Concepts of Management and Leadership

The concepts and management have currently quite standardized content and definition, but it has not always been like this. This article discusses the concepts of management and leadership based on various sources.

TEXT | Viktoriia Dergletckaia and Ossi Koskinen
Leadership and management written on a wooden block.

Harvard Business School professor Abraham Zaleznik published 1977 his first article about the differences between managers and leaders, and this publication has supported our current understanding of the concepts of Management and Leadership. These two phenomena are overlapping each other but they are two very distinct concepts. Henri Fayol (1949) launched first six different management activities, and he later reduced the number to five duties a manager should carry out. Later generations combined two of the activities and nowadays management is mainly considered to consist of four activities: planning, organizing, directing, and controlling.

Leadership has a very different nature from management, but the objective of leadership is the same as management has – to make the organization prosper and reach good results. There are three generic objectives and areas where the organization should reach good results: customer satisfaction, employee well-being, and financial results. Leadership is trying to reach good results by creating a vision, doing major changes, communicating new directions, and inspiring the followers.

In current turbulent times when changes are inevitable and organizations must be flexible enough to survive, the role of people who guide the company through the challenges becomes more and more important. In the science of organizational theories, there is a wide consensus about the focal role and impact of management on the achieved results. Drucker pointed out already in 1954, the importance of qualified management and how the organization’s success and results are depending how different resources (financial, human, technical, raw materials, etc.) are managed.  When we talk about guiding a team within an organization, we use either “leader” or “manager” terms addressing the people who oversee some department or are responsible for specific projects or strategic direction. Toor (2008) claims that management and leadership are two separate conceptions, and the difference is based on underlying principles, philosophies, and outcomes. Maccoby (2016) states that generally management is associated with administration, but leadership is considered as a force, which drives the change in the organization.

Management and leadership definition

To define the highlighted terms – “management” and “leadership”, Toor (2008) investigated the etymology of both words. The roots of “Leadership” go back a few centuries and have their origins in the word “loedan”, which stands for travel. At the same time “management” originated from the Italian “meneggiare”, which means handling things, in the initial context – handling the horses. Toor (2008) emphasizes that historical connotation refers to “leadership” to the ability to guide, influence and persuade others, whereas “management” is associated with control, supervision, and giving a clear direction. The first discussions on leadership date back to ancient times when philosophers such as Aristotle, Sun Tzu, Nicollo Machiavelli, and others referred to the role of the person who can guide and motivate a big group of people (Toor, 2008). In contrast, the first studies on management appeared at the beginning of the 20th century and were caused by the industrial revolution and the appearance of big organizations which required proper guidance.

Burns (1978) describes leadership as “the reciprocal process of mobilizing by persons with certain motives and values, various economic, political and other resources, in context of competition and conflict, in order to realize goals independently or mutually held by both leaders and followers.” Bennis (1989), states that leadership is the “process that involves leaders, followers, and situations.” Maccoby (2016) claimed that “leadership is a relationship between leader and led that can energize an organization”. There are even more definitions, and each researcher proposes their own vision of leadership, however, there is one common observation from all the definitions. Leadership is always associated with a certain set of behaviors including the ability to motivate, energize and drive people to perform their work.

What regards the definition of “management”, authors of relevant studies have more points of agreement compared to defining “leadership”. Daft (2003) gives the following definition of management: “the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources.” Levitt (1976) says that “management consists of the rational assessment of a situation; the systematic selection of goals and purposes; the systematic development of strategies to achieve these goals; the marshaling of the required resources; the rational design, organization, direction, and control of the activities required to attain the selected purposes; and finally, the motivating and rewarding of people to do the work.” The scholars mainly agree on the conceptual definition of management, emphasizing planning, strategic goal setting, and control.

The difference between management and leadership

The difference between “management” and “leadership” arises already from the definition. If the fundamentals of leadership lie in the emotional side of behavior – energizing, motivating, and inspiring people, the basement of management relies on the rational side including planning, administrating, and controlling. Toor (2008) also underlines that the distinction between both terms comes from their origins. Leadership is a process, which accompanied human life from the very beginning in political, governmental, and religious contexts. Management appeared much later when emerging of complex organizations started to require a specific set of rules. Thus, leadership is a natural process and appeals more to the hearts of people rather than management which is a formal process appealing mostly to people’s minds. Stogdill (1997) highlights that leadership emerges within a group of people independently of rules and requirements, but management is based on formal appointments and traditional hierarchies.  Many scholars associate leaders with major change, stating that leaders often act as change agent (Maccoby, 2000) and even can generate a potential for critical change (Kotter, 1990) while manager, in opposite, strives to regulate the change process and managers prefer low-risk level and incremental change compared to “tiger jumps” that leaders do.

