Exploring Leadership Styles and Management Theories in Service Sector

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Leadership and Management for Service
Industry
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Contents
INTRODUCTION.........................................................................................................................................3
LO 1...............................................................................................................................................................3
LO 2...............................................................................................................................................................9
LO 3.............................................................................................................................................................12
LO 4.............................................................................................................................................................14
REFERENCES............................................................................................................................................16
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INTRODUCTION
Service industries are those Industries which provides services and intangible products to their customers
for earning revenue which includes food services, transport services and many other business services etc.
Leadership and Management are those skills which are the need of the service industry. Leadership is the
ability of an individual or the organization to lead or guide others on the completion of the same task.
Leadership and management both are the required skills in the industry for the welfare of employees and
the growth of the organization (Algahtani, 2014). Leadership and management are those two tools in the
service industry which are needed the most. As leaders are the individual to whom people follow and
managers are the one for whom the people work for earning. Leadership is such an important part of the
organization that needed the most in the organization as this is such a skill of an individual who has some
vision which he has to achieve. Management, on the other hand, is a process of planning, organizing,
staffing, directing and controlling That too needed in the service industry for the growth of the industry.
LO 1
CLASSICAL MANAGEMENT THEORIES IN SERVICE INDUSTRY
Classical management theories are those which was developed during the industries revolution around
19thcentury. It was developed with a view to improve the productivity and quality of the products, lower
the cost of the product so that the customer gets the maximum satisfaction with the deals. But as the
managers were doing this they find difficulties inside the organization as the employees were not happy
with the kind of working conditions at that point of time because of the necessary lacked training and then
Researchers came up with the classical management theories (Avolio and Yammarino, 2013). There are
three types of classical management theories
SCIENTIFIC MANAGEMENT THEORY
This theory of Management was given by F.W Taylor which says that the analyses of work should be
done at first to increase and improve the productivity and economic efficiency there were some of the
principles which were given by Taylor on scientific management.
 Science is Not Rule of Thumb- According to Taylor, we should not get stuck on the same routine
which we made earlier rather we must be constantly developing the new strategies and build new
techniques which would make the work better, easier and simpler.
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 Harmony, Not Discord- According to Taylor, he said that this situation as a Mental Revolution.
He believed that there has to be an atmosphere created where labour and management should
consider each other necessary for the organization.
 Cooperation- According to Taylor, Managers and Workers should cooperate and jointly work
with each other this would in return increase their involvement and build a good relationship with
each other and create responsibilities also (Goetsch and Davis, 2014).
 Development of each and every person to his/her greatest efficiency- According to Taylor, A
proper arrangement of each and every person training in the organization should be made
properly so that the efficiency would be taken care of from the starting itself.
Bureaucratic Management Theory
This theory of Management was given by two persons one was Henry Fayol and another was Max Weber
They both provided the view that bureaucracy should work according to the rules and regulations of the
organization and maintain the relations too. In a bureaucratic organization, the employees which are
working in the lower level of management that are responsible to obey the instruction and work given to
them by their seniors like subordinate should be liable and responsible to obey rules made by their
superiors and this hierarchy goes on till the President or CEO of the Organization.
Administrative Management Theory
According to Henry Fayol, this theory says that arranging or organizing the things in a systematic manner
which includes like there should be proper hierarchy structure and employees should instruct to their
respective seniors, there should be a division of labour and clearly defined tasks. This theory tells about
the way of doing things in a systematic manner.
Advantages
 Hierarchical structure- This is one of the major advantages of this theory that it has a clear
organizational hierarchy at different levels of management every group of management having
their own responsibilities and duties to complete the targets of the company.
 Division of labour- This advantages helps the employees working in the organization to have
smaller tasks which are easy to complete their responsibilities and duties are defined clearly
which leads to increase the productivity and efficiency in the organization (Hechanova and
Cementina-Olpoc, 2013).
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 Incentive motivation- Employees are motivated by incentives and rewards and for that
organization provides them with the incentive that would maximum satisfaction that make them
responsible to work hard and give better results in productivity to achieve the goals.
