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BA > Chapter 11: Leadership and Governance > Flashcards

Chapter 11: Leadership and Governance Flashcards

1
Q

What are companies and organizations described as?

A

Purposeful socio-technical systems, with people and their communities as the most important level.

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2
Q

What is the definition of leadership?

A

The process of influencing the actions of an organized group toward goal setting and goal attainment.

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3
Q

What does leadership require?

A

Understanding the goal-related and motivational structures of those being led.

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4
Q

How are motivation theories categorized?

A

Into content theories and process theories.

  • Content theories: Describe motivational structures determining human actions.
  • Process theories: Describe how motivation arises.
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5
Q

What is Maslow’s hierarchy of needs?

A

A model that hierarchizes human needs into five levels:

  1. Physiological needs (e.g., food, sleep).
  2. Security needs (e.g., health, work).
  3. Social needs (e.g., family, friendship).
  4. Individual needs (e.g., esteem, independence).
  5. Self-realization (e.g., pursuing meaning in life).
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6
Q

How does Maslow’s theory apply to the workplace?

A

People seek more than job security; they value team spirit, mutual appreciation, and opportunities for self-realization.

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7
Q

What is Herzberg’s two-factor model?

A

A theory that classifies motivational factors as:

  • Motivators: Promote satisfaction (e.g., achievement, recognition).
  • Hygiene factors: Avoid dissatisfaction (e.g., company policies, competent superiors).
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8
Q

What is the role of income in Herzberg’s model?

A

Income can be both:

  • A hygiene factor (fair basic salary avoids dissatisfaction).
  • A motivator (bonuses increase satisfaction).
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9
Q

What is extrinsic motivation?

A

Motivation based on external incentives, like salary and titles (related to Theory X).

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10
Q

What is intrinsic motivation?

A

Motivation derived from meaningful work and satisfaction from contributions and creativity (related to Theory Y).

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11
Q

Why is extrinsic motivation insufficient for complex work?

A

Because it focuses on measurable tasks, neglecting nonmeasurable elements like talent development.

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12
Q

What does the valence-instrumentality-expectancy theory state?

A

Motivation arises from:

  1. Expectancy: The perceived probability of success.
  2. Instrumentality: The desired consequences of an action.
  3. Valence: The value of the successful outcome.
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13
Q

What are the two extreme concepts of the human being in motivation?

A

Theory X: People act only on external impetus, requiring commands and controls.

Theory Y: People are intrinsically motivated, valuing meaningful work, creativity, and appreciation.

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14
Q

What risks are associated with Theory X management?

A

It can create a fear-based culture where employees act only under control, making shifts to intrinsic motivation difficult.

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15
Q

How does Theory Y affect management practices?

A

It emphasizes delegation, responsibility, and participation, fostering intrinsic motivation.

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16
Q

What is the self-fulfilling nature of concepts of the human being?

A

Organizations emphasizing extrinsic motivation train employees to rely on rewards and controls, diminishing intrinsic motivation.

Bureaucratic control mechanisms can suppress voluntary actions, leading to a focus only on measurable tasks.

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17
Q

What is the purpose of leadership and management processes?

A

To align organizational actors and goals.

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18
Q

How are leadership and management processes related to the SGMM?

A

They have been integral to the SGMM since its first generation.

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19
Q

What are management processes?

A

Planning and management processes that typically span a year, including analyzing goal attainment, budget planning, action planning, implementation, and review.

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20
Q

What are support processes?

A

Structural management measures, especially in HR processes such as recruitment, remuneration, and personnel development.

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21
Q

What is governance in the context of SGMM?

A

An organization’s fundamental and stabilizing control systems.

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22
Q

How is leadership a part of organizational structure?

A

Organizational structure defines the framework and responsibility for leadership.

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23
Q

How is leadership related to organizational culture?

A

Leadership culture is an important part of corporate culture.

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24
Q

How does the current generation of SGMM distinguish management, leadership, and profession-related leadership?

A

Management: Reflective design of value creation systems, focusing on the “macrocosm” of organizational leadership.

Leadership: Management of people and employees, focusing on the “microcosm” of organizational leadership.

Profession-related leadership: Task-centered leadership using specialist expertise, focusing on the “microcosm.”

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25
Q

What distinguishes profession-related leadership from general leadership?

A

Profession-related leadership relies on specific, task-centered expertise (e.g., a surgeon in the operating room).

General leadership involves “communicative interventions” to manage people.

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26
Q

What do different management and leadership approaches build upon?

A

Different ideas and assumptions about how organizations function and concepts of the human being.

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27
Q

When does leadership occur?

A

Leadership occurs when individuals with specific goals mobilize resources to motivate and maintain the motivation of those who are led.

