Business Management and Leadership Styles: A Report

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Introduction to business

Contents
Introduction 2
Functional area and hierarchy of management 2
Communication in leadership and management 4
Drivers of the globalisation and their impact on the business 5
Comparison of styles of leadership or management 8
Conclusion 10
References 11
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Introduction
Leadership or management is an important part of every organisation and there are many
approaches used for leadership and management in a global context of the business the third-way
group is a medium-sized organisation of London UK with which provide services of designing
and building, architecture and development of the real state (Thirdway, 2019). This report will
analyse the functional area of management and its hierarchy with the example of the third group
organisation. This report will also include the importance of communication in leadership and
management and current drivers of globalisation with their impact on the business. Further, the
discussion will be done on different management and leadership styles for a global organisation
in this report.
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Functional area and hierarchy of management
A company organizes its employees into a different functional area to operate business functions
by focusing on the common objectives of the organisation. The functional areas of the third way
group are as follows:
Human resource
It is essential for an organisation to manage its people effectively. the human resources
department of the Third-Way Group takes responsibility of hiring and recruiting qualified people
for the jobs and also determines their salary structure and this department is also involved in the
training and development of the employees.
Finance and accounting
This functional unit of the Third-Way Group is responsible for producing the company's
financial statement and also does work of accounting, planning and organizing finance of the
company. The finance department manages the cash flow of the third-way group company
Research and development
Innovation is the key to success for every organisation. The R&D department of the Third-Way
Group focuses on the innovation in the products and services and develops a new design, style
and system for the products. It also updates the products according to the new technology and
economical tends
Marketing
Marketing is the main function of an organisation. the marketing department of the Third-Way
Group uses different promotional activities and advertising for the products and services among
the market audience. An effective marketing strategy will help in driving success and
profitability for the business. this department takes responsibility for generating sales for the
company and also monitors competitor’s activity
Production
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The production department is concerned with the manufacturing of the products and ensures the
adequate supply of the products in the market. production department of the Third-Way Group
company ensures that raw materials are converted into finished products effectively and in good
quality. The inventory management is done by this department.
Hierarchy of management
The hierarchy of management helps in reaching the business goals effectively because it divides
the functions among the workforce at a different level. To ensure the success of an organisation
there must be good coordination between all levels of the management (Diefenbach, 2013)
Figure 1: Hierarchy of management of Third Way Group
Source: (Diefenbach, 2013)
Top management
The top management of Third-Way Group Company guide and control over all functions of the
management is also called as the executive level. It includes various positions like
Chairmen- he is at the highest rank in the company and acts as a representative of the company
Vice-president- they are accountable for organizing meetings of the board of directors
Chief executive officer- he reports to the board of the directors regarding various functions of
the business
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Board of directors- they are a group of stakeholders who are responsible for decision making
Middle management
The middle management of the Third-Way Group Company coordinates with the top
management and line management to ensure the successful functioning of the organisation it
includes various positions like
General Manager- he takes responsibility for various functions client relation, operation
management, sales and marketing
Regional manager- he manages the business of a particular region
First line management
The line managers of the Third-Way Group Company focus on the day to day activity of the
organisation and are responsible for reporting to the middle management
Supervisor- they act as a communicator between middle management and first line employees
Office manager- he coordinates to the employees in different operational activities
Team leader – team leaders take the responsibility of leading the team towards the achievement
of the business goals
Communication in leadership and management
Communication is a two-way process where two people exchange information with each other in
order to gain some knowledge. Communication plays a vital role in leadership and management.
Effective communication skills help a leader and manager to communicate with the employees
because words are considered as a powerful weapon to influence others (Shockley, 2014). the
leaders and managers are required to share ideas, information with clarity among their
employees. it is essential for the leaders and managers to be skilled communicators which would
help them to handle the flow of information within the organisation (Antonakis and House,
2014). The greatest leaders motivate the employees and inspire them to achieve business goals
and for this purpose, they need to be able to communicate effectively. The managers are also
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responsible for managing the performance of the employee and organisation so they must be able
to communicate effectively with the employees
To establish good relationships with them, suppliers, employees, clients, investors and customers
it is necessary for the leaders and managers of the third group company to communicate with
them effectively. it helps in making a harmonious relationship with them (De Vries et.al, 2010).
Effective interdepartmental communication
Interdepartmental communication relates to communication between various departments. An
organisation can perform its function effectively if the different functional unit is able to
establish good communication with each other. This helps in keep moving the information
throughout different departments that encourage them to do their best (Gondal and Shahbaz,
2012). For example, the marketing department of the third group company communicates with
the HR department to hire and recruit new candidates to operate marketing functions. The HR
department coordinates and communicates with the finance department regarding the budget of
the new recruitment process. The marketing department also communicates with the production
department to ensure the timely delivery of the products in the market. Effective communication
results in good cooperation and coordination between different departmental units of the third
group company (Shuaib and Tiwana, 2014).