 One man's control - This works in most of the ways not only in the service sector but many other
sectors as well that one leader's decision is best as they would be the only one to give instruction
that other employees. the top-level management takes all the decisions of the organization and
communicating it down.
Disadvantages
 In the organization, it becomes an assumption that employees are mostly doing good work and
motivated to do hard work by providing them with monetary incentives. This dismisses the
human personal relations
 A lot of Assumptions in the organization were created by the classical thinkers who made an
approach on the basis of their own mind avoiding scientific management but on judgments which
consider ethics, attitudes towards success.
Role of the Leader and Different Leadership Styles in the Service Industry
A leader is someone who provides its people with a direction to follow, the leader guides the group of
individuals to achieve a common goal. A team leader knows the strengths and weakness of the Team.
There are various responsibilities that a Team leader would have on him such as Developing Strategies
for the organization, providing training to the Team members, communicating with them, Monitoring the
Team to achieve the desired results of the organization.
Leadership Styles are different kinds of styles which is used by an individual on the basis of their
experience for the handling a team, project or completion of the organization tasks leadership styles are
needed to be effective as a manager. Here is the list of Ten Leadership styles that the leaders follow
according to their individual's experience.
Visionary - Those leaders who have the ability to transform a vision into a reality they work for the
development of the organization for inspiring the employees and helpful for growing the business
especially for a small organization (Hersey, et al., 2007).
Coach - Those leaders who have the ability to examine and recognize their team's strengths and
weaknesses. Those leaders who lead the members of the organization to set the smart goals and providing
the result to grow the organization.
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Servant- Those leaders who live in the choices and mindset of the Team members so that they feel
satisfied personally and professionally and the produce great and effective work for the organization.
Autocratic- These leaders are someone who believes in focusing on efficiency and results of the
organization. Leaders in this part believe in taking the decisions alone and with a small and trusted group.
Laissez-faire or hands off- Those leaders believe in delegating tasks and not spending too much time
in managing the employees. They believed that when the employees are highly experienced and well
trained about the work, they should be given the freedom to work according to the best of their
knowledge.
Democratic- These leaders are someone who believes in asking for inputs and getting the feedback from
the team before making any decision. This style of leadership is a combination of laissez-faire and
autocratic.
Pacesetter- This kind of leadership style is more effective which focuses on performance the most so
that there could be better results. They always create an environment in the organization so that
employees get motivation while doing the work for the organization (Lunenburg, 2011).
Transformational- Those Leaders who believe in goal setting having a clear communication to their
employees and giving motivation to them so that the organization commitments can be fulfilled.
Bureaucratic- These leaders expect the members of the team to obey and follow the rules and
regulations made by the organization. This style of leadership focuses on Fixed work or duties assigned to
employees within a hierarchy where each employees having the responsibilities to answer to their
respective seniors.
Transactional - Those leaders whose primary is on the performance of employees these leaders are
great for organization or team tasks. These leaders believe in establishing predetermined incentives for
rewarding to employees on the basis of success and failure of individuals.
Service industry plays a significant role in making the growth of any economy this industry consists of
Retail, banking, tourism and Social Services. The primary focus of this industry is serving the customers
rather than providing them with physical goods. Service sector in the United Kingdom now becomes an
important part of their Economy because 79% of the GDP in 2013 came solely from the service sector
which has increased from the year 1948 with 46%. According to the census data in England and Wales,
the percentage of workers rose from 33% in1841 to 80% in 2011 in the service sector. In the year 2014
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according to statistics 91% of the economy of London came from service sectors its economy in this
industry its economy is more dependent on this industry than any other G7 country. Leadership in the
service industry are the utmost need, As leadership is about influencing, guiding, motivating and
providing support to the employees or workers for successful completion of the goals of the organization.
Leaders in this Industry identified that the success of the service firms lies in developing the environment
of the work. Importance of learning, maintaining relations with customers, cooperation in organization.
The nature of the service industry is competitive which requires time and efforts for successful
completion of the tasks assigned to employees in the organization.
