Models And Theories Flashcards
What is the Tannenbaum Schmidt continuum?
- highlights the different managment styles that can be adopted.
Key points of the Tannenbaum Schmidt continuum ?
-Left side: team centred approach. Right side: boss-centred approach
- is a continuum instead of categorising as ‘authoritarian’ and ‘democratic’
What is the Blake mouton grid?
Shows the different management styles, based on their focus on the task and the focus on people within the business
Describe the corners in the blake mouton grid.
- top left: country club- high concern for people, low concern for task
- top right- team leader- high concern for task, high concern for people
- bottom left- impoverished- low concern for task, low concern for people
- bottom right: produce or perish- of concern for people, high concern for taking
What is the ‘scientific decision making’ model?
Highlights different stages in scientific, data based approach to decision making. Takes a logical and rational approach
When can you use the scientific decision making model?
- the value of data (reliability, variety etc) that led to a particular outcome eg poor data leading to poor decision making.
- The need to make decisions, then discuss opportunity costs
Importance of implementation - whilst deciding if a decision is good to choose or not. Eg is this the right way to do it or should we collect more data and then act on it?
- considering why decisions have gone wrong.
What is a decision tree?
An example of scientific decision making.
What do each shape on a decision tree represent? (Square, lines, circle)
A square: decision that has to be made
Lines: possible choices
Circles: the outcomes as a result of the choice
Tell me about the probability on a decision tree.
- an estimated likelihood of a given outcome
- ## the probability of all outcomes must add up to 1.
What is net gain? (Decision trees)
Expected value minus the initial coast of a given choice.
What is the expected value (decision trees) and how do you work it out?
Shows the weighted average of a given choice.
Multiply the probability of each given outcome by its expected value and add them together
What is the ‘stakeholder mapping’ model?
Categorises stakeholders in terms of their relative power and interest.
Describe the stakeholder mapping model.
High power+ low interest= keep satisfied
Low power+ low interest= monitor (minimum effort)
High power+ high interest= manage closely
Low power+ low interest= keep informed
What is market mapping?
Identifies how products/brands are perceived by customers in relation to other products/ brands in the market.
Describe the market mapping diagram
Portrait arrow= high price, low price
Landscape arrow= conservative, innovative
When is the market mapping diagram helpful?
Allows brands to identify the categorises a customer considers when assessing a product.
Helpful when talking about a business moving their positioning of the business.
What is price elasticity of demand?
The percentage change in quantity demanded of a product in relation to the percentage change in price.
Why is price elasticity of demand relevant?
- influences pricing decisions
- allows managers to know how to change price to increase overall revenue
- provides useful information on the quantity demanded if price changes. This is helpful as it allows them to deicide staffing, inventory controls, planning cash flow and estimating profit and loss.
What does it mean if a product/ service is price ELASTIC?
IS sensitive to price. A fall in price leads to a bigger INCREASE in quantity demanded. Total revenue is increased too as more units are sold
What does it mean when a product/ service is price INELASTIC?
INSENSITIVE to price changes. So a price increase will increase revenue as the price change is larger than the quantity demanded percentage change.
Problems of using PED?
Reliant on whether all other factors stay constant. Eg, income, weather, price of other products. Etc. Can be difficult to achieve this so PED is hard to measure.
Influences on PED?
- if the product is heavily branded, customers are not especially sensitive to price changes
- substitutes and their accessibility, if easily accessed then price elastic.
- proportion of income spent: if its a low percentage then they are less sensitive to to price change.
- if someone else is paying, then price changes don’t effect the consumer directly.
When is PED helpful?
- link to output, inventory control, staff levels, revenue and profit.
- link to exchange rates. Eg, strong pound means imports are cheaper. Think about material used.
- helpful when considering marketing, branding, differentiation etc.
