The Importance of Leadership and Management in Business Development


Leadership and management are the concepts frequently employed in an interchangeable manner in any organization. On the other hand, Leadership and management really give a description of two distinctly separate concepts. Nevertheless, in this paper, the difference between leadership and management will be discussed and the reason for their having the same or some of the same characteristics.

Literature review of Management and Leadership

In the present day commercial or industrial enterprises and the people who constitute it, “management” is frequently regarded as the concept and approach carried out intended for the efficiency and success of an organization. Moreover, for any business to spring up and be financially secure and functioning well the essential ability needed in management and leadership has to be perfectly understood.

However, if these fundamental skills are properly approached with competent technique, the organization would be able to control and manage its workforce in crisis situations where the business has to grow at all cost. Furthermore, the fundamental skills needed in the management and leadership of an organization are: (1) Finding solution to problems and reaching a decision; (2) formulating a program for a definite course of action; (3) formally arranged gathering with management; (4) Authorizing subordinates to make certain decisions; (5) communication; and (6) self control.

Nevertheless, these skills are also the basis from which to build up more improved customary way of operation or behaviour in the management and leadership of an organization. Despite the intense concern in the development of managers and leaders and lots of research over recent decades, the subject remains ready for analysis with displeasing questions still not brought to a conclusion.

However, management development plans are often used as a device to lessen discriminatory attitudes and diversity in organizations; yet it is not strange to find such development truly exacerbating disparity in the workplace.

All this begins to propose that at least some of the significance close to management and leadership development may lie somewhere else than in its performance impact or personal utility. Perhaps, for instance, the influence of such activities are more to do with the way of allocating precious resources, the way corporate messages are being disseminated, the orientation that characterizes the thinking of a group or nation and ethical stances are receiving reinforcement or being undermined, and the way management identities are being forged.

Leadership is an aspect of management

Leadership is included in the useful or valuable qualities that a manager must acquire as an attribute, knowledge, or skill. However, proper analysis must be taken in distinguishing the concept of leadership and management.

The most important goal of a manager is to make the most of the output of an establishment through managerial approach. Though, to accomplish this, managers in all organizations must take on the functions stated below:

  • organisation
  • setting up
  • recruitment
  • conducting or leading
  • Influence (others or oneself) skilfully, usually to one’s advantage

With these functions leadership can be analyzed as part of the essential constituents of leading the successful performance of an organization. Furthermore, a manager is required to have conventional authority for the effectiveness and success of leading an organization. For any new program or strategy of dealing with problems to assume control, leading management of an organization must be connected and behave as someone worthy of imitation. This involvement cannot be transferred to someone else. (Daniel 1994).

In some condition that accompanies or influences event or activity of an organization, leadership is not necessary. As an example, self driven groups do not necessarily need a leader, but may discover that leaders are in control. Accordingly, the statement that a leader is not constantly needed shows that leadership is only a useful or valuable human communicative and interaction quality and is not of the greatest importance.

Differences in perceptions

Managers think gradually by regular degrees or additions, at the same time that leaders think in a radical manner. According to Richard Pascale, in his book ‘Managing on the Edge’ “things are done right by the Managers, whereas right things are done by leaders.” (Richard,1990, p.65). This means that company policy and written principles are followed by managers, whereas leaders adopt their personal instinctive knowing (without the use of rational processes), which may consecutively be beneficial for the success and growth of an organization. Additionally, leaders are more determined or actuated by emotion than managers. The forces of workers available are managed by their feelings rather than their ability to comprehend; to understand and profit from experience (John, 1990, p.113). This excerpt exemplifies the working team’s reason for preferring leaders.

Leaders are distinguished by their diverse characteristics. They doubt statement that is assumed to be true from which a conclusion can be drawn and are openly distrustful and unwilling to confide to specific practice of long standing. They look out for conformity to reality or actuality and come up with conclusions grounded on truth, and not prejudice (John, 1990, p.113).

