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AQA A-level Business > 3.2 Mangers, leadership and decision making > Flashcards

3.2 Mangers, leadership and decision making Flashcards

1
Q

Role of Managers

A

Setting objectives

Analyse & review performance

Leading

Making decisions

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2
Q

Levels of management - SENIOR MANAGEMENT

A

E.g. Board of Directors

Set corporate objectives & strategic direction

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3
Q

Levels of management - MIDDLE MANAGEMENT

A

Accountable to senior management

Run business functions and departments

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4
Q

Levels of management - JUNIOR MANAGEMENT

A

Supervisory role, accountable to middle management

Monitor & control day-to-day tasks, and manage teams of workers

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5
Q

Leadership styles - AUTOCRATIC

A

Authoritarian leadership

Assumes info and decision making are best kept at top management of organisation

Characterised by:
- 1 one way communication
- minimal delegation or decentralisation
- close supervision of employees

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6
Q

Advantages of autocratic

A

Quick decision-making especially in stress-filled situations –> relieves pressure amongst employees

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7
Q

Disadvantages of autocratic

A

Discourages group input –> decreased motivation

Hurts morale and leads to resentment –> dissatisfaction

Ignores creative solutions and expertise from subordinates

Leader can feel overwhelmed

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8
Q

Leadership styles - DEMOCRATIC

A

Decisions agreed by majority

Characterised by:
-Collaboration –> employees share ideas & opinions
-employee engagement
- increased creativity

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9
Q

Advantages of democratic

A

Greater innovation –> creativity/ideas

Group member commitment –> job satisfaction

High labour productivity, increased motivation

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10
Q

Disadvantages of democratic

A

Poor decisions by unskilled employees

Slow decision making

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11
Q

Leadership styles - LAISSEZ-FAIRE

A

‘Let it be’

Characterised by:
- Hands-off approach
- Decisions are left to employees

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12
Q

Advantages of laissez faire

A

Encourages personal growth –> facilitates employee growth and development –> increased motivation

Encourages innovation –> greater employee freedom so creativity

Faster decision-making –> no micromanagement, employees have autonomy to go forward with decisions w/o approval

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13
Q

Disadvantages of Laissez-faire

A

Organisation lacks sense of direction

Leaders don’t take accountability –> avoid responsibility

Leaders have poor involvement within the group –> lack of cohesiveness

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14
Q

Stages of Tannenbaum Schmidt Continuum

A

Four Main Styles of Leadership:

1) Tell - leader identifies problems, makes decisions & announces it to subordinates –> expects implementation

2) Sells - leader identifies problems, still makes decision but attempts to overcome resistance through discussion & persuasion

3) Consults - leader identifies problem, presents to subordinates, listens to advice & suggestions before making a decision

4) Joins - leader defines the problem, but subordinates find solutions and decisions within limits of defined superior

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15
Q

Tannenbaum Schmidt Continuum - LEFT & RIGHT SIDES EXPLAINED

A

Left = Manager centred leadership, autocratic, degree of authority

Right = Subordinate centred leadership, democratic, area of freedom

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16
Q

Advantages of Tannenbaum Schmidt Continuum

A

Gives multiple ways with how to involve and interact with your team, allowing you to become more democratic

Provides an incremental way to increase or reduce your team’s involvement in decision making.

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17
Q

Disadvantages of Tannenbaum Schmidt Continuum

A

No ‘correct’ way of managing groups –> ambiguity for the user of the model

Only examines the process of giving a task to your team, not what happens next- DOESNT show full picture

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18
Q

Blake Mouton Grid

A

Top Left - Country Club

Bottom Left - Impoverished

Top Right - Team

Bottom Right - Produce/Perish

Middle - Middle of Road

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19
Q

Blake Mouton Grid - Axis

A

Y axis - People

X axis - Task

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20
Q

Blake Mouton Grid - explained

A

Country Club - high people & low task, concerned about needs and feelings of others, work environment is likely to be relaxed but work may suffer due to lack of control

Impoverished - low people & low task, ineffective leader, work and people are both neglected

Team - high people & high task, employees are motivated and needs are met

Produce/Perish - high task & low people, v authoritarian, tasks are always done matter the implications for employees

Middle - some focus on task and people, average performance

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21
Q

Advantages of Blake Mouton Grid

A

Used by managers to increase productivity

Helps leaders understand their natural leadership style –> and allows the necessary changes to be made if needed

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22
Q

Disadvantages of Blake Mouton Grid

A

The model is overly simplistic

Too focussed on the leader –> doesn’t pay attention to other factors e.g. development level of your team, the businesses culture etc.

