3.2 - Role of managers Flashcards
What is a Manager?
Individual in charge of certain group of tasks or a certain subset of a company. A manager often has employees who report to him/her.
Top - Level Management
Senior-level executives of an organisation of those positions that hold the most responsibility e.g CEO
Directors : - finance
- marketing
- HR
- operations
Middle - Level Management
Report to top management and serve as the head of major departments and their specialised units.
Characteristics of middle-level management
- more visible to greater workforce than top management
- spend their time developing and implementing strategic action plans needed to achieve the organisational goals set by top management (branch management)
Low - Level Management
Work closely with the greater workforce and hold a much more interpersonal role than any of the other levels of management
What managers do…
- train their employees the correct way of doing the job
- pass along concerns and ideas to their manager
- organise ( meetings, rotas, data, finance )
- motivate and check upon employees
- check stock
- forward planning
The 5 roles of business managers
- setting objectives
- analysing data
- leading staff
- making decisions
- reviewing
What is setting objectives?
Managers need to set targets for the business to aim for (marketing, operations, finance, HR). They will need to explain how/why these objectives are set.
What is analysing data?
Managers need to collect and analyse relevant data (sale forecasts/figures, market trend data, cost data, staff performance data) to help decide on what targets should be, and how to reach them.
What is leading staff?
Managers need to ensure that staff are working with/in charge of are working as effectively as possible. They will need to motivate and guide staff through a wide variety of tasks/jobs.
What is making decisions?
The scale of decisions made will depend on their position within the business. Managers will need to explain how/why they have made these decisions to other stakeholders.
What is reviewing?
Managers will need to continue to collect info/data to allow them to review the quality of decisions that they have made. The reviewing process may result in changes e.g do the objectives need to be changed? Should different strategies be used? Do staff need more/different training?
Autocratic leadership
- manager(s) make all the decisions
- very little communication between leaders and employees, however orders are given
- tasks are clearly defined and allocated
- managers retains a great deal of power and decision making authority
- structured set of rewards as well as punishment
When would autocratic leadership be suitable?
- new, untrained staff
- limited time in which decisions must be made
- if manager(s) are able to give the right orders
- when managers are responsible for a large number of unskilled workers
Autocratic leadership disadvantages
- demotivating
- employees may become dependant on managers, discouraging idea generation
Paternalistic leadership
- largely autocratic but managers take the interests of the workforce into account in the decision making process
- managers regard the workforce as an extended family
- believe it is important to consider the social and leisure needs of staff as well as the working environment
Paternalistic leadership advantages
- staff feel protected and loyal to the organisation
- likely to reduce staff turnover
Paternalistic leadership disadvantages
- may discourage creativity from the workforce
- may not ensure the workforce are working to their full potential ( efficiency, productivity affected)
Democratic leadership
- encourages staff to be part of the decision making process and problem solving
- encourages team building and participation
- staff are better informed about their jobs
- commonly used in flatter organisational structures
Democratic leadership suitability
- leaders have good communication skills
- when there is a need/desire to increase motivation levels
Democratic leadership disadvantages
- increased length of decision making process
- time consuming for managers to listen to / gather ideas
- managers can pass on some of the decision making responsibility
Participative leadership
- leaders fully involve staff in the decision making
- employees feel involved in the decision making process
- resistance to change is less likely
Participative leadership benefits
- leaders utilise the creativity of subordinates
- increases number of ideas flow through business
- workers gain confidence and skill
Participative leadership drawbacks
- slower decision making process
- may cause inconsistencies
Laissez-faire leadership
- leaders have a relatively small say in the day to day running the business
- leaders allow workers to make the most of the decisions themselves
When would laissez-faire be suitable
- when staff are highly skilled, educated and experienced
- when staff are motivated and empowered
- when leaders want to show trust and respect employees
Laissez-faire drawbacks
- can lack co-ordination and direction
- may be open to abuse by employees
Manager - centred leadership to employee - centred leadership line
1 ) autocratic
2) paternalistic
3) democratic
4) participative
5) laissez-faire
Amount of control over decisions retained by leaders starts from…
1) autocratic
2) paternalistic
3) democratic
4) participative
5) laissez-faire
Task affects leadership style because…
A task may require an immediate response. If this is the case, a more authoritarian style may be appropriate.