Management and Leadership style in Specific Service Sector Organization
In the modern Business environment, customer satisfaction has become the primary focus on every
organization they focuses more on giving their customers the best deals they can get so that goodwill and
entity of organization maintained with respect to its customers the main purpose of running the business
is earning maximum profit but for that giving satisfaction to its customers is the most. Service Industry
role has gained or increased considerably. Organizations primary focus earlier was on selling the product
which now changes, and their focus shifted on giving better services for the customer's satisfaction.
Leadership and management play a crucial role in the development of any Industry. The organization
needs these qualities in their employees so that they can generate the maximum output to earn a profit.
Leaders in every organization are needed as they have that creativity and innovative thinking skills to do
something better and unique for the organization (Miller and Cable, 2010). Leadership styles provide an
individual to think creatively makes them better at understanding the things done in the organization.
Leadership styles in Service industry have a positive effect on making customers satisfaction, making
business entity and creating goodwill. Leadership styles are those behaviours of an individual that
displays their work with other employees it shows the pattern of interaction of the employees with each
other and with their leaders also. Leadership is all about guiding, controlling and directing their
subordinate. So both are having equal importance in the service industry (Nienaber, 2010).
Relation of organizational structure and culture with service industry On Management and
Leadership
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The organizational structure describes as the actual framework of the organization whereas organizational
culture shows the work ethics, core values and behaviour of any company and their employees in the
organization. Organization structure can be on the basis on their size, purpose and tasks performance.
Leadership and Management plays an important part in this industry also. As they need employees who
can complete organizational tasks and cooperate with each other to create an environment of working in
which they coordinate with each other to complete the assigned work but just like in service sector we do
need the management and leadership styles here also. The organization needs important tools in
employers so that they able to make the work better provide maximum output from the company and need
for leadership skills so that they guide their employees, motivate them to instruct them and maintains a
good vibe in the organization (Mládková, 2012).
Management is the administration of an organization whether a business or not usually business works for
earning the maximum revenue for the business and in service industry managers require the management
process to work in the administration so that the targets of the organization could be accomplished. The
organization provides services for giving their customers satisfaction and providing them with the best
deals. In the service industry both Management and Leadership Styles are important equally important
hence both are needed.
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LO 2
Investigation of Internal and External factors that influences management structure and styles in
the service industry
Internal factors are those factors in which the organization has full control that may be tangible or
intangible these factors helps the organization to figure out strengths and weakness of organization so that
they work accordingly what works for the management, on the other hand, external factors are those
factors does not come under the control of organization and management has no control over it. Like for
example HILTON, A hospitality company in the UK which has 4700 franchises with 775,000 rooms in
104 countries for the last 97 years this company is dedicating its best services and tradition to its
customers Here are two analysis on which basis we conclude management can be influenced by this
analysis-
PESTLE ANALYSIS- This analysis focuses on external factors that influence the business environment
within the organization PESTLE stands for Political, Economic, Social, Technological, Legal and
Environmental factors.
 Political Factor- These factors influences market in many ways, the policies or regulations made
by government that affect the market as firms are being established in the favourable and
unfavourable conditions set by the current government so for all of these things business has to
create a good identity and good relationship with government as to ensure that they must be
favoured (Renz, 2016).
 Economic Factor- These factors affect the management of any company in high rate as it is
directly proportional to the growth of the company economic factors include inflation rate,
exchange rate etc that reflects the growth of any economy.
 Social Factor- These factors include the social environment of management in the service
industry these factors have a large influence on the market which ultimately comes on the
economy as well.
 Technological Factor- In today’s era market of any industry is growing at a faster rate if they
have technological advancement t to produce any product or provide services to any customers it
directly refers to the innovation and creativity having an effect on the industry.
 Legal factors- These factors are not in control of the business, there are certain norms and policies
that made by the respective government of any country to the followed but these laws affect the
environment of any business.
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 Environmental Factor- These factors are external in which management of any company has no
control, it has a huge impact on business it includes global changes, climate, weather,
geographical etc.
SWOT ANALYSIS
SWOT Stands for Strength, Weakness, Opportunities and Threat of any organization here we will discuss
the SWOT analysis of the service industry in the United Kingdom.
