Leaders and managers are very similar in role responsibilities, yet have very subtle differences. Both roles are instrumental in building strong teams of employees and compliment each other as they work towards the same goals. There are a few notable differences, which can help to distinguish between a manager and a leader. Managers perform functions in organisations and hold a particular, formal, title and fulfill a role. They are responsible for the oversight of their staff and their performance and productivity. They can also be responsible for the company or branch budget and of the physical and financial resources. Some of the functions of management as stated by classical theorist Henri Fayol are planning, organising, leading, coordinating, controlling, staffing and monitoring. Planning is the function, which would involve setting objectives and goals. Organising would involve identifying and defining tasks and responsibilities then delegating where necessary. Leading would provide the inspiration and focus to see the task through to completion and coordinating would engage the manager in binding everything together within the activity. Controlling, staffing and monitoring of the tasks and activities would be carried out by means of giving orders, instructions and overseeing the whole project and its progress.
Leaders are more focused on what will happen in the future and tend to “look over the horizon”. They aim to influence and to guide others into pursuing particular objectives or visions of the future and to stimulate them into wanting to follow. Leadership is not necessarily related to hierarchical position either, as management tends to be. Informal leaders exist in all levels of an organisation.