Differences between leadership and management

Theorists continue to debate the relationship between leadership and management. Some theorists argue that leadership is simply one of the many functions of management (Tranbarger 1988), while others assert that leadership requires an extended range of complex skills and that management is simply one role of leadership (Gardner 1986).

When examining the literature on both leadership and management it is evident that both concepts have a symbiotic or synergistic relationship with each other. That is, in order for managers and leaders to function effectively, the two concepts must be integrated (Marquis & Huston 1996). Traditionally, strong management skills have been highly valued within health care organisations. However, more recently the demand for leadership skills has gained prominence. We will return to the difference between leadership and management later in this chapter.

Development of management theory

Like nursing science, management science has developed a theoretical base from a wide range of other disciplines, such as business, psychology, sociology and anthropology. Over the last 100 years, theorists’ views of what constitutes successful management practices have evolved because of the ever-changing nature of health care organisations and the external and internal environment in which they are located.

In order to understand health care organisations, it is necessary to clarify some of the different theoretical approaches used to describe organisations in general. Systems theory offers a range of insights into the functions of organisations. Sampson and Marthas (1990) describe systems theory as having specialised components that work together interdependently to form an overall balanced framework.

Organisations conduct their everyday activities by taking either an open systems or a closed systems approach (see Table 1.1). The open systems approach places importance on the links between organisations, emphasising the need for ensuring open lines of communication. They must also be adaptative, innovative and flexible (Shortell & Kaluzny 1997). On the other hand, organisations with a closed systems approach tend to function independently from the external environment and have processes and procedures set in place to ensure that the organisation’s internal efficiency reaches its full potential.

Table 1.1 Open and closed systems functions

A brief summary of the various theoretical approaches undertaken during the development of management theory is presented on the following pages.

Scientific management

In the late nineteenth century, Frederick W. Taylor was working as a mechanical engineer in a steel plant in Pennsylvania. At the time, ‘systematic soldiering’ was rife— workers would undertake the least amount of work possible to achieve minimum standards. Taylor (1911) believed that the introduction of ‘one best way to accomplish a task’ would ensure workers achieved an agreed-upon standard, which in turn would lead to increased productivity.

Did scientific management achieve results? Yes. Indeed, productivity and profits increased dramatically. However, from a closed systems perspective on organisations, scientific management saw puritan work ethics prevail and indeed some have argued that Taylor was ahumanistic.

Bureaucratic theory

In 1922, Weber expanded upon Taylor’s theories and wrote an essay entitled ‘Bureaucracy’, which espoused the need for more rules, regulations and structure within organisations to further improve efficiency and productivity. This closed systems approach encouraged the establishment of an internal hierarchy with clear lines of responsibility and authority. Professional bureaucratic management strategies have traditionally dominated health care organisations. Indeed, Weber’s theories and design for bureaucratic organisation are still largely used today in the majority of health care organisations around the world. The structure includes parallel professional and administrative hierarchies with specific lines of responsibilities and operating rules and procedures.

Identification of management functions

In 1925, Fayol described the management functions of planning, organisation, command, coordination and control. Gulick (1937) extended this work by introducing the ‘seven activities of management’—planning, organising, staffing, directing, coordinating, reporting and budgeting. These theorists also took a closed systems perspective on organisations.

Human relations theory

In the 1920s the introduction of the assembly line meant that great numbers of relatively unskilled workers were working in large, complex factories on specific tasks. There was great worker unrest, causing human relations theorists to examine what motivated workers to work. M. P. Follett (1926), in her essay entitled ‘The Giving of Orders’, asserted that managers should have authority with, rather than over, employees. Follett was one of the first theorists in this era to argue for what is known today as ‘participative decision-making’.

Other human relations theorists such as Mayo (1953), McGregor (1960) and Argyris (1964) all expanded upon her work. Mayo identified the ‘Hawthorne effect’. He found that employees increased their productivity levels when special attention was paid to them, regardless of any other changes in their working environment. He noted that people responded to the fact that attention was being paid to them and that they would continue to display the behaviour needed to continue to gain the attention. McGregor (1960) extended upon these concepts by labelling managers as either Theory X or Theory Y managers, depending upon their views of how employees performed their activities (see Table 1.2). Argyris (1964) reinforced the theories of Mayo and McGregor by arguing that managerial domination leads workers to become discouraged and passive, therefore creating low productivity levels and reduced profits. He believed this would subsequently lead to troublesome employees, and eventually an increased turnover of staff.

Table 1.2 Historical development of management theory

Although human relations theory seeks to empower individuals, it still adopts a closed system approach to improving the workplace. Individual worker motivation and involvement are recognised by the organisation; however, to encourage harmonious social relations, appropriate structures are usually institutionalised to suit the type of workforce employed. Managers often espouse the importance of developing interpersonal communication and collaboration with individuals to improve workplace relations, while commonly using systems of performance management to motivate workers.

The human relations theory of organisations is based upon a static environment where structures are organised around the professional disciplines. On its own it is not sufficient to describe complex health care organisational structures. Nor does it adequately provide a means of understanding and managing the changes that are taking place in today’s health care organisations (Lloyd & Boyce 1998).

Institutional theory

Institutional theory takes an open systems perspective of organisations. It examines how organisations succeed by ensuring they fit together with the external environment (DiMaggio & Powell 1983; Powell & DiMaggio 1991). Powell & DiMaggio (1991) argued that organisations gain legitimacy from key external stakeholders as they adopt norms, rules and values that reflect the stakeholders’ belief systems. By adapting to the external stakeholder environment, organisations signal their congruency with the expectations of stakeholders, such as funding agencies, governments, professional bodies and customers (Daft 1998).

Population ecology theory

Population ecology theory is another open systems approach to organisation theory and is founded on the notion that an organisation’s success depends on its relationship to competitors in its external environment (Hannan & Freeman 1977). The theory is similar to that of natural selection in biology, whereby as pressures increase on a population within a similar environment, the stronger and more dominant will survive while the weak will suffer and become extinct. Thus, in organisations subject to similar external environments that are under pressure, the more powerful will survive and prosper and the weaker will not.

Subsequently, a gradual evolution of organisational structural changes will occur within the organisation in order to accommodate the complexities of the external environment. Daft (1998) notes that niche markets are often left open in unexploited environments.

Within health care organisations, unresolved social dilemmas concerning inadequate service provision can become the subject of media campaigns and taken up in the political arena. Organisations that are able to adapt their organisational structures to address the complexity of change will therefore be more likely to survive.

Strategic management theory

Strategic management theory is yet another open systems approach to organisations. The organisations that use this theory seek to incorporate the internal and external environment into their planning process as they strive to meet targeted objectives. Strategic management theory is commonly used in health care organisations because of the need to try and balance limited resources while ensuring that patient care is not threatened. These organisations take an ordered approach to the planning process and define and regularly monitor their chosen organisational goals and objectives to ensure they meet budgetary performance targets (Biscoe & Lewis 1996; Ellis & Brockbank 1993).

An overview of these various theoretical approaches is presented in Table 1.2. More recently, we have seen organisations moving towards more open systems perspectives in an endeavour to adapt to the ever-changing environment. This paradigm shift will be discussed in the following section.