Managers, leadership, and decision making 3.2 Flashcards
(19 cards)
Leadership Definition
Leadership is the ability to influence, guide, and motivate individuals or groups towards achieving common goals or objectives. It involves setting a vision, making decisions and inspiring others to work together effectively to achieve desired outcomes
Management Definition
Process of planning, organising, leading, and controlling resources within an organisation to achieve specific goals and objectives
Types of leaderships Autocratic, Democratic, Paternalistic, Laissez-faire
Autocratic leadership - Managerial style where the leader makes decisions unilaterally, without consulting employees. It focuses on control, authority and discipline with minimal employee input
Pro - Efficient decision making as no time is wasted, clear expectations of the employees, string control useful in high-risk environments
Con - Limited innovation, high staff turnover, low motivation as staff may feel unvalued
Democratic leadership - Leader involves employees in decision-making, encourages participation and promotes teamwork and communication
Pro - higher motivation and morale, more ideas and creativity, better team relationships
Con - Slower decision making due to consultations, not effective in a time of crisis, may cause conflict if opinions clash or the responsibilities are unclear
Paternalistic leadership - Leader makes decisions in best interest of employees, like a parent figure, while still maintaining authority. Employee welfare is a priority however the final decision rests with the leader
Pro - High loyalty and trust, low staff turnover, clear decisions made
Con - Limited employee input, dependency, can lead to resentment towards the leader
Laissez-faire - Employees are given the complete freedom to make decisions and age their own work with very little supervision or direction. Employees are trusted to be self-motivated, highly skilled and experienced. Minimal input from the leader
Pro - Reduce in micromanagement leading to greater job satisfaction, high motivation and creativity, independence
Con - Low accountability causing the work quality to suffer, inconsistent results, lack of direction causing confusion, possibility for low productivity
Tannenbaum Schmidt Continuum
Is a model that describes the range of leadership styles from autocratic to democratic. It shows how leaders can vary their approach depending on the situation, the task at hand, and the maturity of their team. It ranges from autocratic to democratic leadership.
Autocratic (Leader-centered) - The leader makes the decisions without consulting the team, suitable for situations where quick decisions are required, crisis management, or when the team lacks experience, highly directive
Telling (Leader decides) - The leader still makes decisions but provide some information to the team, limited consultation, used in situations where the leader needs to maintain control but can provide some direction
Selling (Leader explains) - The leader makes decisions but takes time to explain to the team, some interaction with the teams however final decision lies with the leader, helps gain support from team
Consulting (Leader asks for input) - The leader asks the team for input but ultimately makes the final decision, shows more trust within the team, suitable when input is needed but the leaders retain control
Joining (Team-centered) - Leader makes decisions collaboratively with the team, team members actively involved, more democratic and fosters collaborative environment
Democratic (Team decides) - Team makes decision without the leader’s direct involvement, leader is more of a facilitator than a decision-maker, approach used when the team is capable and experienced enough to make informed decisions
Difference between leadership and management
Leadership is about inspiring and motivating people towards a shared vision. Leaders focus on change, innovation, and long-term goals whereas management is about organising and controlling resources to ensure that short-term objectives are met efficiently. Managers focus on structure, planning and processes, ensuring day-to-day operations run smoothly and targets are achieved
Scientific decision making definition
Logical and data driven approach to making business decisions. It involves using facts, data, and evidence (such as market research or financial analysis) to make informed choices, rather than relying on intuition
Pro - Reduces risks, improves accuracy, accountability by providing clear rational decisions, consistency
Con - Time consuming as you have to analyse large amounts of data, costly, possibility for the data being outdated or inaccurate
Intuitive decision making
refers to the making of decisions based on a gut feeling or instinct rather than using data or systematic process. It relies on the experience, knowledge, and judgement of the decision-maker
Pro - Decisions made quicker without analyzing a lot of data, Decisions made are often experienced based making use of industry knowledge, Flexible as allows for adaptations under unexpected situations
Con - Risk of bias as the decisions made may be based on personal feelings and not facts, Lack of evidence as its hard to justify decisions to others e.g stakeholders, inconsistent as it may lead to poor outcomes if experience is limited
Decision Trees
Diagram used to help make decisions by showing different options, their possible outcomes, probabilities, and the expected final results. It is a quantitative
decision-making tool that helps a business assess risk and compare options. Each branch shows a decision or chance event, leading to different outcomes
Entrepreneur Definition
Someone who takes a financial and personal risk of starting and running a business, often by organising resources, innovating, and making key decisions to achieve business success
Rewards - Profit, recognition, growth, independence, satisfaction,
Risks of being and Entrepreneur
Opportunity costs - Benefit lost from the next best alternative when a decision is made E.G. If a business had £10000 to either buy a new machine or spend on marketing, and it chooses the machine, the opportunity cost is the potential sales increase that might have come from marketing
Uncertainty - When the outcome of a decision is unknown due to factors outside the business’s control E.G. Changes in the economy, consumer trends, competitor actions are government policies, launching a new product in relation to demand and costs
Mission statement
Short statement that outlines a business’s overall purpose and core values explaining why the business exists
It is aimed to help motivate staff and allow customer and investors to understand the business’s objectives
Influences on decision making: Objectives, Ethics, External environment e.g. competition, resource constraints
Ethics- Ethical frameworks such as honesty, fairness and respect help businesses establish clear standards for behaviour which helps build trust with customers, investors and the public. This allows the business to also build a good reputation leading to customer loyalty and long-term success, while unethical behaviour can lead to scandals and loss of business
When a business is ethical it creates a positive working environment keeping employee morale high
Competition- Analyse different pricing strategies and offer discounts, bundles or loyalty programmes to attract and retain customers. Competition also drives innovation and development of new products. Businesses will invest in strong Marketing and branding to achieve brand differentiation and customer engagement
Environment- Government sets environmental laws like emission limits or waste disposal rules and businesses are obligated to follow these rules to avoid fines, legal issues or being shut down.
