3.2 SECTION 3.2 – MANAGERS, LEADERSHIP AND DECISION MAKING Flashcards
(21 cards)
What do managers do
Setting objectives - targets for the organisation and its employees to achieve.
● Analysing data or information – in order to make decisions and review progress.
● Planning – Creating strategies to achieve the targets that have been set
● Leading staff – although there are different styles of leadership (see below)
● Making decisions – these can be corporate (the whole company) or functional (marketing, finance, HR or operations)
● Reviewing – whether decisions that have been taken have been successful
What are the 4 styles of management and explain them
AUTHORITARIAN (also called AUTOCRATIC) means that decision making powers are kept at the top of an organisation. There is little use of consultation or delegation.
Authoritarian leaders prefer a ‘Hard HR’ approach and favour McGregor’s ‘Theory X’.
DEMOCRATIC means that decision making powers are not kept at the top of an organisation. There is considerable use of consultation and delegation.
Democratic leaders prefer a ‘Soft HR’ approach and favour McGregor’s ‘Theory Y’.
PATERNALISTIC means that decision making powers are kept at the top of the organisation but decisions are intended to be in the best interests of the workforce. Decisions are likely to be explained, and consultation may take place, but delegation is unlikely.
LAISSEZ-FAIRE means that the leader has minimal input in the decision making process and leaves the running of the organisation to the employees.
THE TANNENBAUM SCHMIDT CONTINUUM shows
the relationship between the level of freedom given to employees in relation to decision making, and the level of authority retained by the manager.
What are the 5 Categories in THE TANNENBAUM SCHMIDT CONTINUUM
Tells
Makes decisions,
announces
Sells
Makes decisions,
explains
Consults Gets suggestions and makes them, then
decides
Shares Defines limits,
group decides
Delegates Subordinates function within defined limits
As the further you go down authority decrease area of freedom increases
INFLUENCES ON STYLE OF LEADERSHIP
The organisational culture and history of the business
● The type of workers employed by the business (how trained & skilled they are)
● The nature of work for the employees (simple & repetitive or creative & challenging)
● The personality, experiences and preferences of the leader(s)
● The time frame and situation (e.g. whether there is an emergency or crisis)
SCIENTIFIC DECISION MAKING
is the use of a formal procedure to ensure that decisions are reached in an objective manner. It attempts to eliminate hunch or bias by ensuring that decisions are based on factual, numerical evidence.
Advantages of
scientific decision making
Use of numerical evidence should reduce the risk of failure
Less danger of bad decisions being forced through by strong personalities.
Disadvantages of
scientific decision making
Can be slower and more expensive than intuitive decisions
May not be suitable for innovative new products where data cannot be obtained.
INTUITION means
basing decisions on ‘gut feeling’, or personal opinions, without carrying out detailed research.
Advantages of
intuitive decision making
Quicker and cheaper than scientific decision-making
More suitable for innovative new products where data cannot be obtained.
Disadvantages of
intuitive decision making
Lack of numerical evidence may increase the risk of failure
More danger of bad decisions being forced through by strong personalities.
OPPORTUNITY COST
means the next best alternative that is foregone as a result of a decision.
DECISION TREES
are one form of scientific decision making.
They are diagrams that set out the options available when making a decision plus the possible outcomes and the probabilities that those outcomes will occur.
Squares represent the decisions that can be chosen.
Circles are nodes showing the probability and financial results of success and failure
INFLUENCES ON DECISION MAKING
The mission and objectives of a business
● The external environment, including the amount of competition
● Resource constraints: financial resources, human resources, operational resources and marketing resources
● Ethical considerations
ETHICAL BEHAVIOUR
means doing what is morally right.
Advantages of ethical behaviour
● It can be used to attract customers
● It can be used to attract employees who prefer to work for an ethical organisation
● It can be used to attract shareholders who prefer to invest in an ethical organisation
● Environmental policies can decrease costs (e.g. less energy or other resources being consumed)
Disadvantages of ethical behaviour
● Ethical behaviour can increase business costs (e.g. fair treatment of employees, customers and suppliers)
● Higher costs may decrease profits
● Lower profits are unattractive to shareholders
● The initial cost of environmentally friendly equipment and vehicles can damage cash flow
STAKEHOLDERS
are groups or organisations that are affected by the performance of a business.
The main examples of stakeholders are
shareholders, employees, customers, suppliers, lenders and society.
STAKEHOLDER MAPPING
means analysing different groups of stakeholders in terms of their interest and power in order to decide how to respond to them.
