Effective Business Direction: Leadership, Management, and Strategies

Density Characteristics of Direction

Direction is a dynamic, ongoing process requiring multiple resources, both human and material, to meet objectives. In changing competitive environments, especially in the context of globalization, leadership must ensure the company's vision and strategic objectives are met.

Mission

The identity and personality, which is the essence of the business.

Vision

The objectives of the company for the future (the future we want for it).

Leadership Role (Allen Reported)

• Plan: Forecasting, setting objectives and strategies, identifying resources.
• Organize: Preparing resources, defining roles and responsibilities, distributing tasks, determining procedures.
• Lead and Execute: Carrying out plans, motivating people, making decisions, resolving conflicts.
• Evaluate: Checking objective attainment, making corrections, analyzing results.

Behavior Management

Douglas McGregor proposed two theories based on employee types:

• Theory X: Employees are inherently lazy, work only for money, avoid responsibility, and need constant supervision.
• Theory Y: Employees are naturally motivated, plan and execute independently, and are responsible and reliable.

Levels of Management

In large companies, there are three levels:

• Senior Management: President and key executives, responsible for long-term planning and major decisions.
• Middle Management: Implement plans from senior management.
• Operational Management: Distribute tasks and assess objective achievement.

Leadership Styles

Leadership is the ability to influence people. There are three main styles:

• Autocratic: (Theory X) Leader makes decisions with minimal consultation.
• Democratic: (Theory Y) Leader consults with group members but makes final decisions.
• Laissez-faire: (Ouchi Theory) Leader monitors and provides minimal direction.

Leadership can also be categorized by authority (formal vs. informal) or power (coercive, legitimate, referent, expert, or reward).

Theories on Leadership

Two main theories exist:

• Personality Traits: Effective leadership is based on the leader's personal characteristics (communication skills, empathy, etc.).
• Situational Leadership: Leadership style depends on the task and the employee's psychological maturity and attitude. There are four categories:
  • M1: Employee is unwilling or unable.
  • M2: Employee is willing but unsure.
  • M3: Employee is able but unwilling.
  • M4: Employee is both willing and able.

Management styles and employee maturity levels determine the appropriate leadership approach (direct, persuade, participate, delegate).