3.2 - Managers, Leadership And Decision Making

Question 1

Define managers

Answer 1

1. Set objectives for their department
2. Analyse data and make decisions
3. Review the effectiveness of their decisions
4. Organise resources

Question 2

Define leaders

Answer 2

Motivate
Inspire

Question 3

What is the Blake Mouton Grid used for?

Answer 3

Lets managers assess their leadership style
Assesses managers on how much they care for their employees and production

Question 4

State and explain the 5 styles in the Blake Mouton Grid

Answer 4

1. Impoverished style - low concern for people and production, poor management and low levels of motivation
2. Produce/ perish style - authorian leads to neglect of workers needs resulting in demotivation and more staff turnover
3. Country club style - over concern of workers. Not very productive or motivating
4. Middle of the road - average concern and has mediocre results
5. Team style - ideal leadership style high concern for both people and production

Question 5

State and explain the 4 leadership styles

Answer 5

1. Autocratic - leader makes decisions on their own, identifies objectives and achieve them. Useful for unskilled workers and crisis management, can demotivate
2. Paternalistic - consults workers before decision making. Explains the decisions and persuades them to say it is in their interest, they get involves
3. Democratic - both workers snd leaders participate in decision making, discuss issues, listen to advice, confidence in workers increases motivation.
4. Laissez faire - leaders offer coaching and support but rarely interfere in the running of a business. This is a weak form of leaderships. Only appropriate for small, motivated workers

Question 6

Factors best for autocratic / authorial leadership

Answer 6

1. Urgent tasks
2. Unskilled workers
3. Recessions

Question 7

Factors best paternalistic leadership

Answer 7

Recessions

Question 8

Factors best for democratic leadership

Answer 8

1. Educated, small groups
2. Economy is growing
3. Increases competition

Question 9

Factors best for Laissez Faire leadership

Answer 9

Small group of motivated workers

Question 10

What is the Tannenbaum Schmidt Continuum used for?

Answer 10

To put leadership styles on a scale

Question 11

What are the seven types of management styles?

Answer 11

1. Tells - no involvement of employees
2. Sells - workforce don’t influence decision making
3. Suggests - outlines decisions helps to feel influencing
4. Consults - invites discussion, can modify decisions
5. Joins - manager makes final decision
6. Delegates - manager outlines a problem but sets constraints
7. Abdicates - responsibility lies on the workforce

Question 12

What is the scientific decision making process?

Answer 12

1. Set objectives
2. Collect data
3. Analyse data
4. Make process
5. Implement decision
6. Review decision

Question 13

What are the advantages and disadvantages of using the scientific decision making process?

Answer 13

Advantages - logical and structured
Disadvantages - costly and time consuming

Question 14

Define intuition

Answer 14

Making decisions on gut instinct

Question 15

What are the advantages and disadvantages of using the intuition decision making process?

Answer 15

Advantages - made quickly, good for new data
Disadvantages - risky can makes mistakes and can be irrational

Question 16

What are the 5 influences on decision making?

Answer 16

1. Mission - main purpose
2. Objectives - targets
3. Ethics - moral and social views
4. External environment - competition
5. Resource constraints

Question 17

Define opportunity cost and its influence on decision making

Answer 17

Benefit that is given up in order to do something else, cost of the choice that should made.
This puts a value on the product or decision on what they gave up
Managers compare opportunity costs when making decisions

Question 18

Risks in decision making

Answer 18

Some decisions are highly risky but if successful can bring high rewards.

Question 19

Rewards in decision making

Answer 19

Decisions bring out rewards
They can be financial or benefit in other ways such as huger productivity or lower staff turnover

Question 20

Uncertainty in decision making

Answer 20

Outcome of a decision

Question 21

What does making decisions mean in business?

Answer 21

Calculating;
1. Cost
2. Outcome
3. Probability

Question 22

Formula for expected value

Answer 22

EV = probability x pay - off
Probability of the outcome happening multiplied by the pay off the business is expected to get
(Two end values)

Question 23

Define net gain

Answer 23

Financial gain after initial costs of the decision is subtracted

Question 24

Formula for net gain

Answer 24

NG = EV - IC

Question 25

Define pay-off

Answer 25

Outcome of a successful decision

Question 26

What is the purpose of a decision tree

Answer 26

To show which course of action is best

Question 27

Explain how a decision tree works

Answer 27

1. Identify which courses of action are open for the business 2. Possible outcomes of the actions with probabilities 3. Calculate expected value and net gain 4. Choose the course of action which has the highest net gain - most worthwhile

Question 28

What are the advantages of decision trees?

Answer 28

1. Works out the probability and potential pay off - not vague 2. Good visual representation 3. Can compare option quantitatively and objectively 4. Useful for familiar situations

Question 29

What the disadvantages of decision trees?

Answer 29

1. Quantitative so not qualitative (employees opinions) 2. Could be inaccurate 3. Doesn’t consider short term solutions

Question 30

Define stakeholder

Answer 30

Everyone affected by a business

Question 31

Who are the internal stakeholders?

Answer 31

1. Owners - make profit if successful, shareholders are the owners - want high dividends and share prices 2. Employees - job security, wok conditions, promoting and wage

Question 32

Who are the external stakeholders?

Answer 32

1. Customers- high quality at low prices 2. Suppliers - sell raw material - affects their income and cash flow 3. Local community - local employment and sponsors 4. Government - more taxes for profits 5. Creditors - who the business pays e.g. banks

Question 33

Why do the needs of shareholders overlap and conflict

Answer 33

They have different objectives A business must therefore create a balance They sometimes have overlapping interests

Question 34

What are the 2 ways shareholders can be managed?

Answer 34

1. Consulting - before making major decisions helps them to feel valued for their opinions 2. Communicating - keeps employees informed about business changes and using social media to communicate with customers

Question 35

What is shareholder mapping?

Answer 35

It helps to manage stakeholders and consider their importance of power and interest over the business This determines how much communication and attention is needed Stakeholders with high levels of both power and interest are managed closely - satisfaction is vital

Question 36

Define stakeholder

Answer 36

An individual or organisation who is interested in the activities and decision making of a business

Question 37

Define opportunity cost

Answer 37

The Benefit forgone of the next best alternative as a result of a decision