Business Studies Paper on Leadership versus management

Leadership and management are two important terms in the world of business. The words leader and manager are interchangeable because their characteristics are interdependent. Both leadership and management can be used to define group behaviour in a corporate stetting. Leaders and managers should be well trained to achieve the established goals (Hughes et al., 2009).



Leadership means setting up goals and targets for a company in order to improve organisational performance. Leadership is focused on long term goals because the decision of the leaders can affect the future of the business and the whole organisation.  A great leader should have essential attributes such as vision, integrity, creative ability, risk taking and visibility (Capowslki, 1994).  Leaders are aimed at bringing a vision in order to motivate employees towards a set of goals (Raducan & Raducan). Peter Drucker sums up that the only definition of a leader is someone who has followers. Leaders set a direction, align people, motivate and inspire (Kotter, 2001)



Management is the process that is used to accomplish organisational goals, it is the process to achieve what the organisation wants. Management means providing effective control over the group in order to organise the group’s performance towards the set based on the established values and principles. (Raducan & Raducan).  A manager is the member of an organisation with the responsibility of carrying out the four important functions of management, planning, organising, leading and controlling. Managers are aimed at inspiring staff members to perform their duties in a proper way based on the established organisational goals (Moyles 2006).



How are they different?

Although leadership and management are overlapping concepts, the facet of management is what separates the two disciplines. Leadership entails influencing people to ensure that visions are reached enthusiastically. It differs from management because leadership is one of the major elements of management. On the other hand, management entails managing things in the best manner. It entails getting work done through others and with others in. According to Kotter, managers are individuals assigned the management task which they achieve through the key functions of organizing and staffing, controlling and problem solving. On the other hand, leaders set a direction, motivate and inspire others even as they align their team to the task at hand. Whereas a leader is innovative, courageous, flexible and inspiring, the role of the manager is analytical, authoritative and consulting in nature.


Leaders and managers are two ways of organizing people that are effectively used in business relationships. Leaders inspire and initiate change while managers are able to cope with challenges that may occur in the result of change. Other researchers conclude that a leader has soul, the passion and creativity while a manager has the mind, the rational persistence.

A well balanced organisation should have a max of leaders and managers to succeed, and in fact what they really need is a few great leaders and manager first class managers (Kotterman, 2006).


Leadership theory

  1. Transformational leadership

Transformational leadership style is a leadership approach that focuses on bringing about change in individuals and systems. Ideally, is should bring about positive change in the followers by converting followers into leaders. On its implementation, transformational leadership improves employee motivation, performance and the morale of followers in a variety of ways. This entails various mechanisms such as connecting to the teams’ sense of identity and the collective vision of the organization. Additionally, it challenges followers to take responsibility for their assigned roles and allows the leader to understand the weaknesses of their team to enable them leverage tasks that optimize their performance. Transformational leadership is underpinned by four elements:


  1. Individualized consideration

This element denotes the extent to which leaders attend to the individual needs of their followers, mentor and coach their team even as they address their needs and concern. This also allows the leader to offer the much needed support to followers to keep moving on.The individual contribution of follower to the team is recognized. This serves the purpose of intrinsically motivating the followers through self-development.


  1. Intellectual stimulation

Transformational leadership assesses the extent to which the leader takes risks, develops leaders’ ideas and challenges the existing assumptions. This leadership style also allows the followers to think independently to enable them confront challenges.


  1. Inspirational motivation

This denotes the manner in which the leader promotes a vision that both inspiring appealing. Transformational leaders encourage their followers to embrace optimism and providing meaning to the tasks given.

Idealized influence

The transformational leadership style serves as a role model for promoting trust and respectwhile instilling respect. Transformational leadership has grown as a development tool that has gained prominence in social organizations.


Leadership selection and development program at General Electric (GE)

General Electric (GE) employs over 300,000 employees operating in close to 200 countries that engage in innovative activities and delivering outcomes aimed at making the world a better place. GE strives to bring together the digital and physical worlds in ways that no other organization can. At GE, 80% of the learning programs take place on the job through performance development, expanding opportunities, and the assignment of challenging tasks. Waters postulates that this opportunity provides the GE team with new insights and experiences that accelerates staff professional growth and development (42-46). Moreover, learning is also facilitated through a GE portfolio whereby individual and collective learning (20% of GE learning) provides learning and development opportunities.

GE’s portfolio of early career development programs grows talent in critical areas of the organization in developing its leaders of the future. GE’s career training and development programs offer multi-year intensive development programs underpinned by a variety of options that help prepare internal candidates for more intensive leadership opportunities. At GE, the future of leadership is founded on the belief in individual success and collective progress in the spirit of the potential of one empowering the many and vice versa. Waters suggests that GE strives to meet its leadership development goals by investing in future leaders through a practice founded on the philosophy of the earliest days of the company (44). Currently, GE invests over one billion dollars annually in the global development of its staff.

GE develops strives to develop its employees at all stages of their professional growth and shares this vision across the whole organization. General Electric therefore strives to promote highly transformative learning experiences at all levels. Similarly a research conducted by Krishna moorthy, he suggested that the organization’s way of promoting leadership growth enables them get the best out of their human capital resources (15). GE teaches its people to lead change by embedding growth into the company’s DNA and by motivating teams leading various business divisions to incorporate organic growth each day.

