Unit 2 Leadership, Management And Decision Making

Question 1

Leadership

Answer 1

Deciding on the direction for a business or a department or functional area, setting objectives that reflect this, and inspiring and motivating staff to achieve these objectives

Question 2

Management

Answer 2

Getting things done by planning, organising and co - ordinating people and resources

Question 3

Scientific Decision Making

Answer 3

A logical and research-based approach to decision making

Question 4

Intuition

Answer 4

The ability to understand something without the need for conscious reasoning; similar to ‘hunch’; a gut feeling held by a manager that is based not on scientific decision making but on the personal views of the manager

Question 5

Opportunity Cost

Answer 5

The ‘real cost’ of taking a particular action or the next best alternative foregone, i.e. the next best thing that you could have chosen but did not

Question 6

Decision Tree

Answer 6

A tree-like model of the various options available in a decision, including the probability of different consequences and the financial outcomes of each option

Question 7

Expected Value

Answer 7

The monetary value of an outcome of a decision; calculated by multiplying the expected monetary value of the outcome by the probability of that outcome occurring

Question 8

Net Gain

Answer 8

The value to be gained from making a particular decision; calculated by adding together the expected value of each possible outcome of a decision and deducting the costs associated with the decision

Question 9

Ethics

Answer 9

The set of moral values held by an individual or group or organisation

Question 10

Stakeholder

Answer 10

An individual or group or other institution with a direct interest in the activities and performance of an organisation or in a project to be undertaken by that organisation

Question 11

Pressure Groups

Answer 11

Organisations formed by people with a common interest or shared goal, who join together to further their interests or achieve their goals by putting pressure on the general public, governments, or businesses. Examples include friends of the earth and greenspace

Question 12

Externalities

Answer 12

Costs and benefits that occur as a result of a firm’s activities, but which are not recorded in its accounts. For example pollution and congestion may be caused by a firm’s activities, but the costs are borne by the local community and not by the firm