Marketing, leaderships, resources

Question 1

Tasks of managers:

Answer 1

Setting objectives and planning
Organising a group
Motivating and communicating
Measuring performance
Developing people

Question 2

Senior Management

Answer 2

E.g. Board of Directors
Set corporate objectives & strategic direction
Board is responsible to shareholders; led by the CEO

Question 3

Middle Management

Answer 3

Accountable to senior management
Run business functions and departments

Question 4

Junior Management

Answer 4

Supervisory role, accountable to middle management
Monitor & control day-to-day tasks, and manage teams of workers

Question 5

Tannenbaum and Schmidt Continuum of Leadership

Question 6

What are opportunity costs?

Answer 6

the cost of missing out on the next best alternative. In other words, opportunity cost represents the benefits that could have been gained by taking a different decision.

measures the cost of a choice made in terms of the next best alternative foregone or sacrificed.

Question 8

Examples of Opportunity Cost in the Business & Economic Environment

Answer 8

Work-leisure choices

The opportunity cost of deciding not to work an extra ten hours a week is the lost wages given up.

Government spending priorities

The opportunity cost of the government spending an extra £10 billion on investment in National Health Service might be that £10 billion less is available for spending on education or defence equipment.

Investing today for consumption tomorrow

The opportunity cost of an economy investing resources in new capital goods is the production of consumer goods given up for today.

Use of scarce farming land

The opportunity cost of using farmland to grow wheat for bio-fuel means that there is less wheat available for food production, causing food prices to rise

Trade-offs

A trade-off arises where having more of one thing potentially results in having less of another. The table below lists some examples of how trade-offs often arise in business - as a result of resource scarcity.

Question 9

Trade of grid in photos

Question 10

Business Objectives / Budgets

Answer 10

Set the scene for how decisions are made
A culture of strong budgetary control should encourage more data & evidence-driven decisions

Question 11

Organisational Structure - Who Makes the Decisions?

Answer 11

Who has authority to take decisions?
Are employees to empowered to take decisions to deliver more responsive customer service
Is decision-making centralised or decentralised?

Question 12

Attitude to risk

Answer 12

Close link to business culture
Is risk-taking encouraged?
What are the penalties for poor decisions?

Question 13

Availability & Reliability of Data

Answer 13

Is the data available to support a scientific approach?
Are management comfortable with using scientific methods? Do they have the right skills and experience?

Question 14

External environment

Answer 14

How fast is the external environment changing?
Do the uncertainties in the external environment make scientific approaches less reliable?

Question 15

These are influences of business decisions !

Question 16

What is Scientific Decision Making?

Answer 16

All business decisions involve some uncertainty. However businesses and managers increasingly want to reduce that uncertainty and risk by applying logic to decision-making, supported by relevant data.

Question 17

Scientific decision-making involves the use of:

Answer 17

Data mining and big data to source relevant data to inform decisions
Application of software logic and predictive models to analyse scenarios
Forecasts to consider the possible implications of business decisions

Question 18

Decision tree model

Question 19

Investment appraisal

Question 20

Sales forecast

Question 21

sensitivity analysis

Question 22

Network analysis

Question 23

Reasons Why Scientific Decision Making is Becoming More Popular

Answer 23

More widespread availability of data
Greater sophistication of data analytics & skills / experience of data analysts
Management expectation that data will be used wherever possible, particularly where a decision is significant to the business

Question 24

Hunch and intuition d.making- intuition:

Answer 24

Intuition refers to the use of “gut feeling” to make decisions rather than rely on a more scientific approach using data and other quantitative evidence, supported by logical, rational decision-making models.

Question 25

The potential advantages of hunch and intuition in decision-making include:

Answer 25

Speed - decision-making can be instant, rather than waiting for the results of scientific data analysis! Based on personal experience: data isn't always reliable and a manager may feel more comfortable with the gut feeling if it seems to contradict the results suggested by data

Question 26

Extra notes on intuition:

Answer 26

Of course intuition and hunch is pretty unsuitable for certain business decisions, particularly those that involve a higher degree of risk for a business (e.g. a new product, takeover or other major investment). Often intuition and hunch are combined with scientific approaches to reach a sensible decision. A good example is investment appraisal. The scientific element involves identifying and quantifying the investment costs and returns. The intuition is based on determining the appropriate discount factors to apply and managerial judgement to interpret the results.

Question 27

What is a decision tree?

Answer 27

a mathematical model used to help managers make decisions. uses estimates and probabilities to calculate likely outcomes. A decision tree helps to decide whether the net gain from a decision is worthwhile.

Question 28

Tutor2U decision tree explanation

Question 29

What are stakeholders?

Answer 29

groups or individuals that are affected by and/or have an interest in the operations and objectives of the business

Question 30

Roles of stakeholders:

Question 31

Stakeholder mapping:

Answer 31

To manage its stakeholders well, a business effectively to make choices. It is very difficult to meet the needs of every stakeholder group and most decisions will end up being “win-lose”: i.e. supporting one stakeholder means another misses out. How should a business respond to variations in stakeholder power and influence?

Question 33

Stakeholder conflicts (in photos)

Question 34

Reminder: The Difference Between Stakeholders and Shareholders

Answer 34

A stakeholder is any individual or organisation who has a vested interest in the activities and decision making of a business. A shareholder is an owner of a company. So stakeholders include shareholders, but also a wider range of individuals and organisations.

Question 35

The stakeholder concept

Answer 35

argues that businesses should take account of its responsibilities to stakeholders rather than just focus on shareholders.

Question 36

Stakeholders:

Answer 36

Have an interest in the business – but do not own it •May work for (employees) or otherwise transact with the business

Question 37

Shareholder:

Answer 37

Own the business •May also work in the business •Benefit directly from increases in the value of the business

Question 38

The stakeholder concept:

Answer 38

In essence, the stakeholder concept argues that the purpose of a business is to create value for stakeholders not just shareholders. Business needs to consider customers, suppliers, employees, communities as well as shareholders. In order to succeed and be sustainable over time, business management must keep the interests of customers, suppliers, employees, communities and shareholders aligned and going in the same direction.

Question 39

The shareholder concept:

Answer 39

The shareholder concept approach argues that it is the primary responsibility of businesses to act in the interest of its owners - the shareholders. So, decisions should be taken based on the effect of those decisions on shareholders rather than the wider stakeholder groups.