3.2.1 Understanding management, leadership and decision making

Question 1

Management

Answer 1

the process through which company resources are used and decisions made in order to meet the objectives of the firm. Managers will set objectives and decide how to go about achieving them

Question 2

Leadership

Answer 2

the ability to influence and direct people in order to meet the goals of a group. Leaders are those people that can inspire and motivate people to meet objectives

Question 3

Role of managers

Answer 3

-set objectives (individual and team)
-analyse performance
-lead (inspire+motivate)
-making decisions
-review everything

Question 4

Leadership styles: Autocratic

Answer 4

the leader makes a decision without consultation (e.g in the army when a quick decision is needed)

Question 5

Leadership styles: Democratic

Answer 5

consults the team but makes the final decision

Question 6

Leadership styles: Laissez-faire

Answer 6

the leader allows the team to make decisions

Question 7

Leadership styles: Paternalistic

Answer 7

the leader acts in a fatherly way towards the workforce (makes decisions based on the needs of the workforce)

Question 8

Leadership styles: Bureaucratic

Answer 8

leaders work to rules and regulations (by the book)

Question 9

Interest rates

Answer 9

the rate charged for borrowing money over a period of time, or the reward for saving money

Question 10

Key factors influencing the amount of business investment

Answer 10

-actual and expected demand
-expected profits and business taxes
-interest rates+availability of business finance
-business confidence

Question 11

What happens when interest rates fall?

Answer 11

-cost of servicing loans/debt it reduced –> booming spending power
-consumer confidence should increase leading to more spending
-effective disposable income rises –> lower mortgage rates
-business investment should be boosted