Many companies have sustainability goals and adopt green policies like using renewable energy, reducing carbon footprints and creating eco friendly products
BP Example
BP (British Petroleum) greenwashing accusations - BP tried to rebrand itself as “Beyond Petroleum” and invested in renewable energy, but critics argued that these investments are small compared to the heavy spending on fossil fuels.
In 2020, BP announced their plans to become net zero by 2050 and pledged to cut oil and gas production by 40% by 2030. However, by 2023, it had softened these targets, causing environmental groups and the public to question their sincerity. BP faces constant pressure from activists, shareholders and the government to do more to tackle climate change. Failing to act on environmental issues only caused reputational damage and financial consequences for the business
Government
Government- Regulations and legislation: Health and safety laws, Employment laws like minimum wage, anti-discrimination, working hours, consumer protection laws
Tax policies - A tax cut might encourage a business to expand or hire more staff and an increase in national insurance could make employers rethink staffing costs
Grants and subsidies - Government provides financial incentives to support certain industries e.g. Uk’s Clean Growth Strategy supports companies transitioning to low carbon solutions
Trade policy - Post-brexit trade deals and imports/exports heavily impacted
Monetary and fiscal policy - Government spending decisions made by bank of england (interest rates, inflation control) influence broader economy which affects consumers spending, borrowing and investment
Consumers
Demand drives supply E.G. Uk has seen a surge in plant-based diets. In response brands like Greggs launched the vegan sausage roll
Online reviews and social media
Price sensitivity - Supermarkets like Aldi and Lidl gained market share by offering cheaper alternatives, pushing big players like Tesco and Asda to price match and introduce value lines
Stakeholder definition
Any individual or group that has an interest in or is affected by the activities of a business
Internal stakeholders - Owners, Employees, Managers
External stakeholders - Competitors, Suppliers, Customers, Government, Local community, pressure groups
Pressure Groups
Organisations that influence a business or government decision to achieve a specific cause or interest using tactics such as protesting, petitions, media campaigns and lobbying
Stakeholder mapping
Tool used to identify and analyse the different stakeholders in a business, based on their level of interest in the business and their power of influence over the business’s decisions
Two axes indicating power(high to low) - how much influence a stakeholder has in the business’s activities and Interest(high to low) - how much interest a stakeholder has in the business’s activities
High power, High interest (manage closely) - These stakeholders need to be actively managed as they have a lot of influence and deeply care about the business e.g investors and customers
High power, low interest (keep satisfies) - have power but not have daily interest in operations e.g government, high level suppliers
Low power, high interest (keep informed) - Have interest but little power, They are kept updated e.g. employees and local community
Low power, Low interest (Monitor) - Minimal influence and interest e.g. distant suppliers and general public
Stakeholder conflict
Occurs when different stakeholders have competing interests or priorities, making it difficult for the business to satisfy everyone at the same time.
Businesses must balance stakeholders to maintain good relationships and avoid damage to their reputation or operations
Shareholders vs Employees
Shareholders may want higher profits which could mean the business leads to cut costs however, employees may want higher wages or better working conditions which increases costs
Customers vs suppliers
Customers want low prices and high quality however suppliers want to charge more to protect their profit margins
Business vs local community
Business may want to expand operations however the local community might oppose it due to noise, pollution or traffic