The tradition of the organisation affects leadership style because…
There may be an internal culture which has led to the adoption of a particular leadership style
The type of labour force affects leadership style because…
A highly skilled workforce may be more productive when their opinions are sought and so a democratic approach may be appropriate
Group size affects leadership style because…
With a larger group, democratic leadership may lead to confusion
The leader’s personality affects leadership style because…
A particular leadership style may be more suited to a certain type of personality
The group personality affects leadership style because…
Some prefer to be directed rather than contribute. If this is the case then an autocratic style may be most appropriate
Situation affects leadership style because…
A ‘situational leader’ will adopt the most appropriate leadership style for the situation being forced
Environment affects leadership style because…
The environment in which the leader operates might determine which style of leadership is most appropriate
Theory X managers assume that workers … :
- dislike their work
- avoid responsibility and need constant direction
- must be controlled or forced to deliver work
- needs to be supervised at every step
- have no incentive or work ambition
- need to be enticed by rewards
Theory X managers assume that workers … :
- dislike their work
- avoid responsibility and need constant direction
- must be controlled or forced to deliver work
- needs to be supervised at every step
- have no incentive or work ambition
- need to be enticed by rewards
About Theory X Managers
They tend to assume their employees are lacking motivation causing a less of a high standard quality product in the outcome. To overcome this, managers often have to find ways to keep their staff motivated and to not dislike work. This can be done by rewarding them (financially and/or no-financial methods such as an award scheme or a praise) and even punishing them when they do a task wrong.
Management within a Theory X orgnanisation
There tends to be several tiers of managers and supervisors to oversee and direct workers. Authority is rarely delegated, and control remains firmly centralized. Managers are more authoritarian and actively intervene to get things done to ensure the product / service they are offering is to a high quality.
About Theory Y Managers
Have a collaborative and trust-based relationship between managers and their team members. They have greater responsibility, and managers encourage them to develop their skills and suggest improvements. When satisfactory work is completed then appraisals are regular but, unlike Theory X organisations, they are used to encourage open communication rather than control staff
Theory Y managers assume that workers…:
- happy to work on their own initiative
- solve problems creatively and imaginatively
- more involved in decision making
- self-motivated to complete their tasks
- view work as fulfilling and challenging
- seek and accept responsibility, and need a little direction
- enjoy taking ownership of their work
Management within a Theory Y organisation
It is becoming more popular
This reflects workers’ increasing desire for more meaningful careers that provide them with more than just a financial reward.
The shift away from autocratic styles…
- changes in society’s values
- better educated workforce
- focus on need for soft HR skills
- changing workplace organisation
- greater workforce legislation
- pressure for greater employee involvement
Blake and Mouton Managerial Grid advantages
- helps managers analyse their own leadership style
- by administering the questionnaire, managers can identify how they stand with respect to their concern for production and people
- can focus on reaching the ideal placement of a leader
Blake and Mouton Managerial Grid disadvantages
- model ignores the importance of internal and external limit, matter and scenario
- doesn’t cover some aspects of leadership that are also out there
- this ideal approach may not ne suitable to all circumstances
What does the Blake and Mouton Managerial Grid show?
It helps you think about your leadership style and its effects on your team’s productivity and motivation. By plotting “concern for results” against “concern for people”, the grid highlights how placing too much emphasis on one area at the expense of the other leads to poor results.
What is Tannenbaum & Schmidt’s Continuum of Leadership
It was published 1958, explaining the idea of managers giving their subordinates freedom to a certain extent and the problems in decision-making and pressures that may arise due to a certain amount of freedom a workforce may have. There is a relation between the level of freedom that managers chooses to give their team, and the level of authority the manager will have.
What does the Tannenaum & Schmidt’s Continuum of Leadership show?