Hence use of effective communication by the leaders and manager in the third group company
will help in achieving the business goals more effectively and it also helps in making good
relation with other functional units of the organisation (Goetsch and Davis, 2014).
Drivers of the globalisation and their impact on the business
Globalisation is the process done by an organisation by expanding its business at a global level.
There are some drivers of globalisation which encourages to modern globalisation presented as
below:
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Figure 2 globalisation drivers
Source: (Liu, et.al, 2011)
Technological drivers
Advancement in technology drives globalisation by providing a facility of transportation now it
becomes easy to move goods and people across the border. Innovation in information and
communication technology enabled highly effective computing at a low cost and the rapid
growth of internet technology created e-business through a digital platform. The use of new
technology helps the Third-Way Group company to perform its function with more speed and
accuracy. They have enabled a business to perform its functions at the global level and results in
the success of the third group company (Liu, et.al, 2011)
Government drivers
New rules and regulations, as well as policies of the government, are resulting in lowering the
tariffs and allowed foreign direct investment across the world. The example of latest
development privatization in eastern Europe as well as world trade organisation 1995 which are
promoting the global business and providing an opportunity for the third group organisation to
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operate its function at the global level (Fijnaut, 2012). The government favourable trade policies
and compatible technical standards drive a business towards the globalisation and encourage
international trade. The government of the UK created many policies and procedure to operate
the business of the third group at the global level (Villaverde and Maza, 2011).
Market drivers
The domestic market limits the opportunity for expanding and growing the business. Through
global expanding of business, a company can overcome this issue. The need for common
customers, global customers and the use of global channels are encouraging to the third group
company to globalize its business. The third group company want to lead its country as well as
using transferable marketing that increases the globalisation of the business.
Cost drivers
Higher product development cost and sourcing efficiency drive a company to operate its
functions at the global level. A company can take the cost benefit from the globalization. Apart
from this favourable logistics, cost of different country and global scale economies driving a
business towards the globalisation. The third group company can take advantages of the cost of
different countries (Villaverde and Maza, 2011).
Competitive drivers
With the use of globalisation, many firms are directing its business towards globalisation and
that is increasing the competition. Today organisations are forced to be international through
operating their activity globally. The High export and import of the goods and strong
independence of countries are resulting in the globalisation. These drivers help the third group
company to take competitive advantages as well as they can achieve high market share.
Hence, the globalisation is increasing very fast in all over the world due to availability of some
factors which drives a business towards the globalisation. These factors have a great impact on
the business. They create an opportunity for a business to operate its functions globally and
increases profit for the company. These factors establish a good relationship with other countries.
A company can achieve rapid growth and expansion through operating the business on a global
scale.
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Comparison of styles of leadership or management
Leadership styles
It includes the way and manner as well the approach of providing direction, motivation,
inspiration to the people. The leadership style enables leaders to perform their job roles
effectively. There are many styles used by the third group company to operate their job roles.
The styles of leadership or management are defined as follows
Transactional leadership style
The transactional style of leadership was described by the max weber in 1947 and after that by
Bernard bass in 1981. This leadership styles are used by the transactional leaders who focus on
promoting the business goals and ensures that if the predetermined goals are met with the
performance of the employees. in this type of leadership negative consequences are given to
those employees who don’t manage to meet performance standards. The leaders use reward and
punishment system in the transactional leadership style. They are able to keep motivate an
employee for a short term through rewarding his performance but they also give punishment to
lower performers (Lai, 2011)
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Figure 3 Transactional leadership
Source: (Lai, 2011)
For example – a leader of the third company group evaluated the performance of his team and
recognized that one of his team member performances didn't meet with the desired standards. He
will give feedback to the team member and will put him on a growth plan.
Participative or democratic leaders
This leadership style is defined by Kurt Lewin in 1939.It is a kind of managerial style used by
the leaders that encourage the involvement of the employees on the important decision making.
The information regarding a problem will be distributed among the employees to get a review of
them and the majority of the vote will decide what action should be taken by the company
(Arnold and Loughlin, 2013).
This leadership style will be more suitable for the leaders of the third group company because In
this type of leadership the leaders are deeply involved with the employees they organize meeting
with the employees to understand the requirement of task or project and then encourage the
employee to determine the best course of action. Everyone in the organisation believes that the
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decision will enhance the productivity of the organisation and also increase the cohesiveness
through active participation of the employees in decision making of management that will result
in modern globalisation (Huang, et.al, 2010).
Figure 3 Participative leadership
Source: (Huang, et.al, 2010)
For example – the third group company want to change the work process and the leader of the
company will ask the employees about what changes are to be made in the organisation for its
efficient working and majority of the decision will be used by the company.
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