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23
Q

Value of decision making
(risk, rewards, uncertainty, opportunity costs)

A

Risks - the potential that a decision will lead to a loss or an undesirable outcome

Rewards - potential profits from a decision, better recruitment, low costs, opening new markets etc.

Uncertainty - decision making without all the information about the potential risks.

Opportunity costs - represents the benefits that could have been gained by taking a different decision.

24
Q

Other types of decisions

A

Programmed - familiar routine decisions

Non-programmed - less structured –> require unique solutions

Tactical - short term, fewer resources involved, easier to reverse, junior management

Strategic - long term, large commitment of resources, difficult to reverse, senior management

25
Q

Decision Making - HUNCH & INTUITION

A

Managers rely on their instincts / gut feeling

26
Q

Advantages of hunch & intuition

A

Speedy –> decisions are instant, rather than waiting for the results of scientific data analysis

Based on personal experience: data isn’t always reliable –> manager may feel more comfortable with the gut feeling

27
Q

Disadvantages of hunch & intuition

A

Can be unsuitable for important decisions

May be too hasty, more susceptible to making the wrong decision

28
Q

Decision making - SCIENTIFIC

A

Based on quantitative data, uses a logical & rational approach

Linked to decision trees

29
Q

Decision trees

A

Estimates and probabilities to calculate likely outcomes

NET GAIN = EXPECTED VALUE - INITIAL COST

30
Q

How to calculate decision trees

A

1) Multiply probability by result (ending bit) on both high and low sales

2) Add the answers of both these together to find the expected value

3) Subtract this answer (expected value) from initial cost to find the net gain

4) DO THE SAME FOR OPTION 2

5) Compare both net gains and see which one is higher to find the better option

31
Q

Decision trees - What if both options’ net gains are negative?

A

‘Do nothing’

32
Q

Advantages of decision trees

A

More logical way, less rushed –> based on evidence

Potential options & choices are considered at the same time

Use of probabilities enables the “risk” of the options to be addressed

Easy to understand & tangible results

33
Q

Disadvantages of decision trees

A

Probabilities are just estimates – always prone to error

Uses quantitative data only – ignores qualitative data

34
Q

Influences on decision making - MISSION & OBJECTIVES

A

Mission - sets out broad goal/aim

Objectives - quantifiable and time-related targets

35
Q

Influences on decision making - ETHICS

A

Provides moral guidelines

Info spreads quickly –> potentially damages sales?

Businesses should consider ethical dimension as they should have genuine desire to operate ethically, while others wish to avoid any adverse publicity

36
Q

Influences on decision making - RISKS

A

If manager is taking a high risk (non-programmable) they may consider scientific decision making

Whereas low risk (programmable) may be done through intuition/hunch

37
Q

influences on decision making - EXTERNAL ENVIRONMENT + COMPETITION

A

Consists of:
- competition
- consumer incomes
- interest rates
- demographic factors
- environmental issues

38
Q

Influences on decision making - RESOURCE CONSTRAINTS

A

Managers need necessary resources to be available e.g. info, time raw materials & labour

However most managers don’t have all these resources available all the time –> so they have to satisfice ( make best possible decision with resources that are available)

39
Q

Stakeholders

A

A stakeholder is anyone that is interested and affected by the business

Internal - shareholders & owners, managers, employees

External - customers, suppliers, local community, pressure groups & government

40
Q

Stakeholders v Shareholders

A

Stakeholders - interest in the business but don’t own it

Shareholders - own the business, benefit directly from the business (dividends), expect a return on investment

41
Q

Stakeholder Needs

A

INTERNAL
Shareholders and owners: return on investment, profits & dividends, success + growth, proper running of the business

Managers/Employees: good salary, job security & satisfaction, promotion opportunities, motivation etc.

