3.2 Managers, Leadership and decision making

Question 1

Leadership

Answer 1

Ability to influence and direct people in order to meet the goals of a group.

Question 2

Management

Answer 2

The process through which company resources are used and decisions made in order to meet the objectives of the firm.

Question 3

Leaders

Answer 3

People that can inspire and motivate people to meet objectives

Question 4

Managers

Answer 4

set objectives and decide how to go about achieving them.

Question 5

The roles of managers

Answer 5

1. setting objectives
2. analysing
   3.leading
3. making decisions
4. reviewing

Question 6

Leadership styles

Answer 6

1. Autocratic
2. Democratic
3. Laissez-Faire
4. Paternalistic
5. Style versatility

Question 7

Autocratic (authoritarian)

Answer 7

Leader makes decision without consultation.

Question 8

Democratic

Answer 8

Leader consults team but makes final decision themselves

Question 9

Laissez-Faire (to leave alone)

Answer 9

Leader allows team to make decisions.

Question 10

Paternalistic

Answer 10

Leader acts in fatherly way towards workforce and makes decisions based on needs of workforce as well as the business

Question 11

Style versatility

Answer 11

Leaders can adopt to any of the styles depending on the context

Question 12

Tannenbaum schmidt continuum

Answer 12

Leadership model based on a spectrum between manager centred and subordinate centred approaches.

Question 13

Trait theory

Answer 13

Some argue leaders or managers should have certain traits or characteristics that differentiate them from others.

Question 14

Behavioural theory

Answer 14

focuses on how the individual leader behaves and looks at the extent to which they have concern for subordinates compared to the concern for production.

Question 15

Influences on management and leadership styles

Answer 15

1-tradition of the business
2-type of labour force (skilled/unskilled)
3-nature of task and timescale
4-personality of manager/traits.

Question 16

opportunity cost

Answer 16

The cost of the next best alternative forgone. (cost of missing out) All firms should consider opportunity cost when making any important decision.

Question 17

The decision making process

Answer 17

1. setting objectives
2. gathering & interpreting info
3. selection, the chosen option
4. implementing the decision
5. Reviewing

Question 18

Programmed decisions

Answer 18

Decisions made on a daily basis, that the firm is familiar with little risk

Question 19

Non-programmed decisions

Answer 19

These deal w unique situations and require some thought and are of relatively high risk

Question 20

Tactical decisions

Answer 20

Short term targets easy to reverse and can be made by junior managers.

Question 21

Strategic decisions

Answer 21

Major long term decisions made by senior managers and require lots of resources and are hard to reverse.

Question 22

decision making based on data

Answer 22

known as scientific management/decision making and involves a logical and rational approach to making important decisions. Involves collecting as much data and research as possible, enhancing chance of success decreasing risk of failure.

Question 23

decision making based on intuition

Answer 23

Rely on instinct or intuition , appropriate when quick decisions need to be made or when the time nor money is available for collecting data or when relevant data is simply unavailable.

Question 24

Decision tree

Answer 24

simple,visual way of presenting the alternative course of action available when making a decision. Based on logic and probability.

Question 25

What do decision trees identify?

Answer 25

-when a decision has to be made

-choices available

-cost associated w each option

-possible outcomes related to each choice

-probability of each outcome occurring

-estimated financial result of each outcome

Question 26

formula for Estimated value (EV)

Answer 26

(p1 x outcome) +(p2 x outcome)

Question 27

formula for NET gain

Answer 27

EV - associated cost

Question 28

Values of decision trees

Answer 28

-it encourages logical & structured approach

-allows easy option comparison

-calculates estimated probability of each outcome

Question 29

Disadvantages of decision trees

Answer 29

-relies heavily on estimates (outcomes and probabilities)

-doesn’t take into account qualitative factors, only quantitative.

Question 30

Influences on decision making

Answer 30

1- opportunity cost
2-mission statement and objectives
3-ethics
4-the level of risk involved
5-external environment
6-rescource constraints

Question 31

Stakeholder

Answer 31

An individual/group within society that has an interest in a business.

Question 32

Examples of stakeholders

Answer 32

employees, suppliers,creditors, customers, shareholders, pressure groups, government, local community

Question 33

Internal stakeholders

Answer 33

work/operate within business such as employees

Question 34

external stakeholders

Answer 34

from outside the business such as the government

Question 35

primary stakeholders

Answer 35

directly impacted by a businesses decision e.g customers

Question 36

secondary stakeholders

Answer 36

indirectly affected by a businesses decision e.g community groups

Question 37

stakeholder mapping

Answer 37

For each significant decision a business makes, it can categorise stakeholders in one of the 4 quadrants so they can analyse their importance in terms of their power and level of interest.

Question 38

Quadrant A (minimal effort)

Answer 38

low level of interest in decision , low level of power. business can almost ignore them.

Question 39

Quadrant B (keep informed)

Answer 39

Low level of power, high interest in decision and business activities. For sake of their reputation and to create goodwill the firm will keep them informed of any progress.

Question 40

Quadrant C (keep satisfied)

Answer 40

low level of interest in actions of business but have high level of power, the managers will engage w them and may even consult them to keep them satisfied.

Question 41

Quadrant D (key players)

Answer 41

most powerful, most interested. Managers will prioritise and even make them part of decision making process to prevent them from taking action and keep them happy.

Question 42

Partnership (top of triangle)

Answer 42

These stakeholders are most influential, most powerful. Business will make them part of decision making process and implement the decision alongside them.

Question 43

participation (2nd from top of triangle)

Answer 43

These stakeholders have some power and influence , to make decision as easy as possible they will be invited into decision making process.

Question 44

Consultation (3rd from top)

Answer 44

these stakeholders may have some degree of interest and as a result the business will consult them at a low level to discuss issue and find out opinion.

Question 45

Push communication (4th from top)

Answer 45

stakeholders in this category have limited influence and the business may engage with them at a low level through emails. (e.g)

Question 46

Pull communication (bottom of triangle)

Answer 46

These stakeholders are low interest that the business will not engage with unless they have a specific request to give (low power).