Stonehouse et al. (2004)

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HRM

Managers plan, organise, direct, budget, maintain. Their activities are closely related to structure and systems of the organisation

Leaders focus on strategic development and the transformation of an organisation. They look to the future and move the people and the firm towards a vision.

Leadership has emerged in the knowledge era. The manager was in control in the industrial period, as this involved manufacturing and producing in a stable environment. the knowledge era reflects the turbulence and complexity of the business world, which requires constant learning and innovation, and is more focused on empowerment and the customer.

Leaders are "change agents who transform organisations and develop future leaders through coaching and knowledge sharing"

Senge (1990) argues that leaders in a learning organisation are designers (of a vision), teachers (of people) and stewards (developing the people and the organisation).

Culture

Leadership qualities reflect the national culture and as cultures evolve, so does the requirements for what defines a great leader.

Leaders need to recognise that cultures even within their firms vary at every level. It is their job to create a cohesive culture, where everyone is working towards the same goal with the same attitude. They need to help "unfreeze" the undesirable culture, introduce the new one and then "refreeze" the new culture once it has been achieved.

The best way for a leader to help induce a change in culture is to lead by example, to initiate reward systems which support the new culture, and to create myths and stories to emphasise desired values.

Strategic HRM

Problems