Moving from left to right of the diagram i when the leader makes all the solo decisions, goal making and telling others what to do becomes less prominent in the workplace as the managers start to involve their subordinates until they effectively become self-managing
The four main styles of leadership (Tannenbaum & Schmidt)
- Tells
- Sells
- Consults
- Joins
What happens in ‘tells’ leadership (Tannenbaum & Schmidt)
Manager makes decision and tells staff about it; expects implementation
What happens in ‘sells’ leadership (Tannenbaum & Schmidt)
Leader still makes decision, but attempts to overcome resistance through discussion & persuasion
What happens in ‘consults’ leadership (Tannenbaum & Schmidt)
- manager presents ideas & invites questions from staff
- manager presents tentative decision subject to change
- manager presents problem; gets suggestions, then makes the decisions
What happens in ‘joins’ leadership (Tannenbaum & Schmidt)
- managers asks group to make decision within the limits he/she sets
- manager allows team to develop options & decide on actions defined by manager
Blake Mouton Managerial Grid : 5 leadership styles
Impoverished Management ( 1 , 1 ) Country Club Management ( 9, 1 ) Task Management ( 1 , 9 ) Team Management ( 9 , 9 ) Middle of the Road Management ( 5 , 5 )
How to measure Blake Mouton Managerial Grid
Horizontal Line = concern for task ( 1 - 9 )
Vertical Line = concern for people ( 1 - 9 )
Impoverished Management
Laissez-faire style; minimal effort on management; hoping to avoid blame for errors
Country Club Management
Focus on creating safe, comfortable working environment; minimal conflict
Task Management
Autocratic style, consistent with McGregor Theory X. Workers have to complete tasks - nothing else
Team Management
Staff closely involved in decision-making & feel valued; consistent with McGregor Theory Y
Middle of the Road Management
Compromises made to achieve acceptable performance; thought to be the less effective leadership style.
Which leadership style is best?
- many alternative forms & styles
- right leader for the right situation :
= autocratic makes more sense when business is in trouble ( e.g rapid turnaround)
= autocratic would be inappropriate where performance is highly dependant om effective team-working & decentralised operation
= stage of business : start up v established & complex
Stakeholder
An individual or group or other institution with a direct interest in the business activities and performance or in a project to be undertaken by that organisation.
Internal Stakeholders
- owners
- shareholders
- employees
- managers
- trade union representatives
- works councils
External stakeholders
- customers
- competitors
- suppliers
- government
- pressure groups
- investors
- media
- local community
Overlapping stakeholder needs
Sometimes, he needs/concerns of different groups of stakeholders may be common.
e.g if business closes, this will have a negative impact on shareholders, employees, suppliers and the local community
Stakeholder conflict
A business’ survival depends on support from its stakeholders and so the extent to which it can satisfy their needs / expectations / objectives is crucial.
This becomes difficult when the needs of different groups of stakeholders are in conflict with one another
Shareholder interests
- high profit + dividends
- positive corporate image
- long term growth
Employees’ interests
- job security
- good working conditions
- high levels of pay
- promotion opportunities
- to be consulted about changes that affect them
Managers’ interests
- high status
- high pay
- high bonuses
- job security
Trade unions’ interests
to be consulted + take on active part in decision making to ensure policies + strategies benefit their members
Customer’s interests
- high quality products at fair prices
- good service
- wide choice
Suppliers’ interests
- regular orders
- fair prices
- prompt payment
- advance notice of any changes
Banks + investors interests
full + prompt repayment of loans + interests
Local community interests
- local employment opportunities
- socially responsible activities to benefit the local area
Environmental pressure groups
Business activity to have a neutral or beneficial effect on the environment
Government ( central + local )
- provision of employment + training
- compliance with the law
- impact on local communities
‘win-lose’ or ‘win-win’
It may be the case satisfying the needs of one group of stakeholders is at the expense of another group.
E.g if more of the profits are paid to shareholders, there is less available to reward employees - this is a win-lose situation
E.g if better rewards + conditions are provided for employees, although this may reduce payments to shareholders in the short-run, they may benefit in the long-term
Stakeholder mapping
Mendelow’s stakeholder mapping provides a framework to help analyse stakeholders power, interest, to help manage conflicting stakeholder needs + objectives
Internal influences on the relationship with stakeholders
- business objectives
- management leadership styles
- size + ownership of the business
External influences on the relationship with stakeholders
- market conditions
- the power of stakeholder groups
- government policies
Low level of stakeholder power + low level of stakeholder interest
A : low interest, low power, minimal effort
Not all powerful group of stakeholders e.g business that supply small quantities of low value or a customer group that purchases small + declining amounts of the businesses products. Managers don’t need too much about their group + may only update them using general communication.