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28
Q

How can leadership be understood?

A

As an attempt to exert influence to motivate group members to perform and achieve organizational goals.

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29
Q

What determines leadership styles?

A

Organizational type, culture, and situational context.

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30
Q

What guides a leader’s activities over time?

A

Leadership principles or precepts developed through experience.

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31
Q

What are authoritarian and patriarchal leadership styles?

A

Leaders make decisions themselves, might persuade others, and enforce decisions with harsh measures.

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32
Q

What characterizes participatory and democratic leadership styles?

A

Decisions are made together with the group, often involving open discussions and eliminating information asymmetries.

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33
Q

What is delegative leadership?

A

A style where the leader hands over decision-making to the group, possibly within a specific framework.

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34
Q

What does the managerial (behavioral) grid focus on?

A

Differentiates leadership behavior based on human orientation and factual orientation, outlining five basic behaviors.

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35
Q

What is transactional leadership?

A

A style based on performance control, incentives, and close monitoring, aligned with Theory X.

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36
Q

What is transformational leadership?

A

Leadership through exemplary action, inspiration, and intrinsic motivation, aligned with Theory Y.

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37
Q

What is a key tool in transformational leadership?

A

Representing “meaningfulness” or “purpose.”

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38
Q

Why is transformational leadership important for Generation Y and Z?

A

These generations value meaningful work and personal development as much as monetary rewards.

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39
Q

What does situational leadership theory propose?

A

Effective leadership styles vary based on the situation, task, and employee maturity.

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40
Q

What does contingency theory emphasize?

A

Organizations face a constant tension between differentiation and integration, requiring adaptable leadership decisions.

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41
Q

What factors influence situational leadership?

A

Employee maturity, task complexity, and time availability.

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42
Q

When is an authoritarian leadership style appropriate?

A

For quick decision-making in crises to avoid disputes and maintain group cohesion.

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43
Q

What is the basis for effective leadership?

A

Matching context, task, leadership personality, and organizational culture.

44
Q

Why might a leader succeed in one context but fail in another?

A

Due to mismatched elements like context, task, or organizational culture.

45
Q

What should managers constantly do to improve?

A

Question themselves and follow leadership rules as guidelines.

46
Q

How are today’s leadership styles influenced by Benedictian rules?

A

The third chapter of Benedict’s rules corresponds to participatory leadership styles.

47
Q

Example: What are General Schwarzkopf’s leadership rules?

A
  1. Fix only what is broken.
  2. Set clear goals and high demands.
  3. Avoid unnecessary interference in subordinates’ work.
  4. Create a climate for learning from mistakes.
  5. Make leadership decisions promptly, guided by one’s inner voice.
48
Q

What are the two overarching functions of human resources management (HRM)?

A
  1. To recruit, develop, and release employees.
  2. To support managers’ employee management.
49
Q

What are the main HRM tasks?

A
  • Determining personnel requirements.
  • Recruitment.
  • Staff motivation and remuneration.
  • Human resources development.
  • Releasing staff.
50
Q

How should HRM align with organizational strategy?

A

By contributing to aligning the actions of organizational members with goals and context.

51
Q

What are the two types of personnel requirements?

A
  1. Quantitative: Workload and productivity ratios (e.g., area to be cleaned per employee).
  2. Qualitative: Competency, personality profiles, and cultural fit (e.g., job descriptions, requirement profiles).
52
Q

What must qualitative personnel requirements account for?

A

Future organizational changes and emerging trends (e.g., new technologies, markets).

53
Q

What is recruitment?

A

The process from identifying the need for new staff to selection and onboarding.

54
Q

What are the advantages of internal recruitment?

A
  • Faster training.
  • Motivation for internal employees.
  • Familiarity with applicants.
55
Q

What are the advantages of external recruitment?

A

Bringing in new competencies.

Fresh perspectives.

56
Q

What are common recruitment methods?

A
  • Open advertisements.
  • Covert searches (for confidentiality).
  • Active methods like staff poaching.
57
Q

What are the main stages of recruitment?

A
  1. Eliminate applications that fail formal requirements.
  2. Create a “long list” based on requirement profiles.
  3. Create a “shortlist” using qualitative criteria.
  4. Assess shortlisted candidates individually.
58
Q

What methods are used in advanced recruitment stages?

A
  • Interviews.
  • Assessment centers (e.g., aquarium method, case studies).
59
Q

What does onboarding include?

A
  • Providing necessary qualifications.
  • Offering workplace infrastructure.
  • Creating a welcoming atmosphere.
60
Q

What are the two types of incentives?

A
  1. Monetary: Fixed and variable compensation (e.g., bonuses, pensions).
  2. Nonmonetary: Work content, flexibility, infrastructure, and work-life balance.
61
Q

What are key aspects of a monetary compensation system?

