Management, Leadership and Decision Making Flashcards
what are the parts of tannembaum and schmidt’s
tells, sells, suggests, consults, joins, delegates, abdicates
describe the three pressures faced by leaders
Situational- complexity of problem, importance of decision, time pressure
Leader’s inner pressure- leaders preferences of decision making, leaders confidence in team colleagues, how risky decision if to them personally
Pressures from subordinates- colleagues desire to have a say, groups willingness to take responsibility for the outcomes, groups ability to reach decisions, groups readiness to accept orders
how is tannenbaum and schmidt useful
demonstrates seven ways to approach leadership decisions, predicts pressures leaders have to consider before making a decision
autocratic leadership
-one-way communication
-minimal delegation
-leader has full power
-close supervision of employees
-no wavering judgement or miscommunication
-faster decisions
-no diverse solutions, doesnt inspire employees
delegation
the passing of authority down the organisational structure
democratic leadership
-operating a business according to decisions made as a group
-two way communication
-leader acts upon advice
-full employee involvement
-ensures variety of opinion
-allows different perspectives to be seen so broader range of customers served
paternalistic leadership
-one dominant leader but allows employee input
-two way communication, more motivating so social needs met
-slow decision making
-power inbalance
laissez-faire leadership
-leader had minimal input
-employees given power to make majority of decisions
-employees can grow innovation and creativity
-lots of freedom and independence of employees
-employees may feel lost and unsupported
-lack of direction and no clear vision
what factors can influence the style of management/leadership adopted
-tradition and history of business
-type and skill of labour force
-nature of task and time pressure
-personality of leader e.g. leader who is good at communication better with democratic, leader who knows direction better as autocratic
decentralisation
passing authority from the top of the business to those working elsewhere in the business
empowerment
actions designed to give employees greater control
what part of the tannenbaum and schmidt diagram shows leadership with more authority
tells, sells, suggests, consults
what part of the tannenbaum and schmidt diagram shows leadership with less authority
joins, delegates, abdicates
tells
manager makes decision and announces to the team, useful with lots of new starters, frustrating for those wit high experience
sells
manager sells decision to employees but makes overall decision but allows employee input, team feels their needs are considered
suggests
manager presents ideas and invites questions, outlines the decision, builds trust with employees
consults
proposes decision subject to change after employee input, allows team to influence final outcome, acknowledges that the team has valuable input
joins
manager presents problem and gets suggestions to make a decision, team feels valued and trusted
delegates
manager defines problem but asks group to make the decision, leader accountable for the outcome
abdicates
manager makes team define the problem and decide how to solve it, team makes final decision with their full power
leadership
the functions of ruling, guiding and inspiring other people within an organisation in pursuit of agreed objectives
management
planning, organizing, directing, and controlling all or part of a business enterprise
what are the four principle functions of management
Planning-setting objectives, this allows for manager to plan for the future in an organised manner
Organising-must assemble resources needed to carry out actions set out by planning process
Directing-management able to influence behavior of staff in achieving goals and assisting them in providing necessary resources, leads employees through motivation
Controlling-setting standards using company’s objectives and reviewing performance
Motivation
-willingness to achieve a target
-employees who are motivated perform better so helps business achieve objectives
-managers focus on motivating employees and grant them authority so it improves their performance
communication
-the exchange of infomation between people
-e.g. praise/ clear guidance
-can help achieve high levels of productivity and encourages employees to solve problems
how do managers report on business’s performance
Financial Reports-gives information on sales, revenue and profit, legal requirement in some countries
Employee Performance-can provide info on productivity
Social Performance-how well the business is performing ethically/sustainably
when is autocratic leadership appropriate
-when rapid action needed/ in emergency
-when its important that the same message is given to everyone in the organisation/in crisis
-when manager is responsible for large number of new/ unskilled employees
when is autocratic leadership inappropriate
-when taking very complex decisions needing diverse knowledge
-when leading skilled group of employees
-when junior managers expected to develop high range of manager skills
how is democratic leadership good
-results in satisfied and motivated team
-develops skills of employees
-high levels of motivation means less supervision/ low dependency on leader
-offers different perspectives
when is laissez faire leadership appropriate
-when leader wants to bring best out of highly skilled employees
-when workforce is self motivated and understands the role of managers
-when workforce understands organisation’s objectives
programmed decisions
familiar and routine decisions
non-programmed decisions
less structured and require unique solutions
risk
the chance of incurring misfortune or loss
uncertaintys
situation where there is lack of knowledge and events, outcomes or consequences are unpredictable
opportunity cost
the next best alternative foregone
