Managers , Leadership and decision making Flashcards
What do Managers do
Set objectives - sets goals for a group and decide what work needs to be done
Organise
Motivate and communicate - create a team of people who work together
Analyse targets and measure performance
Develop people and review
Logic chain : how managers make decision
Set objectives - analyse situation - assess resources available - make a clear decision - review
Autocratic leaders
Make decision without consulting others. use one way top down communication and give orders
Democratic leaders
Make final decision but delegates and consult with others listening to feedback
Laissez faire
Allow team members freedom if they do their work and meet deadlines
Paternalistic leaders
Think of the security and best for staff . believes that employees need direction and acts like a father
5 leadership Styles on Blake Mouton grid
9,9 - Team management
9,1 - Authority
5,5 - Middle of the road
1,9 - country club
1,1 - Impoverished management
Team management
Focuses on both task and people . most effective with an emphasis on empowerment, trust, team work.
Authority
leadership is autocratic , clear emphasis on task and not people . may increase production and effective in short term but in long term , good employees will likely to leave
Middle of the road
Compromise here , with some focus on people and some on task , likely to lead to average performance
Country club
emphasis is on people with little concern for task . lack of urgency with poor productivity . Hamper production as it relies on workers being motivated
Impoverished management
no concern for people or task therefore no interest in the business altogether
what does the Tannabeum Schmidt continuum show
relationship between level of freedom in decision making that a manager gives to a team of workers and authority retained by manager . As workers freedom increases , managers authority decreases
4 sections of the continuum
Tells , sell , consult and delegate
Tells
Manager makes & announces decision
Sell
Manager sells decision
Manager presents ideas and invite questions
Consult
Manager presents decision subject to change
manager presents problem, gets suggestions and then decides
Delegates
Manager defines limits , then ask group for a decision
Manager permits subordinates to decide within defined limits
Strength of Blakes grid
the grid measures two factors : concern for people & task but continuum only measures one : leaders use of people
labels used like country club and 9,1 made it easy for managers to visualise the type of person implied by a 9,1 category
Understanding that some leaders are driven solely by results is perhaps why blake is more widely used
Strength of continuum
focus on boss use of his people gives an interesting amount of detail between the range of extreme approaches ( autocratic vs democratic)
gave bosses a measure by which they could judge their own approaches , helping them understand that “tell” is an extreme approach
Features, communication, and uses of a democratic leader
Encourages participation and delegation
extensive two-way communication from subordinates
Useful when complex decisions are made requiring range of specialist skills
Features, communication, and uses of autocratic leader
Sets objectives and allocates task , retain control
one way communication downwards
useful when quick decision are required
Features, communication, and uses of a laissez-faire leader
evades duties of management and uncoordinated delegation occurs
horizontal communication
useful as it encourages production of highly creative work by subordinates
Pros and *cons of democratic apporach
commitment to business , satisfaction and quality of work improve
*slow decision making
Pros and cons of autocratic
Decision and direction of business will be consistent . project image of confident , well managed business
*lack of information so subordinates dependent on leaders
Laissez fair pros and *cons
bringing the best out of a highly creative group
* not be deliberate but bad management - staff lack of focus and sense of direction
What is scientific decision-making
decision making that is based on data and uses logical and rational apporach
what do weak financial business consider
low-risk projects even if the returns are quite low
Intuition
making decisions based on gut feeling rather than data and rational analysis.
