First of all, it is necessary to provide a definition of the term “leadership”. There is an opinion that one of the most appropriate definitions of this term is the following:
In its essence, leadership in an organizational role involves (1) establishing a clear vision, (2) sharing (communicating) that vision with others so that they will follow willingly, (3) providing the information, knowledge, and methods to realize that vision, and (4) coordinating and balancing the conflicting interests of all members or stakeholders (Leadership definition).
In other words, leadership is an ability of a person to unite other people around common goals and values, influence them and lead to realization of some objectives. Leadership unlike management is more informal category. In fact, there are different types of leadership. Among them are the following: transactional, transformational and the so-called “level 5” type of leadership. These styles differ in the methods that are used to motivate the employees and delegate tasks to them.
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People who are characterized with “level 5” leadership rely on their team that helps them to make final decisions. They always claim that success of a company depends on the work of the whole team.
Transactional leadership is characterized by the system of clear instructions, mainly formal relations between the managers and employees, punishment and rewards, based on the work results. This style of leadership is still popular among the managers. However, it does not correspond to the circumstances of the modern business environment.
Transformational leaders try to reform and change relations inside a group. They focus mainly on motivation of the people who follow them. They also try to be a great example for them. Their principles and rules are not only verbal. Everything is proved on practice.
Some people consider terms “management” and “leadership” to be similar. However, there may be significant differences. First of all, management is a formal category versus leadership. Managers are usually appointed by special orders, while leaders are formed due to their charisma and personal charm. Relations between a manager and his employees are regulated by strict formal rules. On the other hand, relations between a leader and other people are more personal.
Managers use their official rights to influence the employees. The personnel is obliged to follow their instructions, otherwise they can be dismissed. Leaders have authority due to their ability to unite people and lead them towards a common goal. Employees follow their leaders willingly.
Even a simple worker can be a leader, while the power of a manager is defined by the formal rules. A manager must be appointed officially. Finally, leadership is more stable and long-term position. The further work of a manager does not usually depend on his/her competence but also on the decisions of the shareholders, etc.
To conclude, it is necessary to say the following. Leadership can be considered as an ability of a person to unite other people and lead them towards the common goal. Leadership and management are concurrent terms. However, there are a lot of differences between them. Leadership is more informal category. Generally, a good leader will be always a good manager, while a good manager is not always a leader. It is very rare that a manager of a company is also a leader.