EXTERNAL
Customers: good quality and range of products at reasonable prices, good customer service

Suppliers: receive payments on time, regular orders

Local community: looking for employment

Pressure groups: compliance with local laws & regulations e.g. noise, pollution)

Government: create more jobs to raise more money from taxes, compliance with business legislation

42
Q

Stakeholder Mapping - POWER & INTEREST

A

High power, high interest - Key players, take notice of them and engage directly with them

High power, low interest - keep them satisfied

Low power, high interest - communicate regularly with them

Lower power, low interest - communicate only when necessary

43
Q

Overlap & conflict of stakeholder needs - EXPAND PRODUCTION

A

Employees - more jobs available, promotion, higher pay?

Customers - new products, lower prices maybe?

Shareholders - share price & long-term profits will increase BUT investment needed may cut short-term profits

Suppliers - larger/regular orders BUT expectation of reduced prices

44
Q

Overlap & conflict of stakeholder needs - CUT COSTS

A

Employees - more jobs may result if successful

Customers - lower prices maybe BUT quality will be bad

Shareholders - increased profits, dividends & share price BUT reduced quality can turn customers away resulting in reduced sales and profit

Supplier - business may seek alternative lower cost supplier

45
Q

Overlap & conflict of stakeholder needs - RAISE PRICES

A

Employees - increased wages, better working conditions BUT sales decline resulting in job losses

Customers - unaffordable products –> less value received

Shareholders - increase in profit, dividends & share price BUT adverse publicity if its an essential product

Suppliers - higher prices BUT orders may fall of price rises reduce demand significantly

46
Q

Overlap & conflict of stakeholder needs - LAUNCH NEW PRODUCTS

A

Employees - more jobs, higher pay, better working conditions if successful

Customers - better choice & improved products BUT increases in prices due to development costs

Shareholders - increased sales, prices, profits BUT initial costs of launch may reduce profits

Suppliers - increased orders BUT product may require different suppliers resulting in different loss of contract

47
Q

Overlap & conflict of stakeholder needs - USE OF TECHNOLOGY IN PRODUCTION

A

Employees - new higher paid jobs created to manage technology BUT loss of jobs

Customers - lower prices as tech is more efficient BUT standardised products may less likely meet individuals needs

Shareholders - higher long term profits BUT business may suffer due to job losses damaging share price

Suppliers - increased sales may result in larger orders

48
Q

Influence on the relationship with stakeholders - INTERNAL FACTORS

A

MANAGEMENT & LEADERSHIP STYLE –> autocratic/democratic & concern for people/production

OBJECTIVES –> growth, profits, ethical/social goals

SIZE & OWNERSHIP –> social enterprises, sole traders, PLCS

49
Q

Influence on the relationship with stakeholders - EXTERNAL FACTORS

A

MARKET CONDITIONS –> number and strength of competitors & sales levels and trends

STAKEHOLDER POWER –> majority shareholders & dominant customers

GOV POLICIES –> codes of conduct & laws

50
Q

Managing relationships with stakeholders - COMMUNICATION & CONSULTATION

A

Communication - exchange of info or ideas between two or more parties

Consultation - process by which one groups discover the views of another

51
Q

Managing relationship with stakeholders - ENGAGEMENT APPROACH

A

Partnership - high power, high interest stakeholders

Participation - high power, low interest stakeholders

Consultation - low-power, high interest stakeholders

Push communications - low power

Pull communications - lower interest stakeholders

52
Q

Managing stakeholder relationships - PARTNERSHIP

A

Decisions are taken jointly by management team & relevant stakeholders

Responsibility will be shared –> lots of two-way communication

53
Q

Managing stakeholder relationships - PARTICIPATION

A

Stakeholders will be apart of the team and relevant decision making

may have responsibility for part of the activity and may implement that part of the decision

likely to be engaged in two-way communication

54
Q

managing stakeholder relationships - CONSULTATION

A

stakeholders will be expected to respond to questions

still two-way communication but stakeholders will have limited power to influence decisions and subsequent actions

55
Q

managing stakeholder relationships - PUSH COMMUNICATIONS

A

One-way communication from the business to relevant stakeholders through emails, letters etc.

suited to stakeholders with low levels of interest

56
Q

managing stakeholder relationships - PULL COMMUNICATIONS

A

stakeholders choose if they want to engage and access communication with the business

appropriate for stakeholders with little power & interest

AQA A-level Business (10 decks)

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