3.2 Managers, Leadership, and Decision making

Question 1

Managers

Answer 1

Their role is to plan, organise, and coordinate people and resources to follow orders

Question 2

Leaders

Answer 2

Decide on a direction for the firm and inspire & motivate staff to achieve aims that are set
Managers have subordinate but leaders have followers

Question 3

Influences on management and leadership styles:

Answer 3

Company structure and the span of control
Particular situation
Organisational culture and structure
Nature of the tasks involved
Employees and their skills & abilities
Group size
Personalities and skills of managers and leaders
Time frame

Question 4

Theory X:

Answer 4

This is an authoritarian approach to leadership, which is adopted by those leaders who believe that workers dislike work and therefore need to be controlled to improve their performance. They tell them what to do and supervise them doing it.

Theory X managers assume that workers:

Are lazy, dislike work and are motivated by money
Need to be supervised and controlled or they will underperform
Have no wish or ability to help make decisions or take on responsibility
Aren’t interested in the needs of the organisation and lack ambition
This can be useful in a crisis or where there are constantly changing workforces and workers need clear instructions and supervision

Question 5

Theory Y:

Answer 5

This is an approach to leadership that assumes that workers have both initiative and self-control, which can be used to achieve the goals of a business. Consequently, the role of management is to maximise the commitment of the workers.

Theory Y managers assume that workers:

Have many different needs, enjoy work, and seek satisfaction from it
Will organise themselves and take responsibility if they are trusted to do so
Think that poor performance is due to boring and monotonous work and poor management
Wish to, and should, contribute to decisions

Question 6

Authoritarian Leadership

Answer 6

Autocratic leaders hold onto as much power and decision-making as possible
Focus of power is with the manager
Communication is top-down & one-way
Formal systems of command & control
Minimal consultation
Use of rewards & penalties
Very little delegation
McGregor Theory X approach
Most likely to be used when subordinates are unskilled, not trusted and their ideas are not valued

Question 7

Democratic leadership

Answer 7

Focus of power is more with the group as a whole
Leadership functions are shared within the group
Employees have greater involvement in decision-making – but potentially this slows-down decision-making
Emphasis on delegation and consultation – but the leader still has the final say
Perhaps the most popular leadership style because of the positive emotional connotations of acting democratically
A potential trade-off between speed of decision-making and better motivation and morale?
Likely to be most effective when used with skilled, free-thinking and experienced subordinates

Question 8

Paternalistic Leadership

Answer 8

Leader decides what is best for employees
Links with Mayo – addressing employee needs
Akin to a parent/child relationship – where the leader is seen as a “father-figure”
Still little delegation
A softer form of authoritarian leadership, which often results in better employee motivation and lower staff turnover
Typical paternalistic leader explains the specific reason as to why he has taken certain actions

Question 9

Laissez-faire Leadership

Answer 9

Laissez-faire means to “leave alone”
Leader has little input into day-to-day decision-making
Conscious decision to delegate power
Managers / employees have freedom to do what they think is best
Often criticised for resulting in poor role definition for managers
Effective when staff are ready and willing to take on responsibility, they are motivated, and can be trusted to do their jobs
Importantly, laissez-faire is not the same as abdication

Question 10

Scientific decision making

Answer 10

Provides a clear sense of direction for all involved in the business
Decisions are made and based on business logic
It is flexible – at any stage in making a decision, it can be reviewed and changed if needed

Question 11

Intuition

Answer 11

The ability to understand something without the need for conscious reasoning; similar to a ‘hunch’
Making decisions with a lack of evidence to prove it is the right thing to do
This would be appropriate when a quick decision is necessary as it provides quick results when under a time scale
It is mainly used by smaller businesses

Question 12

Expected Value

Answer 12

the financial value of an outcome.
= the estimated financial effect x its probability

Question 13

Net Gain

Answer 13

the value to be gained from taking a decision.
= the expected value of each outcome – the costs associated with the decision.

Question 14

Advantages of decision trees:

Answer 14

Gives you a decision
Evidence to gain a source of finance
Set out logically
Easy to understand and results are tangible
Likely costs considered as well as benefits
Assesses risks
Potential options and choices are considered at the same time – direct comparison

Question 15

Disadvantages of decision trees

Answer 15

Always probe to arrow
Calculating probability can be rad
Could be inaccurate or unreliable as only estimates
Doesn’t necessarily reduce the amount of risk
Prone to bias
Uses quantitative data only – ignores qualitative aspects such as effects on employee motivation and brand image