Section 2 - Managers, leadership and decision making ✓

Why might a manager move from a 'Joins' to a 'Tells' leadership style?

- It is useful in situations where decisions need to be made quickly, such as in times of crisis. -Useful when dealing with an unskilled workforce.

What is a strategic, and a tactical decision?

-Strategic decision is one that is made in circumstances of uncertainty. -Tactical decision is deciding what to do in short term circumstances where a mistake is unlikely to have a major impact.

What aspects do managers analyse?

-The underlying conditions the business faces. -The performance of different staff. -How effectively objectives are being met.

What are the external factors which influence stakeholder relationships?

1 Market conditions 2 Stakeholder power - majority shareholders and customers given more focus then stakeholder with limited influence. 3 Government policy

List 5 key influences on decision making:

1- The business mission (decision must contribute towards). 2-Business objectives. 3-Ethics. 4-The external environment, including competition. 5-Resource constraints.

Give 5 examples of external stakeholders :

External stakeholders relate to people outside of the business : 1- Customers 2-Suppliers 3-The local community 4-The government (tax) 5- Creditors (those who the business owes money to, eg a bank.)

What is 1,1 on Blake's grid?

Impoverished management - Boss has neither concern for the staff nor the performance.

Define Leadership :

Means taking the initiative to set clear objectives and to guide/motivate staff towards their achievement.

How can a business manage and ensure that good relationships are kept with its stakeholders?

One way of managing relationships is by consulting key stakeholders before making any major decisions. Stakeholders will feel more valued if their opinions are considered, and the business can possibly benefit from their specialist knowledge. Good communication is vital - eg keeping employees informed about any changes to the business will make them feel included. COMMUNICATION + CONSULTATION

What are 4 key decision making factors?

Risk, Reward, Uncertainty and Opportunity cost

Advantages of intuitive decision making :

-Decisions can be made quickly as time isn't spent collecting and analysing data. If the situation is new or unfamiliar data might not be helpful. -Some managers have good intuition and can sense when a decision is the right one based on past experience. When their intuition is right it can lead to great business decisions.

Give examples of two types of opportunity cost for a new business start-up :

-Dont tie up too much capital in stock as this cash could be used productively elsewhere in the business. -Dont overstretch yourself as good decisions take time. -Take care with every decision that uses up cash.

Advantages and disadvantages of Democratic leadership style?

Adv- Can raise the motivation of the workforce leading to increased productivity. Disadv- Can slow the decision making process

What is 9,1 on Blake's grid?

Authority/Obedience - Boss has a fanatical drive to succeed but on the their own terms. Staff are truly only 'human resources'. Successful in the short term but staff likely to leave in the long term due to lack of motivation.

Advantages of scientific decision making :

Making decisions based on data reduces the risk of making expensive mistakes. It is a logical and structured approach which can be adapted if necessary. Can help to reduce uncertainty.

Who are stakeholders?

Stakeholders are groups or individuals who have an interest in a business. Internal stakeholders;employees, shareholders and managers. External stakeholders;suppliers, customers,local community.

What is 9,9 on Blake's grid?

Team management - The boss shows high concern for both performance and people. This includes showing interest in staff with belief in the synergy implied by successful teamwork.

What is opportunity cost?

The cost of giving up the next best alternative when making a decision.

What are the key aspects of the Paternalistic leadership style?

'Fatherly '. This type of manager believes that employees need direction but thinks it is important that they are supported and cared for properly. May be consultation to find out view of employees, but final decisions are made by the 'boss'.

What are the key aspects of Laissez-faire leadership style?

'let it be' , occurs when leaders are too lazy or busy that they don't take the time to ensure that junior staff know what to do or how to do it. This style of leadership is suitable for a small, highly skilled and motivated workforce.

Disadvantages of scientific decision making :

-Can be costly and time consuming because it involves collecting and analysing a lot of data. -It can be argued that it takes the 'human element' away from decision making so may be less creative than intuition. -You need to ensure that the data is reliable, up-to-date data. Decisions based on biased or out-of-date data will be unreliable.

Disadvantages of intuitive decision making :

-It is risky to rely on intuition all the time as people can make mistakes. -Decisions made using gut instinct can be irrational or not based on logical reasons.

The role of managers includes ......

-Setting objectives -Analyzing -Leading -Making decisions -Reviewing

What is 5,5 on Blake's grid?

Middle of the road - Boss shows a decent, honest attempt to get the best of both worlds, but struggling to succeed at either. Leads to just satisfactory performance.

What are the internal factors which influence stakeholder relationships?

1 Management and leadership- how managers view the stakeholders. 2 Objectives of the business. 3 Size/ownership.

Describe the six stage model that shows how the scientific decision making process works :

1) Set objectives 2)Collect data 3)Analyse data 4)Make the decision 5)Implement the decision 6)Review the decision If you review the decision and it isn't working you can go back to step 1.

What are the external influences on management and leadership styles?

1- In a recession, a business needs a strong leader to guide it through the difficult economic times therefore authoritarian is more suitable. 2- When the economy is growing, managers don't always need such as strong leadership approach. 3)Increased competition requires more democratic leaders who can motivate their employees to adapt to change or expansion.

What are the advantages of using decision trees?

1- They set out problems clearly and encourage a logical approach, 2- They allow for uncertainty, helping managers make carefully informed decisions.

What are the Internal influences on management and leadership styles?

1- Urgent tasks may need different leadership than routine tasks, eg an unexpected large order coming in may need an authoritarian leader to tell workers what to do and how to do it. 2- A large, unskilled workforce suits authoritarian leadership, whereas a small educated workforce suits democratic.

How to solve a decision tree :

1-Add info 2-Multiply each financial benefit by its probability for each outcome and add them together. 3-Subtract initial cost to get net gain.

What are the disadvantages of using decision trees?

1-The probabilities are often estimated and can therefore be inaccurate. 2-They do not consider qualitative information.

Advantages and Disadvantages of Autocratic leadership style?

Adv - focused on getting the task done, and high levels of control suitable for unskilled workforce. Speeds up the decision making process. Disadv- Possible low motivation of workforce, no opportunities to collect valuable ideas and opinions of workforce.

What is a supply chain?

All the contractors , sub-contractors and delivery businesses involved in getting supplies/components to your factory/business.

What are the key aspects of Autocratic leadership style?

Autocratic managers are authoritarian, they tell employees what to do and don't listen to any suggestions they may have. Tend to use one-way, top-down communication.

What is stakeholder mapping?

Carried out primarily to identify which stakeholders matter the most to a company. Looks at stakeholder interest and stakeholder power.

What is 1,9 on Blake's grid?

Country club management - The boss shows high concern for staff but low concern for performance. Therefore staff can easily take advantage of the situation and there is likely to be poor productivity.

What are the key aspects of Democratic leadership style?

Democratic leaders like to involve their workforce in the decision making process , they tend to listen to employees' ideas and ensure people contribute to the discussion. They regularly delegate decision making power to more junior staff.

Give 2 examples of internal stakeholders :

Internal stakeholders are people inside the business : 1- Owners / shareholders 2-Employees

What is Blake's Grid?

Looks at two leadership behaviours: concern for people, and concern for performance.

Define Management :

Management means organizing and galvanizing staff to implement the strategies needed to achieve the objectives.

What are the two types of decision making?

Scientific and intuition

What is the Tannenbaum Schmidt continuum?

Tells, sells, consults, delegates. The Tannenbaum and Schmidt Continuum recognises that the chosen leadership style depends on a variety of factors, including the leader's personality, the perceived qualities of subordinates.