A
  • Oriented toward requirements, performance, and behavior.
  • Socially fair and market-appropriate.
  • Linked to organizational success.
62
Q

What nonmonetary incentives are valued by Generation Y and Z?

A
  • Flexible work options (e.g., remote work, sabbaticals).
  • Opportunities for training and development.
  • An appreciative management style.
63
Q

What are the two main areas of personnel development?

A
  1. Career planning.
  2. Employee training and development.
64
Q

What is career planning?

A

Designing systems to assess and promote employee performance potential.

65
Q

What is employee training and development?

A

Measures to expand knowledge and skills (e.g., in-service training, e-learning, coaching).

66
Q

Why is personnel development important?

A

It addresses labor market shortages and motivates employees by offering growth opportunities.

67
Q

What does releasing staff involve?

A

Eliminating staff surpluses through layoffs, transfers, or reduced working hours.

68
Q

What are common reasons for releasing staff?

A
  • Declining sales.
  • Structural changes.
  • Seasonal fluctuations.
  • Automation.
69
Q

How can redundancies be minimized?

A
  • Long-term personnel planning.
  • Natural attrition (retirement, resignations).
  • Voluntary departures (early retirement, financial compensation).
70
Q

What is outplacement?

A

A “soft” separation supported by HR consultants to help employees transition.

71
Q

What does governance focus on in an organization?

A

Governance focuses on nonpersonal, formal determinations of an organization’s purpose, function, and strategic direction.

72
Q

What are the three core functions of corporate governance?

A
  1. Defining the organization’s mission and stakeholder relationships.
  2. Defining system boundaries and the type of organization.
  3. Institutionalizing executive management and defining strategic competencies.
73
Q

What are the three core functions of executive management?

A
  1. Concretizing success and creating conditions for it.
  2. Operationalizing strategies within governance-defined boundaries.
  3. Differentiating management practices and stabilizing development processes.
74
Q

How does corporate governance relate to executive management?

A

Corporate governance defines the framework, while executive management handles the operational and strategic implementation within that framework.

75
Q

What is the concept of a “two-person cockpit” in management?

A

It refers to a relationship where roles are distinct but complementary, similar to the relationship between a pilot flying an aircraft and a co-pilot managing radio and supervision.

76
Q

What is the “noses in, fingers out” principle for board members?

A

Board members should think critically about issues but avoid direct involvement in operational management.

77
Q

What is the difference between monistic and dualistic systems of governance?

A

Monistic system (e.g., English-speaking world): A board with both executive and non-executive members.

Dualistic system (e.g., Germany): A supervisory board (shapes stakeholder relationships) and an executive board (shapes strategy).

78
Q

What is the Swiss approach to corporate governance?

A

A middle course, where the board of directors manages the company but can delegate operational management to an executive management team for specific tasks.

79
Q

What problem does corporate governance aim to solve?

A

The “principal-agent problem,” where the owners (principals) entrust their capital to management (agents), who may act in ways that don’t align with the owners’ interests.

80
Q

What is “moral hazard” in corporate governance?

A

The risk that the agent (management) may behave recklessly in the absence of control, resulting in losses for the principal (owners).

81
Q

What does the inner and outer triangle of corporate governance represent?

A

Inner triangle: Interactions between management, board of directors, and auditors.

Outer triangle: Interactions between the company, markets, and stakeholders.

82
Q

What is the consequence of failing to balance the inner and outer triangles of corporate governance?

A

Corporate governance may fail if management takes risky actions or acts criminally, and the board or auditors fail to raise concerns.

83
Q

What are “codes of best practice” in corporate governance?

A

Guidelines developed by countries, industry organizations, and business associations to enhance governance and complement statutory provisions.

84
Q

What are key characteristics of good corporate governance?

A
  • Appropriate risk management.
  • Transparent processes for electing board members.
  • Functional management aligned with long-term value creation.
  • Safeguarding stakeholder interests.
85
Q

What role does risk management play in corporate governance?

A

Risk management involves analyzing and classifying risks to ensure they are controlled and minimized.

86
Q

What is a risk matrix?

A

A tool used to classify operational and strategic risks based on expected damage and probability of occurrence, guiding risk management decisions.

87
Q

How are risks classified in a risk matrix?

A
  • Dark fields (red): Unacceptable risks (high probability, high damage).
  • Medium range (yellow): Risks that require action to reduce damage and probability.
  • Light areas (green): Acceptable risks.
88
Q

What are the three lines of defense in risk management?

A
  1. First line: Operational management identifies risks.
  2. Second line: Internal compliance supports and monitors operational management.
  3. Third line: Internal audit monitors compliance and works with external auditors.
89
Q

Why is compliance important in corporate governance?

