Effective Leadership and Management Principles

The Leadership Role and Management Functions

Creativity, teamwork, and communication skills are essential qualities that every entrepreneur should possess. The management function is conceived as an ongoing and dynamic process. This involves managing multiple resources, both human and material, to achieve goal-oriented objectives or specific targets. Within the current framework of a company, its functions are to define the mission, vision, and strategic objectives of the organization.

Henry Fayol was the first author to systematize the contents of the management function. According to Allen, management functions include:

• Planning: Forecasting, setting objectives, and defining strategies.
• Organizing: Preparing resources and allocating functions.
• Commanding and Leading: Motivating people, making decisions, and resolving conflicts.
• Assessing: Analyzing results and verifying that objectives have been met.

Managerial Behavior: Theory X and Theory Y

The American sociologist Douglas McGregor (1906-1964) described two forms of managerial thought, which he called Theory X and Theory Y. According to McGregor, employees are classified into two groups:

• Theory X: These employees are viewed as unreliable. The employee is perceived as lazy by nature, works only for money, lacks ambition, and is dependent.
• Theory Y: These employees are viewed as legitimate and reliable. They enjoy working, mark their own goals, and are creative, independent, and naturally motivated.

Defined Leadership Styles

Leadership is defined as the ability to exercise influence over others. There are three primary types of leadership:

• Autocratic: Based on Theory X, where the leader makes unilateral decisions without consulting subordinates.
• Democratic: Based on Theory Y, where the leader involves subordinates significantly when making decisions.
• Laissez-Faire: (To leave) Corresponds to Theory Z, where decisions are left to the working group, of which the leader is also a part.

Concepts of Authority and Power

Authority is the right to rule that a person acquires. In the process of delegation, a superior assigns authority and responsibility to another person to execute certain tasks. There are two types of authority:

• Formal: Granted by the position, job title, or the company itself.
• Informal: Granted by the group and related to personal qualities.

Power is often based on the position and the method of exercising authority to influence others to meet objectives. The types of power include:

• Coercive: Based on fear.
• Legitimate: Based on hierarchy.
• Referent: Based on being an example.
• Expert: Based on capacity and knowledge.