scientific decision making
based on data and uses a logical, rational approach to decision making
probability
the chance of a particular event happening
expected values
the financial outcomes from a specific course of action adjusted to allow for the probability of it ocurring
net gain
the expected values minus the cost
ethics
moral principles which underpins business decisions and actions
strategic decisions
-longterm
-involves large commitment of resources
-difficult to reverse
-usually taken by senior management
tactical decisions
-short term
-fewer resources involved
-easier to reverse
-usually taken by junior management
what do managers get if they make good decisions
bonuses/rewards
when is it appropriate to use scientific decision making
when theres a high degree of risk that managers are seeking to reduce or if a major decision needs to be taken
how may data be collected
internet, customer surveys, business records
what are limitations of scientific decision making
-data might not be accurate or reliable
-difficult to know customer’s views on a new product so old customer surveys unreliable
when is it appropriate to use intuition based decision making
-when the decision is an assessment of a potential business partner
-assessing whether an advertising campaign for a new product will capture customer attention
-when a quick decision is needed
decision tree
a model that represents the outcomes for a business and shows the financial consequences of each
expected value calculation
expected value=(probability 1 x outcome 1) + (probability 2 x outcome 2)
how are decision trees useful
-makes managers think about different options and consequences of each
-results in more logical process based on evidence rather than a gut feeling
-forces managers to quantify the impact of each decision
-logical comparison of the options available
decision tree limitations
-only include financial and quantifiable data, no qualitative factors
-depends how accurate probability estimates are, more open to manipulation by managers to achieve desired outcome
-hard to use effectively if the range of possibilities arent clear
what is leadership
the way in which one person influences the behaviour or actions of other people
what is the roles of leaders
-inspiring employees
-creating a vision
-shaping the core values and culture of the business
-building effective teams/relationships
-take risks
-set the strategy and objectives
-have followers
what is the role of managers
-implement the strategy
-coordinate resources
-use their authority to make decisions
-manage risks
-have subordinates
why is leadership important in business
-increases emphasis on teamwork
-supports and coaches employees
what are the types of leadership
authoritarian, paternalistic, democratic, laissez-faire
when do you not want authoritarian leadership
-changes in society’s values
-better educated workforce
-changing workplace organisation
-greater workplace legislation
-pressure for employee involvement
why is scientific decision making becoming more popular
-more widespread availability of data
-greater knowledge of data analytics and skills
what is a stakeholder
any individual or organisation who has an interest in a business
who are the main stakeholders in a business
Internal- managers, employees, shareholders
Connected- customers, suppliers, creditors
External- government, competitors, society
what are the main interests of shareholders
-return on investment/dividends
-success and growth of a business
-proper running of a business
what are the main interests of managers and employees
-rewards e.g. basic pay and other financial incentives
-job security and working conditions
-promotion opportunities, job satisfaction and status
-motivation, roles, responsibilities
what are the main interests of customers
-value for money
-product quality and customer service
what are the main interests of suppliers
-continued and profitable trade with a business
-financial stability
what are the main interests of banks and other finance
-can the business pay back loans
-profitability and cash flow
-growth in profits and value of a business
what are the main interests of society
-success of the business in creating and retaining jobs
-compliance with local laws and regulations
what are the main interests of government
-the correct collection and payment of taxes
-helping the business grow and create jobs
-compliance with business legislation
who is likely to support and oppose the decision to cut jobs and reduce costs
support: shareholders, banks
oppose: employees, society
who is likely to support and oppose the decision to add extra shifts to increase factory capacity
support: management, customers, suppliers
oppose: society
who is likely to support and oppose the decision to introduce new machinery to replace manual work
support: customers, shareholders
oppose: employees
who is likely to support and oppose the decision to increase selling prices significantly to improve profit margins
support: shareholders, management
oppose: customers
how should the business respond to the stakeholder if theres high interest and high power
-take notice of them
-engage directly with them
how should the business respond to the stakeholder if theres low interest and high power
-keep them satisfied
how should the business respond to the stakeholder if theres high interest and low power
-communicate regularly with them
how should the business respond to the stakeholder if theres low interest and low power
-communicate with them only when necessary
what are the approaches to stakeholder management
Partnership- high power high interest, a lot of two-way communication
Participation- high power low interest, two way communication
Consultation- low power high interest, stakeholders have limited power to influence decisions
Push- low power low interest, one way communication
Pull- little power little interest, communicates with stakeholder groups but only if they choose to engage