A

Compliance prevents financial and reputational risks and ensures adherence to legal and organizational rules.

90
Q

What is a “Code of Conduct”?

A

A set of behavioral principles for company members, ensuring appropriate conduct and compliance.

91
Q

What is the difference between leadership and governance?

A

Leadership ensures achieving organizational goals through personal influence and motivation, while governance concerns nonpersonal, formal determinations of an organization’s purpose and function.

92
Q

What are examples for hygiene factors?

A
  • Company policy/administratoin
  • Competence of superiors
  • Relationship with superiors
  • Working conditions
  • Status
93
Q

What are examples for motivators?

A
  • Performance/sense of achievement
  • Recognition
  • Work itself
  • Responsibility
  • Progress/promotion
94
Q

What are characteristics of theory x?

A

Man is unwilling

Characteristics and typical notions of respective leadership:
- Superiors/subordinates
- Commans/Instructions
- Control

95
Q

What are characteristics of Theory Y?

A

Man is committed

Charactersitcs and typical notions of respective leadership:
- Decentralization of decision-making
- Delegation of responsibility
- Participation

96
Q

There are three different definitions of leadership.
Which are they?

A

Leadership is the process of influencing the activities of an organized group toward goal setting and goal achievement

Leadership over human beings is exercised when persons with certain motives and purpose mobilize in competition or in conflict with others, institutional political psychological and other resources so to arouse engage and satisfy the motives of followers

Leadership is understood to be the attempt to exert influence in order to motivate group members to perform and thus to achieve group or organizational goals, influence can be defined as a change in the attitudes, values, beliefs and behavior of target persons as a result of the influence efforts of the leader

97
Q

What is Velvet Glove Management? Where is it placed in the managerial grid?

A

High human orientation, low factual orientation

Considers the needs of employees for satisfactory interpersonal relationships; results in a leisurely and friendly working atmosphere and pace of work

98
Q

What is Team Management? Where is it placed in the managerial grid?

A

High Human and high Factual orientation

High performance of committed employees interdependence in joint commitment to corporate goals establishes mutual trust and respect

99
Q

What is Human Organization Management? Where is it placed in the managerial grid?

A

In the middle of the managerial grid

100
Q

What is the Survival Management? Where is it placed in the managerial grid?

A

Low Human orientation and low factual orientation

Minimal effort to do the required work is just enough to stay in the company

101
Q

What is Command and Obey Management? Where is it placed in the managerial grid?

A

Low Human orientation and high factual orientation

Operational succes is based on establishing working conditions such that the influence of personal factors is kept to a minimum.

102
Q

Which are Key concepts by sub-area of personnel management?

A
  • Personnel requirements assessment
    (Qualitative and quantitative)
  • Personnel recruitment
    (Search or selection procedures)
  • Personnel motivation and remuneration
    (Monetary and non-monetary incentives or fair remuneration)
  • Personal development
    (Further education programs or coaching)
103
Q

Which are target areas of corporate governance?

A
  • Promoting transparent and efficient capital markets
  • Protecting and faciliating the exercise of shareholders’ rights
  • Ensure equal treatment of all shareholders
  • Promote active cooperation between companies and stakeholders
  • Ensure disclosure of material matters concerning the company: assets, earnings and financial position, ownership structure, corporate governance structures
  • Establishing effective oversight by the board; accountability of the board to the company and shareholders
104
Q

What are characteristics of “good corporate governance”?

A
  • Appropriate handling of risks
  • Formal, transparent process for proposing and electing board members
  • Functional corporate governance
  • No cross-involvement between rumenration committees of different companies
  • Management decisions are geared towards long-term value creation
  • Transparency in corporate communication
  • Safeguarding the interests of different groups (e.g. stakeholders)
  • Purposeful cooperation of corporate management and supervision

Attention:
The tasks and responsibilities of boards of directors are increasingly legally defined and increasingly demanding.

105
Q

What differentiates the Board of Directors (BoD) from the Executive Board?

A
  • The BoD is not involved in day-to-day business
    (Leaves the operational controlling to the executive board, is at higher level than the executive board, has an information deficit vis-à-vis the executive board)
  • The BoD brings external experiences to the assessment
    (A look beyond the end of the nose, new impulses for the assessmnent of the company)
  • The BoD decides on the basis of prepatory work by the executive board
    (Controlling by BoD is primarily based on information provided by the Executive Board, Controlling is therefore crucially dependent on good and open communication)
106
Q

What is the definition of compliance management system?

A

Structural and procedural organization of an institution with interacting components and the objective of ensuring compliance with obligations with regard to external and internal binding requirements

Important tools and methods for this are amongst others risk management method, process management method or delegation methods

BA (12 decks)

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