 Strength- These are the advantages of any service industry they have strong tertiary which has a
good no. of well-educated who provides growth and increase the value of the organization. They
have a higher standard of living, consumers purchasing power ability is great so they are being
able to spend the amount on services.
 Weaknesses- These are disadvantages which affect the growth of the service industry like UK
industries has poor transport system, there is a wealth disparity between the poorer and the
wealthier, UK also has a poor level of innovation compared to its competitor in central Europe.
 Opportunities- This is an external factor that works as the potential of service industry like
tourism business as there was a rise in the year 2015 by 3.7% and forecasted to rise by 3.2% per
annum from the year 2015-2025. Travel and tourism (service industry) ensuring the visitors to
travel and understand the culture of in the United Kingdom (Sharma and Jain, 2013).
 Threat- These are the final factors in the SWOT analysis which says that in service industry
sometimes there situation occurs which talks about the financial crisis as the United Kingdom is
expensive which is not good for every individual as well as for business.
Analysis of Internal and External factors that influence Service industry Identifying strengths and
weaknesses
Like we discussed earlier in-service industry we provide the services regarding travel and tourism, retail,
food etc. which deals in intangible goods and provides customer satisfaction. Hilton a leading service
providing hospitality company which has more than 4700 franchises across the world Hilton’s growth is
phenomenal in-service industry (Smircich and Morgan, 1982). Service industry which is also known as
the tertiary sector as this company works for providing the services rather than a product. Likewise there
internal and external factors also influence the Service Industry.
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Strengths- Service sector or Tertiary sector has its main advantages like it can be a startup with low costs,
easy to start, direct entry. These services are such that any individual can start on their own and get the
maximum benefit they can get. Another advantage of this Industry that it can be started with no inventory
and or manufacturing products. For example HILTON, a hospitality company in London which provide
services regarding tourism and hotel lodging. These advantages are been got by the service industries.
Weaknesses- Just like strengths service industry have weaknesses too. In the UK 70% of the tourists land
here by plane. Tourism sometimes places a burden on the country's infrastructure. These are certain laws
that have been made by their government. Free movement sometimes causes severe problems in health
services. Estimation says that it costs 260 million dollars per year for supporting these visitors that came
from outside. It also must be noted that these industries have poor transport system which affects the
growth of the economy. These weaknesses can be solved if the service industry of the UK gives proper
attention to the transport facilities and other issues.
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LO 3
Current Management and Leadership hard and soft skills required in the service sector
Leadership and management play a significant role in the growth of any Industry. The organization needs
these hard and soft skills in their leaders and managers so that they can earn the maximum revenue.
Leaders in every organization are needed as they have that creativity and innovative thinking skills to do
something different who is having the ability to take growth in very less time for any organization. Hard
skills are that skill set of leadership and management that requires expertise to do a job successfully. It
also includes specific knowledge and abilities like accounting, financing, legal, web designing etc. It
makes you qualified to do any activity or job. In the service industry, we need these skills for the
customer's satisfaction as it is an activity that involves good communication between two persons which
is important in the service industry (Stacey, 2012).
On the other hand, soft skills include emotional intelligence, analytical thinking, empathy,
communication, Teamwork all of these qualities are needed in the leadership and management for the
successful growth of service industries employers need both the skills so as to act accordingly in different
scenarios. Service industries are raising the UK economy has most of their revenue generating from the
service sector or service industries. In the current management the competition among companies has
become very tough we need leadership skills, hard skills and soft skills for the successful completion of
the task current management companies which are growing at a faster rate. current company’s new
technological advancement, innovation and creativity in their business for the growth of the service sector
as well as of the UK economy.
Future Management and Leadership Skills required in Service Sector
Future management refers to the adaptation, advancement and innovation in the trade or business. We
require change with every passing year and in today's modern era where technology and advancement
plays a crucial role in the growth of the service sector.
Leadership skills are required whether it is for current management or future management we need these
skills so as to achieve tasks of organization in future management we would need new models that make
our ability strong which build leaders who have the ability to empower others to give support to others.
As in service industry we see a brighter future as companies in the service sector are growing at a faster
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