Managers can learn a great deal about leadership and how leaders can inspire others by examining leadership theories and observing leaders whom they admire. A useful place to start in understanding leadership is to notice how often people distinguish between leaders and managers. There is good reason for this. Generally, leaders are inspirational and charismatic, while managers are effective and productive. Leaders are people-focused, while managers are process- and outcomes-focused. Leaders generally empower, while managers generally control.

A leader inspires others to follow or to lead themselves. Leadership can be defined as the process of inspiring others to work hard to accomplish important tasks. There are two important aspects of this definition?'inspiring others to work' (employee orientation) and 'accomplish important tasks' (task/job orientation). Providing a vision, or a clear sense of the future, is an increasingly important part of effective leadership. Leadership vision was probablyalways important, but with increasing rates of change in organisations, it has become almost compulsory. Effective leadership requires vision that can be translated into reality.

It is the leaders of organisations who set the tone for ethical behaviour and leaders have a prime responsibility to behave ethically. Any lack of integrity by a leader tends to be magnified, because employees take their leaders as role models—so dishonest actions by a leader can rapidly spread a culture of dishonesty and deceit throughout an organisation. Fairness, integrity and openness are qualities which are valued in a leader. A leader who is trusted has far more influence over his/her staff than one whose motives are suspect.

Hitt et al. (351–355) identify three types of power that are normally associated with the position that the leader holds?legitimacy, rewards and coercion. The authors also identify two types of power which are a result of the personal characteristics of the leader?expertise and reference (or charisma). Other sources of power typically include information, resources (including funding) and control over the structure of the organisation. Each of these can also create a direct or indirect motivating force for complying with a leader's directives.

Empowerment is the process of instilling employees with the belief (and often the necessary personal skills to support that belief) that they can accomplish certain tasks and contribute significantly to the organisation or their environment. It is the keystone of many organisational development programs, such as quality management. Effective leaders empower by helping and facilitating employees to take actions and make decisions on their own. They encourage employees to develop their own competencies, take risks and be creative, but they provide support when problems are encountered.

Contingency leadership bears many similarities to contingency management with its underlying philosophy that certain activities or approaches may be required for certain situations. Contingency leadership recognises that organisations are not static entities and, in addition to planned change, unplanned change can rapidly and dramatically affect the most appropriate leadership style.

Abraham Zaleznik (1992) has drawn some interesting distinctions between leaders and managers. In his view, leaders have a high tolerance for chaos and lack of structure and have the capacity to wait before producing answers to problems. Managers, on the other hand, have a need for order and control and may try to solve problems before they have really understood their significance or their root causes.

Current trends in leadership theory focus on special leader-follower relationships and how leaders can inspire their followers in extraordinary ways. Hitt et al. discuss these trends in terms of charismatic, transformational and transactional leadership (see pages 390–395). Charismatic leadership creates a truly inspirational relationship between leader and followers. Transformational leadership articulates a vision and followers are inspired to make extraordinary efforts in support of innovation and large-scale change. Transactional leadership focuses on tasks, rewards, and structures to influence followers' behaviour.

Kouzes and Posner (2006) reject the idea that leadership is a rare characteristic possessed only by a small number of highly charismatic individuals. They believe that everyone can be a leader and that leadership is not measured by the characteristics of the individual, but by their achievements. This view is much more consistent with leadership behaviour theory.

Recent research suggests that a contingency approach best explains the circumstances under which transformational leadership will be most effective. Thus, organisations with few formal rules and procedures, in which individuals are not formally bound to the organisation provide both the best environment and the greatest need for transformational leadership to obtain commitment from workers. Of course, transformational leadership is easy in such situations because several of the obstacles to change are absent: there are few embedded rules and behaviours which have to be 'unfrozen' before change can occur. Not surprisingly, transformational behaviours are more frequently found in non-profit organisations, which are characterised by a clear vision and volunteer staff.

Women are seriously under-represented in senior management roles in most organisations. The main inhibitors of the promotion of women include traditional employment practices and attitudes; the networking patterns that work against women; and male-centred management styles. Research has found that many male-dominated organisations use transactional management styles, while women tend towards transformational styles (Maxwell et al 2007).