GE encourages its staff to constantly seek opportunities and to create strategic visions that are likely to get everyone on board towards the cause. GE employees are trained to see the growth of the many aspects of its business in terms of innovation. It also leaders to assess their organizational structures and staff capabilities to enable them allocate resources accordingly. Bolden suggests that treating intact management teams is the key to overcoming resistance to change associated with the adoption of new management development programs (143-7). This plan is founded on the premise that when managers go through a program together, they are able to seize opportunities and seek the best way to solve problems. Accordingly, GE is able to attain speedy and more effective change.

The adoption of a team-based approach is suited to address the shortcomings associated with an individual-based approach inherent in tradition-based management training programs. GE identifies several leadership characteristics as critical to innovation, creation of new businesses and expansion into new markets. Firstly, Clinton hypothesizes that adopting an external focus is the key to defining success from the perspective of the customer (116). This should be in line with a leadership vision that transcends the usual business trends. Additionally, it teaches leaders to be clear thinkers capable of creating simple solutions to complex problems.

Leaders should be clear thinkers capable of creating simple solutions to complex problems while communicating clear and unwavering priorities. Additionally, Krishnamoorthy suggests that GE’s leadership school teaches leaders to be imaginative and creative while opening up to change (14). A leader should be capable of taking risks on both ideas and people while demonstrating courage and resilience. GE also trains its leaders to be team players, capable of respecting each other’s ideas and inputs while creating excitement around change while building commitment.

At GE, leadership development is carried out organization-wide and not just at the top management levels. Different competencies and skills are fostered at different levels, and at various career transition stages, to enable them learn from experiences while ensuring they are ready for new leadership demands at higher levels. Gagnon and David postulated that a crucial corporate value promoted through the leadership development programs is the need to lead through managing change which can be best attained through eliminating centralized planning (652).

The change acceleration process at General Electric is the key to ensuring that people are ready for change. Here, the company made it compulsory for all business division leaders to receive change-related training to ensure that organizational members are hungry to learn. The attainment of these goals is incorporated in the core leadership competencies of the company’s future. They are also construed as the core leadership goals for the future of General Electric. Seidle et al. posit that these are the values that leaders need to develop in its followers particularly where the future cannot be predicted with any uncertainty (607-9). Ultimately, the change acceleration process entails creating a force of change.


360-degree feedback- Action learning and coaching are the most commonly applied leadership development models at GE. More specifically, it is about being consistent with the practice adopted every time. In fact, GE acknowledges that what it does with respect to leadership development is nothing new. However, Waters argues that aligning the adopted initiatives with the core values and the overall organizational strategy pushes staff to implement the adopted change with passion (44).


Effectiveness of the Adopted Programs in the Development of Leadership Skills

Action Learning. According to the proponents of action learning, people learn more effectively when they take action than when they listen to others passively (Oracle Cloud Service 9). Learning this way is a familiar route taken by General Electric in its training and development programs. Action learning engages the learner through meaningful action which incorporates reflection and inquiry. It also merges new knowledge with existing knowledge. At GE, the action learning leader specifically applies this strategy with staff to not only identify what they learnt but also how these lessons can be applied in future.

Action learning increases the ability to generalise through the application of what is learnt in various situations with varying degrees of difficulty and complexity. In the early stages of the action learning process, organizational members grapple with basic problems such as how

to make decisions and balance personal and organizational goals. As the problem and end goal become clearer, team tasks and processes become more complicated, although these tasks are replicated throughout the life of the team. However, as these skills are practiced more, the team gets used to problem-solving and decision-making processes. As the staff becomes more proficient in dealing with rising challenges, leaders offer less feedback and encourage them to be more self-driven (Oracle Cloud Service 12-16).


360-degree Feedback. This leadership development process extends the conventional performance appraisal methods by utilizing a multi-rater/survey methodology. At GE, assessments from team members are given to coworkers in a 360-degree feedback loop that helps in identifying and tracking leadership development. Oracle’s research concluded that the effectiveness of 360-degree feedback is in its systematic and regular usage as a tool for identifying leadership development needs (13-15). Internet usage has made it easier to give 360-degree feedback instantly on the web. Managers can now make use of the internet to access training programs and other critical information suited for a particular business problem.



How GE’s Leadership Selection and Development Programs vary at different levels

At the corporate entry-level program, recent university graduates are offered development opportunities that integrate formal classroom learning with real-world job experience. Krishnamoorthy suggests that a variety of rotating assignments allows young professionals to receive accelerated professional development delivered through mentors across all General Electric business divisions (9-12). Experienced leaders seeking to accelerate their careers are trained in GE’s Experienced Leadership Programs. These programs enable talented professionals to collaborate with innovative leaders in their professional fields, while gaining intensive development opportunities in various organizational areas.