Low level of stakeholder power + high level of stakeholder interest
B : keep informed, communicate regularly with them
Very powerful but interested in the activities of the business. E.g 2 group of residents close to a factory concerned about its impact on their lives. This business will need to maintain the goodwill of the residents
High level of stakeholder power + low level of stakeholder interest
C : low level of interest, high power, keep satisfied
Powerful group but who have low interest. E.g Investors only interested in financial return. Managers may want to increase their level of interest
High level of stakeholder + high level of stakeholder interest
D : high interest, high power + key players
The most powerful interested stakeholder groups. They are likely to have a major influence on management decision. E.g major customers who only want to deal with ethical businesses
Order of high - low effort in stakeholder engagement
1 ) Partnership 2 ) Participation 3 ) Consultation 4 ) Push communications 5 ) Pull communications
Stakeholder engagement - high influence + high interest
Partnership
Participation
Stakeholder engagement - high influence + low interest
Participation
Consultation
Stakeholder engagement - low influence + high interest
Consultation
Push communications
Stakeholder engagement - low influence + low interest
Push communications
Pull communications
Partnership
- decisions may be taken jointly by the management team and the relevant stakeholders
- actions will be implemented together
- shared responsibility
- extensive two-way communication
- most suitable for stakeholders that have considerable power and interest
Participation
- similar to partnership
- stakeholders part of the team
- usually concerned with a particular aspect of a project
- suited to stakeholders with high power but relatively low interested
Consultation
- finding out with the reviews of relevant stakeholder groups
- stakeholders have limited power to influence decisions / actions
- two-way communication within boundaries set by the business
Push communication
- one-way communication to relevant stakeholder groups
- information broadcast to stakeholders via a range of channels, including email, letter, podcasts, videos and leaflets
Pull communication
- one way engagement
- information made available to stakeholders who may choose whether or not to engage
Why is stakeholder mapping used?
- analyse the degree of power and level of interest of each stakeholder group
- determine the most suitable and cost-effective approach to stakeholder engagement
Decision making
This is very important as it take places at every level of the organisation. Approaches to decision making range from scientific to intuitive approaches
Decision making based on data
Scientific decision making involves using a systematic process for making decisions in an objective manner
Advantages of making a scientific decision
it removes as far as possible, bias and subjectivity, and reduces risk
scientific decision making can be criticised as …
- slow process
- lacks creativity
- fails to lead to innovative and different approaches
what does scientific decision making allow in the end
actions to be reviewed and the most effective course of action to be decided
5 steps of scientific decision making
1) set objectives
2) gather data
3) analyse data
4) select a strategy / make the decision
5) implement and review the decision
Step 1 of scientific decision making
Set objectives - the firm must set objectives in relation to what it wants to achieve and where it wants to be with its corporate mission statement.
the firm wants production to take place in :
- cost effective location
- taking account of long-term training costs
- infrastructure costs
- building up relationships with customers, suppliers and distributors
Step 2 of scientific decision making
Gather data - data on costs, demand, location, available workforce and reputation will be needed and may be gathered through primary and secondary research methods.
Step 3 of scientific decision making
Analyse data - gathered data needs to be analysed in order to provide a recommendation. Various quantitative decision-making techniques or tools available to do this. e.g decision tree
Step 4 of scientific decision making
Select a strategy / make the decision - should be made on the basis of the recommendations that emerge from the data analysis
Decision Tree
- uses estimates and probabilities to calculate likely outcomes
- helps to decide whether the net gain from a decision is worthwhile
The 4-step approach to decision trees
1) identify the option
2) add possible outcomes
3) add associated costs, outcome probability and financial results
4) calculate the expected values and net gains
what is probability?
- the percentage chance or possibility that an event will occur
- ranges between 1 (100%) and 0
- of all the outcomes of an event are considered the total probability must add up to 1
How to calculate probability on a decision tree
financial value of an outcome calculated x financial result
How to calculate net gain on a decision tree
Add the expected value of each outcome and deducting costs associated with the decision