pros of scientific decision-making
application to logic
likely to reduce risk
pros of intuition
quick and data may be incorrect
Decision trees
trees like diagramused to determine the best course of action in situation where alternatives with certain outcomes exist
expected value calculations
outcomes * probabilities added together
net gain
Expected value - cost
Pros of decision-making
Make managers think and quantify decision rather than relying on tuition
demand managers consider all the possible alternative outcomes
allow uncertainty and forces assessment of chances and implications of success and failure
Cons on decision making
influenced by own bias towards one decision making the returns for their favored approach more attractive and justify decision
difficult to get meaningful data
don’t take into account the variability of business environment
Opportunity cost
cost of next best alternative foregone eg: investing in a new fleet of vehicles it may miss out on a new computer system- represents an opportunity cost
Influences on decision making
Mission and Objectives , Ethics , External environment , competition , resource constraints
Mission
Mission of business is its essential purpose and a business will be guided in its decision making by its mission and objective it sets Eg influenced by pricing policy
Ethics
Making decision that are morally correct . putting ethics before profit would find little favour
External environment
Downturn in economy or rise in interest rates could see decision postponed or abandoned . decision making will also be influenced by change in consumer taste or a new fashion trend
Competition
decision making aimed at first mover advantage and getting ahead of competition whereas other decision making will respond to actions of competitors .
Resource constraints
physicsally what is capable to do . skill of workforce and financial resources limits what a business can do .
Stakeholders
groups or organisation who have an interest in business
Stakeholders with their interests
Employees : Job security ,good working conditions and pay
Customers : good customer service and value for money
Shareholders : capital growth and dividends
Suppliers : regular orders and on time payment
Local communities : avoidance of pollution and congestion , employment
Govt: employment and payment on taxes
Stakeholder mapping categorised into
amount of power and level of interest
High interest , High power
key players , management needs to make this group happy , involving them in decision making process
Low power , Low interest
Require minimal effort from management , keeping them up to date
High power , Little interest
Consulted and meet their needs, if possible increasing their level of interest to avoid conflicts
High interest and little power
kept informed and up to date in order to avoid conflicts and enhance reputation of the business by showing them consideration
Stakeholder Overlap and conflicts of interest to relocation overseas
Overlap - Shareholders: potential for lower costs and increased profit
Managers: staff promotion and achieve objectives in terms of cost
Conflict:
Local community : impact on economy
employees : lost jobs
govt : less tax
Stakeholder Overlap and conflicts of interest to expand production
Overlap - Shareholders : higher sales and profit
Employees : job opportunities
Customers : greater availability
Suppliers: more orders
Govt : more tax
Community : greater production
Conflict :
Local community : congestion and pollution
Stakeholder Overlap and conflicts of interest to introducing new technology
Shareholders and management: lower costs and potential for increased profit
Consumer: result in better quality
Conflict :
Employees: lose jobs
Less employment: impact the local community
Stakeholder Overlap and conflicts of interest to increase prices
Shareholders: potential profit increase.
✚ Management: improved performance.
✚ Government: more tax.
Conflict :
customers : cost more
Stakeholder Overlap and conflicts of interest to cut cost
Shareholders: potential profit
Management: achieve objectives
Conflict :
Employees: potential job losses
Customers : quality might be affected
Suppliers : pressure on prices
Stakeholder Overlap and conflicts of interest to enter new markets
Shareholder: potential profit
Employees: job security
Suppliers: increased orders
Community: greater employment
Conflict :
Local community: pollution due to increased production
Influences on relationship with stakeholders
Leadership style: autocratic leaders may have little concern for individual stakeholder groups and would be likely to consult them.
Financial pressure: if a business is striving for survival then it would focus solely on internal stakeholders: one who can help solve problem
Business objective: some are committed to an ethical approach in their decision-making while others may be less concerned .
state of the economy: when its booming, more likely to improve the working conditions and environment with access to finance
Possible approaches to stakeholder management
partnership , participation, Consultation, Push communication, pull communication
Partnership
Involve stakeholder group most closely in the decision. suitable to stakeholders with high power and interest
Participation
less form of partnership. responsibility for some part of decision. suitable to stakeholders with high power and low interest
Consultation
finding out the views of relevant stakeholders who may respond to questions. suitable to stakeholders with high interest and low power
Push communication and Pull communication
Push - one-way communication: low power and low interest
Pull- engage with businesses if they want to