Driving change in a company the scale of GE is no mean feat. However, GE has managed to turn the challenge of change into an opportunity by focusing on the global market when leading its businesses, people, and regions. The adopted growth leadership traits have to do with clear thinking. Inclusiveness and external focus have enabled the top management to lead the organization from the outside in. The above growth traits allow the organization engage effectively with its customers, staff and external markets (Theisohn 363). To ensure that these ideas are appropriate for growth, mentors should strive at personalising the above traits in a distinct and effective way across the organization.

GE attracts talented individuals who are exposed to a challenging environment that prepares them for future challenges. Accordingly, GE mentors are assessed on how effectively they guide leadership trainees on goal setting and professional development. Leaders are also tasked with ensuring the functional competence of their teams, while guaranteeing the business excellence of their trainees in a business environment that calls for unyielding integrity.




Contextualise the selection and training program within the previous theoretical discussion.

The leadership model that best applies in GE’s leadership development training is transformative leadership. The leadership vision is developed is nurtured thruogh a range of communication skills that engage the leaders in an engaging and innovative way because followers are ensouraged to invest more effort in their roles, they tend to be believe in their abilities more. The extent to which leadership is transformational can be appraised at GE based on the current impact on followers. On its implementation, transformational leadership improves employee motivation, performance and the morale of followers in a variety of ways consistent with the above theoretical framework.

As applied in leadership development programs, one of the fundamental flaws of using innovative leadership training is resistance to change. If team members are yet to conform to it, they may oppose the implemented changes. The solution to this problem is adopting transformative leadership whereby mentors go through the training program together with the team and come up with a consensus approach to problems and opportunities and how to deal with them. It is anticipated that this could result in speedy and more effective change. Before commencing the training program, the top management at GE assessed the company’s success in nurturing creativity that is underpinned by transformative leadership style.

It was established that team members support each other through constructively discussing and challenging each other’s approaches. Additionally, transformative leadership ensured that trainees were empowered to test new approaches in their roles while fostering trust that made them feel safe to share ideas and work together. Transformative leadership further allowed members to take risk and make speedy decisions during times of uncertainty. Due to their personal involvement, the team felt connected and was able to take pride in their individual roles. The adopted leadership style also allowed trainees to view the organizational climate as easygoing and relaxed. Accordingly, team members are given the time to brainstorm and come up with new ideas.

Consistent with the transformative leadership style, GE adopts various leadership traits as necessary for creating new business lines and further market expansion. Firstly, Clinton hypothesizes that adopting an external focus is the key to defining success from the perspective of the customer (116). This allows GE to transfer new technologies to its existing customers through adjacencies in innovative technologies. This should be in line with a leadership vision that transcends the usual business trends. Additionally, it teaches leaders to be clear thinkers capable of creating simple solutions to complex problems



GE spends over one billion dollars in training and development programs for its staff annually across the globe. Waters observes that the company’s dedication to its staff training program is most evident at the the John F. Welch training center, New York. This learning center is the first of its kind whereby the company’s top leaders mentor young innovators based on real world experiences. The company also facilitates global learning on online platforms that target over 3.4 million global trainees. GE acknowledges that a properly built leadership development program is critical in identifying and attracting new talents in corporate leadership.

Leadership development is the key to obtaining maximum output from GE’s leadership development programs, which also requires the effective implementation of talent management programs. Several benefits accrue from the utilization of leadership development programs, which include improved employee morale, increased employee retention, talents are aligned with organizational goals and development goals that are measured through development and performance management. Talent management practices can also be pursued through technological applications capable of identifying and nurturing leaders that promote business performance.


Works Cited

Bolden, Richard. “Leadership, Management and Organisational Development.” Gower handbook

            of leadership and management development. Routledge, 2016.143-158.

Clinton, J. Robert. The Making of a Leader: Recognizing the lessons and Stages of Leadership       Development. Two Words Publishing, LLC, 2017.

Day, David V., et al. “Advances in Leader and Leadership Development: A Review of 25 Years of Research and Theory.” The Leadership Quarterly 25.1 (2014): 63-82.

Gagnon, Suzanne, and David Collinson.”Rethinking Global Leadership Development       Programmes: The Interrelated Significance of Power, Context and       Identity.” Organization Studies 35.5 (2014): 645-670.

Krishnamoorthy, Raghu. How GE Gives Leaders Time to Mentor and Reflect. Harvard    Business Review. Vol 12, Issue No.7, 12-20, 2014. Pdf

Leitch, Claire M., Christel McMullan, and Richard T. Harrison. “The Development of        Entrepreneurial Leadership: The Role of Human, Social and Institutional Capital.” British   Journal of Management 24.3 (2013): 347-366.

Oracle Cloud Service.Seven Steps for Effective Leadership Development.An Oracle White Paper,           7-16, 2012. Web

Seidle, Brett, Sergio Fernandez, and James L. Perry. “Do Leadership Training and Development Make a Difference in the Public Sector? A Panel Study.” Public Administration Review

            76.4 (2016): 603-613.

Theisohn, Thomas. Ownership Leadership And Transformation: Can We Do Better for       Capacity Development. Routledge, 2013.

Waters, Robert. Evolution of leadership development at General Electric.Engineering        Management Journal.Vol 21 Issue No.1, 42-46, 2015.