3.2 Managers, Leadership And Decision Making

Question 1

Managers role

Answer 1

• organising, plan, communication ( limit risk )
• set objectives
• analyse data
• review
• LIMIT RISK

Question 2

Leaders role

Answer 2

• motivate employees
• entrepreneurial
• see opportunity
• RISK TAKING

Question 3

Authoritarian

Answer 3

• manager make all decision
• good for unskilled workers
• bad because demotivating

Question 4

Paternalistic

Answer 4

• business consult employees
• good as employee feel involved
• bad because long term create issue as is like autocratic

Question 5

Democratic

Answer 5

• manager give employee greater involvement
• good because motivation increase
• bad because slow decision making

Question 6

Laissez faire

Answer 6

• manager have no input in decision making
• good for highly skilled workers
• bad as a way for manager to shrink responsibility

Question 7

Theory X

Answer 7

• workers are lazy
• motivated by money
• autocratic
• not interested in business ( kotter resistance to change )

Question 8

Theory Y

Answer 8

• workers motivated by contributing
• enjoy working
• want to make decisions
• bad performance is due to boredom

Question 9

Tannenbaum and Schmidt continuum

Answer 9

• tells ( no input in decision making )
• sells ( decision is sold )
• suggest ( employee ask question and discuss )
• consult ( employee can tweak decision )
• join ( manager only explain issue and other come up with idea but manager has final say )
• delegate
• abdicate ( subordinate recognise problem and solve it )

Question 10

Scientific decision making

Answer 10

• use data to aid decision making
• good because it is a logical and rational process, key players will buy in with business
• bad because it is slow and expensive as more labour involved
• how trustworthy is data ?

Question 11

Intuitive decision making

Answer 11

• using a hunch to make decision making
• good because quicker decision making and good for experienced manager
• bad because hard to justify and risky as not based on data
• how quickly decision has to be made ?

Question 12

Risk

Answer 12

• when you can predict change of an outcome in the future
• employees leave, go strike, not training
• health and safety there could be a fire

Question 13

How to manage a risk

Answer 13

• using a business plan
• using market research
• training staff

Question 14

Uncertainty

Answer 14

• cannot predict the chance of an outcome in the future
• economy with interest rate and exchange rate
• competition with innovation, prices and advertising
• it is uncontrollable and unpredictable

Question 15

Opportunity cost

Answer 15

• sacrifice when an alternative is chosen
• e.g in finance using shares for finance will give up control in business, in hr training new hires off the job will increase the cost of training and decrease productivity
• but is hard to predict actual opportunity cost

Question 16

Expected value

Answer 16

Final payoff x probability

Question 17

Net gain

Answer 17

Expected value - cost

Question 18

Pro of decision tree

Answer 18

• logical approach
• include cost of each action
• good to use if you have experienced similar decisions in the past

Question 19

Con of decision tree

Answer 19

• not accounting qualitative data e.g impact on stakeholders
• only as good as predictions
• should not be used if it is a brand new decision as probability wont be accurate
• bad to use if affects long term should use something else also

Question 20

What are influences on decision making

Answer 20

• missions
• objective
• resources ( finance, staff, supplies, time )
• external environment ( things the business can’t control )

Question 22

Stakeholders

Answer 22

• people who have a interest or influence on business
• owner,employee, shareholders, supplier, customer, community
• high influence = keep satisfied
• high interest = keep informed