Topic 2: Managers, Leading and Decision Making Flashcards

1
Q

What is the difference between leadership and management?

A

Leadership - taking initiative to set clear objectives and motivating staff towards the achievement
Management - organizing staff to implement strategies need to achieve the objectives

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2
Q

What is leadership + what is it about?

A

The way in which one person influences the behavior or actions of others
about:
-inspring employees
-creating a vision
-building effective teams

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3
Q

Three levels of management

A

Senior, Middle and Junior

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4
Q

What are the four leadership styles?

A

Autocratic
Democratic
Paternalistic
Laissez-faire

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5
Q

Autocratic leaders:
Definition
Advantage and disadvantage
When is it appropriate

A

When a manager/leader tells their employees what to do + don’t listen to what workers have to say (little delegation)
Adv: fast decision making
dis: can be demotivating which can lead to low staff retention
Appropriate in a business crisis where decisions need to be made quickly or when dealing with new/unskilled workers

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6
Q

Democratic leaders:
Definition
Advantage and disadvantage
When is it appropriate

A

Managers DELEGATE decision-making to the workers and more power is within the group
Adv: inc motivation as they have been given more responsibility
Disadvantage: slow down decision-making process

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7
Q

Paternalistic leaders:
Definition
Advantage and disadvantage
When is it appropriate

A

Still little delegation but managers deciding what is best for their employees and may CONSULT with staff
CONSULT, EXPLAIN, PERSUADE
Adv: inc motivation as they have some involvement and have been consulted
Disadv: in long term same dis as authoritarian

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8
Q

Laissez-faire leaders:
Definition
Advantage and disadvantage
When is it appropriate

A
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9
Q

Effectiveness of different leadership styles

A
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10
Q

Effectiveness of different leadership styles

A
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11
Q

How are business decisions approached?

A

INTUITION
- gut feeling
- key benefit - quick
- hard to justify for decisions involving risk as there is no hard data
SCIENTIFIC
- based on data + analysis
- can be time-consuming + no guarantee of right decision
- adopts a systematic approach rather than intuition

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12
Q

Different forms of decision making

A

Tactical decisions
Operational decisions
Strategic decisions

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13
Q

Key Considerations in decision making

A

Risk
Reward
Uncertainty
Opportunity cost

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14
Q

Why is opportunity cost important?

A

For start-up business’ resources are limited
as resources are scarce decisions about what to spend become risky
managers take calculated risks and weigh up the opportunity cost

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15
Q

Opportunity costs in developing a business idea

A

missing out on regular income
benefits lost from investing time + money into the business

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16
Q

Opportunity costs in deciding between opportunities

A

estimating potential sales
suitable skills
cash requirements

17
Q

What is a decision tree

A

diagrams that set out all options available when making a decision + an estimate of likelihood occurring

18
Q

EV (Expected Value) Caculation

A

probability of each outcome X expected value

19
Q

Net Gain Calculation

A

EV - Cost of choice

20
Q

Value of decision trees

A

gets managers to think through options
probability of different outcomes
and the financial consequences - which are accurately estimated

21
Q

influences on relationship with stakeholders

A

business objectives
management and leadership styles
size of business
market conditions power of stakeholder groups
government policies

22
Q

How to manage the different relationships with different stakeholders

A

Excellent communication - especially during periods of change within the business
Consult with different stakeholder groups prior making the decision

23
Q

What is a stakeholder?

A

An individual or group that influences and is affected by the activities of an organization

24
Q

Distinction between stakeholders and shareholders

A

stakeholders - have an interest in the business but do not own it
shareholders - own the business + benefit directly from increases in value

25
Internal Stakeholder groups
employees managers owners
26
External Stakeholder groups
customers local community shareholders suppliers
27
Value of Stakeholder Mapping
enables managers to: see which stakeholder groups have the greatest interest recognize which stakeholder has the most power to influence decisions
28
What do the values of stakeholder mapping allow managers to do
-focus on managing change - ensure support from most powerful -ensure stakeholders with most interest are involved with decisions -recognize likely areas of conflict - negotiate with groups that may disagree
29
What are shareholders/owners interested in?
- return on investment + profits and dividends - success + growth of the business
30
What are managers/employees interested in?
- rewards (salary/wages) - job security - promotion opportunities
31
What are customers interested in?
- utility from money spent on products - quality product + customer service
32
Advantages of decision trees
- they make managers consider all possible alternative outcomes - snow average expected values and probability of each outcome occurring - they allow for uncertainty - they encourage aquantative app roach
33
Disadvantages of decision trees
- only uses quantitate data + ignore qualitative aspects of decision-making - the probabilities are just estimates - can be difficult to get meaningful data