Types of leadership

E2 – Managing Performance · CIMA (CGMA Professional Qualification) · 6 min read

Welcome to Your Guide on Types of Leadership!

Hello there! We are diving into a crucial part of the CIMA E2 syllabus: Managing People Performance. In this chapter, we explore how different ways of leading can change the way a team performs. Whether you are a natural-born leader or find the idea of managing others a bit daunting, these notes will break down the theories into simple, bite-sized pieces.

Don't worry if some of these names sound academic at first. By the end of this page, you’ll see that leadership isn't just about "being the boss"—it's about choosing the right tools for the right situation!

1. Management vs. Leadership: What's the Difference?

In Section B of your E2 exam, you need to know that management and leadership are not the same thing, even though people often use the words interchangeably.

Warren Bennis famously summarized it like this:
"The manager does things right; the leader does the right thing."

Key Differences to Remember:

Managers: Focus on systems, structures, and control. They look at the short-term and ask "how" and "when." Think of a manager as the person who ensures the trains run on time.
Leaders: Focus on people, trust, and inspiration. They look at the long-term (the "horizon") and ask "what" and "why." Think of a leader as the person deciding where the tracks should be built in the first place.

John Kotter also noted that Management is about coping with complexity (keeping things orderly), while Leadership is about coping with change (setting a new direction).

Key Takeaway: Organizations need both. Too much management without leadership leads to a boring, stagnant company. Too much leadership without management leads to a chaotic company with a great vision but no way to achieve it!

2. The Leadership Continuum (Tannenbaum and Schmidt)

Some people think you are either a "bossy" leader or a "kind" leader. Tannenbaum and Schmidt suggested that leadership is actually a continuum (a sliding scale) based on how much authority the manager keeps versus how much freedom the team gets.

The Four Main Stages:

1. Tells: The manager makes the decision and simply announces it. (High manager authority).
2. Sells: The manager makes the decision but tries to persuade the team to accept it.
3. Consults: The manager presents the problem, gets suggestions from the team, and then makes the decision.
4. Joins: The manager defines the limits and lets the group make the decision together. (High subordinate freedom).

Analogy: Imagine choosing a restaurant for dinner. "Tells" is "We are eating pizza." "Consults" is "What do you all feel like? Okay, based on that, let's go for Chinese."

Quick Review: There is no "right" spot on the continuum. It depends on the Manager (their personality), the Subordinates (their skill level), and the Situation (is it an emergency?).

3. Action-Centered Leadership (John Adair)

If you find leadership theories confusing, John Adair’s model is great because it’s so visual. He uses three overlapping circles. To be successful, a leader must balance three responsibilities at the same time:

1. Achieving the Task: Getting the job done (setting goals, allocating resources).
2. Managing the Team: Keeping the group working together (communication, team spirit).
3. Managing the Individual: Looking after each person’s needs (coaching, praising, motivation).

Did you know? If you focus only on the Task, the team might burn out. If you focus only on the Individual, the job might never get finished! You have to keep all three circles in balance.

4. Situational Leadership (Hersey and Blanchard)

This is a favorite for examiners! Hersey and Blanchard argue that a leader should change their style based on the "Readiness" (or maturity) of the followers. Readiness is a mix of Competence (can they do it?) and Commitment (do they want to do it?).

The Four Styles:

1. Telling (S1): For followers with low competence and low commitment. Use high task-focus and low relationship-focus. Give specific instructions.
2. Selling (S2): For followers with some competence but low commitment. Use high task-focus and high relationship-focus. Explain "why" to get them on board.
3. Participating (S3): For followers with high competence but low/variable commitment. Use low task-focus and high relationship-focus. Support them and share the decision-making.
4. Delegating (S4): For followers with high competence and high commitment. Use low task-focus and low relationship-focus. Let them get on with it!

Common Mistake: Students often think "Delegating" means the leader does nothing. Actually, it means the leader trusts the team enough to give them autonomy, but the leader is still ultimately responsible.

5. Transactional vs. Transformational Leadership

This is a modern way of looking at leadership that is very relevant in today's fast-changing business world.

Transactional Leadership (The "Exchange")

Think of this like a trade. The leader gives the employee a salary and bonuses, and in return, the employee does the work. It’s about compliance and rewards/punishments. It works well in stable environments where tasks are clear.

Transformational Leadership (The "Vision")

This is about inspiration. These leaders want to change (transform) the organization. They use their personality and vision to motivate people to do more than they ever thought possible. They focus on "The Big Picture."

Memory Aid:
TransACTIONal = Focus on the Action/Task and the reward.
TransFORMational = Focus on Forming a new future and inspiring the heart.

6. The Ashridge Model

Very similar to Tannenbaum and Schmidt, the Ashridge Management College identified four styles of leadership based on how much the manager involves the team:

1. Tells: Manager decides, staff obeys. Efficient in a crisis.
2. Sells: Manager decides but persuades staff it's a good idea.
3. Consults: Manager listens to staff before deciding. Staff feel valued.
4. Joins: Decision is made by the group. Creates high levels of commitment.

Quick Review Box:
- Autocratic = Tells/Sells
- Democratic = Consults/Joins
- Laissez-faire = Handing over almost all control to the team.

Summary and Key Takeaways for Your Exam

When you are answering questions on Leadership in the E2 exam, always keep these points in mind:

1. Context is King: There is no single "best" leadership style. The best style depends on the task, the people, and the time pressure.
2. Flexibility: Great leaders (like those in Situational Leadership) can switch styles depending on who they are talking to.
3. Balance: According to Adair, you must balance the Task, the Team, and the Individual.
4. Leadership vs. Management: Leaders create change and vision; managers create order and consistency.

Don't worry if this seems like a lot of names to remember! Focus on the concepts first. Once you understand the difference between "Telling" and "Consulting," the names of the theorists will start to stick naturally. You’ve got this!

Quick check

Can you answer these now?

Open each question to check the key ideas from this chapter.

What is the key distinction between a manager and a leader according to Warren Bennis?

Bennis famously summarized the difference as: "The manager does things right; the leader does the right thing."

How does John Kotter distinguish the roles of management and leadership in an organization?

Kotter defined management as coping with complexity to bring order, while leadership is about coping with change by setting a new direction.

What does the Tannenbaum and Schmidt Leadership Continuum illustrate?

It illustrates a range of leadership styles based on the balance between the manager's use of authority and the subordinates' area of freedom.

What are the three core responsibilities in John Adair’s Action-Centered Leadership model?

The three responsibilities are: Achieving the Task, Managing the Team, and Managing the Individual.

What determines the appropriate leadership style in the Hersey and Blanchard Situational Leadership model?

The style is determined by the "Readiness" (or maturity) of the followers, which is a combination of their competence and commitment.

Match the four Situational Leadership styles (S1 to S4) to their follower readiness levels.

S1 (Telling) for low competence/commitment; S2 (Selling) for some competence/low commitment; S3 (Participating) for high competence/variable commitment; S4 (Delegating) for high competence/commitment.

What is the focus of Transactional Leadership?

Transactional leadership focuses on a system of exchange, utilizing rewards and punishments to ensure employee compliance with short-term tasks.

What is the primary objective of Transformational Leadership?

The objective is to inspire followers through a shared vision and charisma to change (transform) the organization and achieve higher levels of performance.

What are the four leadership styles defined by the Ashridge Model?

The four styles are Tells, Sells, Consults, and Joins.

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