3.2 Managers, leadership and decision making Flashcards
What is the difference between management and leadership?
Managing is telling people what to do and organising resources so they can do their jobs efficiently, managers make decisions on day to day work.
Leading is motivating people and inspiring them to work to a common goal, they provide direction for business and aim to innovate and improve, leaders often think about long-term plans.
What are the different types of leadership styles?
Autocratic, Paternalistic, Democratic and Laissez-faire.
Explain each leadership style.
Autocratic, leaders make decisions on their own, identify the objectives of business and exactly how they are to be achieved.
Paternalistic, softer form of autocratic, leader consults workers before making decisions then explains the decision to persuade them that decision is in their interest.
Democratic, leader encourages workforce to participate in D-M process, leader discusses issues with workers, delegate responsibility and listen to advice.
Laissez-faire, weak form of leadership, leader might offer employees coaching and support, rarely interfere in running of business.
Refer to Tannenbaum Schmidt continuum.
What are the effectiveness of the different styles of leadership/management?
Autocratic, useful when dealing with unskilled workers, requires lots of supervision and monitoring as workers cannot make their own decisions. This style can demotivate able and intelligent workers.
Paternalistic, believed workforce being involved is positive motivator.
Democratic, democratic leaders have to be good communicators, style shows lot of confidence in workforce leads to increased employee motivation, takes weight of D-M off leader.
Laissez-faire, hands off leadership only be appropriate for small highly motivated team of able workers.
What is the value of decision -making based on scientific decision making (data) and intuition?
Scientific decision-making is based on data, valuable as data has to be reliable and up-to-date.
Intuition, decisions based on hunch or gut instinct, sense of right decision based on past experiences, can be done quickly and doesn’t cost anything and risky as people can make mistakes.
Refer to Decision Tree.
What things should business have an understanding on when decision-making?
- risk, some decisions can be high risk but if successful can bring high rewards, business try and reduce risk by scientific decision-making.
- reward, managers expect decisions to bring rewards, these can be financial or beneficial in other ways.
- uncertainty, all bus decisions involve some degree of uncertainty as no one knows outcome of decision will be, scientific decision-making can reduce uncertainty but cannot predict anything.
- opportunity cost, benefit that is given up in order to do something else, cost of choice that has been made, puts value on businesses decision in terms what bus had to give up to make it.
What factors influence decision-making?
- mission
- objectives
- ethics
- external environment
- resource constraints
Why do businesses have to consider stakeholder needs when making decisions?
business needs to balance their decisions to keep all stakeholders happy, e.g. profit is important as employees can be paid well, suppliers have reliable business, shareholders receive good dividend payment. or cutting labour costs may satisfy shareholders but cause conflict with stakeholders.
Stakeholder examples?
- owners
- employees
- customers
- suppliers
- local community
- government
- creditors
Refer to Stakeholder Mapping.
What are stakeholder needs that overlap and can cause conflict? Examples?
Employees want decent wage, pleasant working conditions and promotions. Shareholders want high dividends and short term profit and high share price, so will want business to cut costs e.g. labour costs.
How do businesses manage relationships with different stakeholders?
Consulting with key stakeholders before any major decisions, as likely to feel valued if opinions are considered, if they have specialist knowledge will benefit business.
Good communication is vital in managing relationships with stakeholders.
Or focus on satisfying one stakeholder at expense of another.
