that everyone on their
team understands what is expected of them.
3. Empathy: Leaders who can show empathy are more effective at communicating with
their team. They understand their team members' perspectives, emotions, and needs, and
can respond in a way that is respectful and supportive.
4. Nonverbal Communication: Nonverbal communication, such as facial expressions and
body language, can convey a lot of information. Leaders who are aware of their nonverbal
communication can use it to reinforce their message and build rapport with their team.
5. Feedback: Leaders who are effective communicators provide regular feedback to their
team members. They give constructive feedback that is specific, actionable, and
supportive, which helps team members improve their performance.
6. Adaptability: Finally, leaders who are effective communicators are adaptable. They can
adjust their communication style to suit the needs of different team members and
situations. They can also communicate effectively across different channels, such as email,
video conferencing, or face-to-face meetings.

2.13 Decision-Making Skills

Effective decision-making skills are critical for leadership success.
Here are some key decision-making skills that are important for leaders:
1. Analytical Thinking: Leaders need to be able to analyze information to make informed
decisions. They should be able to evaluate the pros and cons of different options, consider
the potential risks and benefits, and identify the best course of action.
2. Strategic Thinking: Leaders need to be able to think strategically about the long-term
goals of the organization. They should be able to align their decisions with the
organization's vision and values, and identify opportunities for growth and improvement.
3. Risk Assessment: Leaders need to be able to assess risks and make decisions that
minimize potential harm to the organization. They should be able to identify potential
risks and develop contingency plans to mitigate them.
4. Decisiveness: Leaders need to be able to make decisions quickly and confidently. They
should be able to weigh the options, gather the necessary information, and make a
decision in a timely manner.
5. Collaboration: Leaders should be able to collaborate with their team members to make
decisions. They should be able to involve others in the decision-making process, gather
input and feedback, and work together to reach a consensus.

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6. Adaptability: Finally, leaders need to be able to adapt to changing circumstances and

make decisions accordingly. They should be able to adjust their decision-making approach
to suit different situations and challenges.

2.14 Emotional management skills

Emotional management skills are critical for leadership success. Leaders who can
manage their own emotions and understand and respond to the emotions of others are
better able to build relationships, motivate their team, and achieve their goals.
Here are some key emotional management skills that are important for leaders:
1. Self-Awareness: Leaders who are self-aware are better able to understand their own
emotions and how they impact their behavior. They can identify their own strengths and
weaknesses, and are more likely to make decisions that are aligned with their values and
goals.
2. Self-Regulation: Leaders who can regulate their own emotions are better able to manage
stress, stay calm under pressure, and make rational decisions. They can identify triggers
that lead to negative emotions and develop strategies to manage them.
3. Empathy: Leaders who can empathize with their team members are better able to build
relationships and create a positive work environment. They can understand the
perspectives, needs, and emotions of others, and respond in a way that is supportive and
respectful.
4. Relationship Management: Leaders who can manage their relationships with their team
members are better able to build trust, resolve conflicts, and motivate their team. They can
communicate effectively, provide feedback, and create a supportive and collaborative
work environment.
5. Emotional Intelligence: Leaders who have high emotional intelligence are better able to
manage their own emotions and understand and respond to the emotions of others. They
can read nonverbal cues, empathize with others, and adjust their communication style to
suit different situations.
6. Positive Attitude: Finally, leaders who have a positive attitude are better able to inspire
and motivate their team. They can create a positive work environment, celebrate
successes, and maintain a can-do attitude even in the face of challenges.

2.15 Public relations skills

Public relations skills are essential for leadership success. Leaders who can effectively
manage the organization's reputation and build positive relationships with stakeholders
are better able to achieve their goals and drive the success of their organization.
Here are some key public relation skills that are important for leaders:

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1. Communication: Leaders need to be able to communicate effectively with a range of

stakeholders, including employees, customers, investors, and the media. They should be
able to articulate the organization's vision, mission, and values, and respond to questions
and concerns in a timely and professional manner.
2. Relationship Building: Leaders should be able to build positive relationships with
stakeholders, including employees, customers, and partners. They should be able to
identify and understand the needs and concerns of different stakeholders, and respond in a
way that is respectful and supportive.
3. Crisis Management: Leaders should be able to manage crises effectively, including
responding to negative publicity, managing reputational risks, and communicating with
stakeholders in a timely and transparent manner.
4. Media Relations: Leaders should be able to manage relationships with the media,
including developing and distributing press releases, responding to media inquiries, and
preparing for media interviews.
5. Brand Management: Leaders should be able to manage the organization's brand
effectively, including developing and implementing brand strategies, monitoring brand
reputation, and responding to brand-related issues.
6. Networking: Finally, leaders should be able to network effectively, including attending
industry events, participating in community activities, and building relationships with key
stakeholders.

2.16 Conflict resolution skills

Conflict resolution skills are essential for leadership success. Leaders who can effectively
manage and resolve conflicts are better able to build positive relationships, maintain a
productive work environment, and achieve their goals.
Here are some key conflict resolution skills that are important for leaders:
1. Active Listening: Leaders need to be able to actively listen to all parties involved in the
conflict. They should be able to understand the perspectives and concerns of each person,
and ensure that everyone has the opportunity to express themselves.
2. Empathy: Leaders should be able to empathize with the parties involved in the conflict.
They should be able to understand the emotions and feelings of each person, and respond
in a way that is respectful and supportive.
3. Problem-Solving: Leaders should be able to identify the root cause of the conflict, and
work collaboratively with the parties involved to develop a solution that meets everyone's
needs. They should be able to brainstorm possible solutions, evaluate the pros and cons of
each option, and identify the best course of action.
4. Communication: Leaders should be able to communicate effectively with the parties
involved in the conflict. They should be able to articulate the issues at hand, and facilitate
a productive dialogue that helps to resolve the conflict.

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5. Mediation: Leaders should be able to act as a mediator between the parties involved in
the conflict. They should be able to remain impartial, help the parties to understand each
other's perspectives, and guide them towards a mutually acceptable solution.
6. Emotional Intelligence: Finally, leaders should have high emotional intelligence, and be
able to manage their own emotions and respond appropriately to the emotions of others.
They should be able to stay calm and composed in the face of conflict, and respond in a
way that is respectful and supportive.

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