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The Difference in Leading an Organization and Managing an Organization

  • 21st Mar'23

For years, people have been trying to find a definitive answer to the age-old question: What's the difference between leading an organization and managing an organization? In this article, we will explore both sides of the equation in-depth and help you determine which one is right for you.


The Structure of an Organization


Leading an organization and managing an organization are two very different tasks. Leading an organization is about leading people and creating a vision for the future. Managing an organization is about taking care of the everyday functioning so the company can run smoothly. 


An organization can have several structures, from a small family-owned business to a multinational corporation. Each has its own set of advantages and disadvantages. Here are some of the most common corporate systems, and what they entail:



A hierarchy is a system in which positions are ranked based on their importance or authority. The top roles in a hierarchy are generally the most important, and those below have less authority. This structure is often used in organizations because it allows leaders to control the overall direction and strategy of the company while giving lower-ranking employees a sense of responsibility and ownership. 


Drawbacks to using a hierarchy include "the tyranny of distance." It implies that leaders at the top of the hierarchy tend to be oblivious to what's happening at lower levels, which can lead to problems down below. In addition, hierarchies can be challenging to change if needed, as it can be difficult to move someone up in the chain of command without upsetting everyone else. 


Flat Organizational Structure: 

A flat organizational structure is one in which all positions are equal. Smaller businesses or startups often use this structure when they lack the resources to create a hierarchy. It puts everyone on an equal footing and avoids the problem of "the tyranny of distance." However, a flat structure has drawbacks. It can be difficult to make decisions without someone in authority. Additionally, managing multiple projects can be difficult when each one is assigned to a single person.


Matrix Organizational Structure: 

A matrix organization is similar to a flat structure in that all positions are equal. However, in a matrix organization, each position has a vertical (up) and horizontal (down) dimension. For example, a salesperson might have a vertical dimension representing their departmental responsibilities, such as selling widgets; and a horizontal dimension representing their sales territories, such as Florida or Texas. This type of structure is often used in organizations with multiple departments that have overlapping duties and responsibilities. 


The Functions of an Organization


An organization is a group of people united by a common goal. The function of an organization is to achieve its goal. 


The different functions of an organization are planning, directing, organizing, and controlling. 


Planning is the process of creating a blueprint for how the organization will achieve its goal. Directing is setting goals and making decisions about how to achieve them. Organizing is putting everything in place so that the organization can successfully achieve its goals. Controlling is ensuring that the organization meets its goals and objectives.


The Leadership Styles in Organizations


Leadership styles refer to the approach an individual or group follows to lead and manage a team. There are many different leadership styles, but the three main styles are autocratic, democratic, and deliberative.


Autocratic leadership is when an individual leader makes all the decisions without consulting others. This style is used primarily in a tight hierarchy where only the top leader has authority. This type of leadership can be effective when there is a clear goal and a clear path to achieving it, but it can also be difficult to change course if things go wrong.


Democratic leadership is when leaders make decisions by consulting with others. This style is more flexible than autocratic leadership and allows for more debate and disagreement within the team. They understand the importance of motivating employees and then lead them in the best way they can. However, this type of leadership can also be less effective when there are disagreements about which direction to take the team or when the goal is not clearly defined.


Deliberative leadership is when leaders work together to come up with solutions to problems before they arise. This style is often used in organizations with more dispersed authority where no one leader has complete control over everything. The key to success with this type of leadership is to create a consensus among team members about the goals and objectives and the best ways to achieve them. They also understand the benefits of effective work management and act upon it accordingly.


Differences Between Managing an Organization and Leading an Organization

Managing an organization is about directing the activities of a workforce to meet the organization’s goals. Leading an organization, in contrast, is about creating and managing a team that can achieve these goals.  


A critical difference between leading and managing an organization is that managers typically manage the resources, while leaders must inspire their team to use its resources effectively. Managers typically oversee tasks and deadlines, while leaders are responsible for setting objectives and inspiring their teams to achieve them. Managers monitor employee performance and provide feedback, while leaders encourage employees to take risks and give them feedback on how they performed. Leaders also assess the success of their team’s efforts and make changes accordingly.


Another key difference between leading and managing an organization is that managers typically focus on short-term outcomes, while leaders focus on long-term results. Managers attempt to optimize organizational performance by focusing on efficiency or output, while leaders focus on effectiveness or results. Leaders also place a higher priority on stakeholder satisfaction than managers, as they want their teams to be successful to maintain their credibility with the stakeholders. 


The relationship between leadership and management is co-dependent, but there are a few differences that set these jobs apart. Leaders must be able to identify both short-term and long-term goals of their team to create effective strategies; this differs considerably from the management task of optimizing organizational performance through efficiency or output measures alone.




Managing an organization is difficult, but it can be a rewarding experience. A good manager can lead the organization toward its goals while ensuring employees are happy and productive. There are many different aspects of managing an organization, and the skills required vary depending on the type of organizational structure. However, there are a few key principles that all managers should remember.


First and foremost, a good manager must be able to assess and understand their situation and what needs to be done to improve it. They must also have strong communication skills and the ability to share information with their team members effectively. Finally, a good manager must always keep track of their performance to ensure continual improvement.


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Shellye Archambeau is determined to help you with all possible strategies to climb the ladder of success. She values your feedback. Do mention them in the comment section below.

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