There is also a difference between managers and leaders coming from a behavioral aspect. Zaleznik (1977) believes that management culture is based on control and rationality, making managers more organized and structured by nature. On the other hand, the leader is capable to drive, convince and intrinsically motivate people. This requires another type of behavior compared to managers. Managers, who normally act in accordance with rules and frameworks, are often unable to cope with dramatic changes, which require innovative ways of thinking. Since management is about formal ways of guiding people, applying existing behavioral schemes is appropriate because it helps to act right in similar situations. A leader, in opposite, can act differently even in similar situations if his intrinsic feeling prompts that it is necessary. Here one more important distinction comes to the spotlight. Leaders trust their own intrinsic values and are often driven by their own rules and beliefs. The way how managers act is often guided by others or by business targets they need to achieve (Bennis, 1989).

Covey (2004) also claims that managers tend to act within conventional patterns while leaders are keen to invent new patterns.

Toor (2008) summarized the distinctions between management and leadership proposed by many researchers in Table 1.

Leaders are change agents. Leaders are more about soul and heart.Managers are principally administrators. Managers are more about mindMaccoby (2000)
Leaders have good intuition and insightManagers have good analytical ability.Capowski (1994)
Leaders are not keen to escape the risk, they are fond of challenging circumstances. Leaders seek new ways and opportunities to perform.Managers prefer to minimize the risk. Managers strive to standardize and limit the number of options.Zaleznik (1977)
Leaders strive to invent and develop new goals.Managers have strictly defined goals and try to stabilize the work.Kotter (2006)
Leaders generate the sources for radical change.Managers tend to produce standards and ensure stability.Kotter (1990)
Table 1. Distinctions between managers and leaders according to researchers

Activities related to management and leadership

Kotter (1990) underlines that leadership and management are characterized by a specific set of activities. Among key manager’s activities, Kotter names planning, budgeting, setting goals, administering the personnel, monitoring, and problem-solving. At the same time, a leader tends to align people, set a direction, inspire people, raise credibility among employees, act proactively anticipate the changes and successfully handle it.

Maccoby (2000) claims that leaders reveal and select the talent, raise the talent by inspiring them, train the talent, and maintain the talent by creating a trustful atmosphere. On the opposite, managers tend to plan, budget, estimate the options, and push forward. Later in his research, Maccoby (2016) develops this message and offers a concept that views management as a function but leadership as a relationship. The activities listed above – planning, budgeting, evaluating, and facilitating are combined in a framework describing management function. Making each of these activities more effective will enhance overall management skills. On the other hand, selecting the talent, coaching, and retaining attribute to the relationship cycle.  Maccoby (2016) make emphasis on developing the trust between the leader and the led, which is also a characteristic of any relationship.

Wajdi (2017) focuses his study on revealing the skills to be developed by leaders and managers. Accordingly, these skills are different depending on the activities, which are expected to be performed by both.  As for manager, Wajdi (2017) highlights planning, building, and directing organizations’ systems to achieve the goals. What is for a leader, its skillset is used to establish direction, align employees, and motivate them.

Even though management and leadership are different by nature, they have some common aspects. Kotterman (2006) claims that management and leadership are overlapping but they do not coincide. The key common aspect is that both involve working with people and moving to achieve agreed goals. Leaders work with followers, incentivizing them and giving a direction. Managers work with subordinates to state a formal goal.


As observed from relevant articles and publications, leadership and management are different phenomena. However, what is important, they are not antagonistic; in the best scenario, they should complement each other within the organization. Many researchers after discussing the peculiarities of management and leadership, eventually agree on the need to combine both approaches.

Toor (2008) claims that companies should strive to have a few good leaders but many managers with strong capabilities to run it. To strengthen his position, Toor (2008) declares that organizations need to grow leadership skills among managers to exploit fully human resources potential. Most often companies lack leadership at all levels, and leveraging on the leadership potential of their managers will bring an organization to better business outcomes. In current turbulent times when change is an inevitable part of life, losing the focus on new approaches and fresh ideas is unacceptable. Thus, organizations should focus on raising as many leaders as possible whereas making sure that leaders also possess managerial skills.

Gardner (1990) introduces the concept of leader-manager, a role combining both management and leadership skills. This person should be a visionary capable to anticipate the future and inspire the team to work effectively to handle upcoming changes.

To sum up, it is important to notice that switching between management and leadership is not a matter of choice – neither management is the best option nor leadership. It is more about finding the right balance between managerial and leadership skills for a definite type of industry and for a specific period. Both management and leadership is needed to handle the business in the current complex and changeable business environment (Kotter, 1990).

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