Subordinate position as a Leader

Frequently, in groups that have an average number of members in an organization, it does not happen that the manager becomes the leader, rather, it is lower ranked members with particular talent and skills on human resource management that leads the group towards achieving their goals and success of the organization.

Daniel. F. Predpall, noted that Leaders must implement the most basic principles of managing and interacting with the human resource of an organisation. The principles as stated by Daniel are: strategies, values, vision, and aim (Daniel, 1994). Nevertheless it is worthy of note that, in such a case that the lower ranked member becomes the leader of an organization where there is a manager, an open clash may begin due to different way of regarding situations.


An organizations Labour groups are more loyal to their leader than the managers, consequently, such loyalty is established by the leader who accepts blame in crisis, assign great social importance to group achievement, and appreciating the workforce.

John Fenton (1990) described leaders as an individual who must understand and bring out the success in a cooperative unit, by means of visual representation of the relations between certain quantities plotted with reference to a set of axes, with exciting ideas (John, 1990, p.114).

He further noted that leaders are perceptive and conscious people who are familiar with their team and increase common self-confidence within them (John, 1990, p.113).

The Difference between Leaders and Managers

A leader is an individual who naturally directs a team, through the teams selection, whereas the team must be obedient to managers. As regards to this, due to manager’s long service and loyalty, he was able to attain such height or level, but not because of his essential and distinguishing attribute of leadership. Interestingly, a leader may not possess the basic skills of human management, but his vision creates a mutual cooperation between his lower ranked employees.

Management Roles

Management in most cases comprises of skilled people in their field, who understands the methodological knowledge of leadership in the management of an organization.

In summary, the difference between leadership and management is:

  • Leadership is establishing fresh management and vision for an organizations team while a leader is the person who heads the vision or management in order to attain success.
  • Management determines or leads people/resources in an organizations labour group in accordant with the laid down principles or values.

The difference between leadership and management can be clarified by careful analysis of their interchangeable relationship.

Researchers discovered that leadership without management sets a systematic practical approach for the workforce, without considering the procedures of attaining such approach. On the other hand, management without leadership determines resources to continue the existing state of affairs thereby, ensuring that the organizations operation is in accordance to the previous plans.

The mutual combination of leadership and management sets new helpful suggestions regarding a decision or future course of action and effectively handles the resources to realize it.


In conclusion, in few cases leaders operates as figure heads without any directional innovation, in principle this is not leadership, but the individual who acts in such manner would be regarded as a leader.

Furthermore, the field of management and leadership are two different ways of organising the human resource and management of an organisation. However, the manager uses an established form and rotational system of approach while leader’s use strong feeling or emotion arousing the efficiency of the organization’s team.

Leadership is about initiating new direction or helpful suggestions regarding decisions or future course of action for group of individuals in an organization; while management is about showing the managerial way by conducting or leading and the ability to control or determine policy according to traditional principles. However, any individual in an organisation can be classified as a figurative leader if they appear as the leader of a group who makes decisions on their own.

Additionally, the procedure undertaken in establishing culture is the fundamental nature of leadership. Nevertheless, leadership and culture are two sides of the same coins. In difference between leadership and management is that leaders create and change cultures, whereas managers and administrators live within them.

Finally, any leader who is interested into making an organization great needs to broaden their interpretation and positive reception of how present organization life has failed to advance in correspondence with the improved understanding of how and effective organization can be managed.

Consequently, no matter how good their goals are, many leaders still keep on controlling the organizations by means of obsolete paradigms. Executives would have the benefit of careful prior consideration to reflect on and elucidate, their own personal philosophy concerning organizational leadership and to describe what they want.


Daniel, F. P, (1994). ‘Developing Quality Improvement Processes In Consulting Engineering Firms’, Journal of Management in Engineering, pp 30-31.

John, F. (1990). ‘101 Ways to Boost Your Business Performance’. London: Mandarin Business.

Richard, P, (1990). ‘Managing on the Edge’. New York, NY: Penguin Book.

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