Business Unit 2

• Managers


  Plan, organise, and co ordinate people and resources to follow orders
• Leaders


  Decide on a direction for the firm, inspire & motivate staff to acheive the aims set
• Role of a manager

  * Set objectives * Analyse date for future decisions * Making decisions (e.g. rewards, expansions) * Reviewing (e.g. appraisals, decision making)
• Influences on management and leadership styles

  • Company structure and the span of control
  • Particular situation 
  • Organisational culture and structure 
  • Nature of the tasks involved
  • Employees and their skills & abilities 
  • Group size
  • Personalities and skills of managers and leaders 
  • Time frame
• Theory X


  An authoritarian approach to leadership, adopted by leaders who believe that workers dislike work and therefore need to be controlled to improve their performance
• Theory X leadership approach

  1. Tell workers what to do

  2. Supervise workers doing it
• Assumptions of Theory X managers about workers

  • Are lazy, dislike work and are motivated by money
  • Need to be supervised and controlled or they will underperform
  • Have no wish or ability to help make decisions or take on responsibility
  • Aren't interested in the needs of the organisation and lack ambition
• Theory X


  • Can be useful in a crisis or where there are constantly changing workforces and workers need clear instructions and supervision
• McGregor's Theory Y

  • This is an approach to leadership that assumes that workers have both initiative and self-control, which can be used to achieve the goals of a business. Consequently, the role of management is to maximise the commitment of the workers. 
  • Theory Y managers assume that workers:
  • Have many different needs, enjoy work, and seek satisfaction from it 
  • Will organise themselves and take responsibility if they are trusted to do so
  • Think that poor performance is due to boring and monotonous work and poor management 
  • Wish to, and should, contribute to decisions
• Authoritarian Leadership Style

  • Hold onto as much power and decision making as possible
  • focus of power is with the manager
  • communication = top down and one way
  • used with unskilled workers, who are not trusted, and ideas are not valued
• Democratic Leadership Style

  • focus of power is on group as a whole
  • employees have greater involvement in decision making {:( potentially slows down decision making}
  • emphasis on delegation and consultation - but leader still makes the final decision
  • most effective with skilled, free-thinking, and experienced subordinates
  • :) better motivation and morale
• Paternalistic Leadership Style

  • Leader decides what's best for employees
  • Links with Mayo - addressing employees needs
  • little delegation
  • softer form of authoritarian leadership - results in better motivation and lower staff turnover
  • explains specific reasons as to why they've taken action
• Laissez-faire Leadership Style

  • leader has little input in day to day decision making
  • concious decision to delegate power
  • managers / employees have freedom to do what they think's best
  • Effective when staff are ready and willing to take on responsibility, they are motivated, and can be trusted to do their jobs
• Management theories


  Tannenbaum-schmidt continuum theory and the blake moulton grid
• the continuum represents a range of actions related to the...


  * degree of authority used by the manger

  * area of freedom available to the non-manager
• Four styles of leadership identified by the tannenbaum schmidt continuum

  1. TELLS - leader identigies probs, makes decisions, announces and expects implementation
  2. SELLS - leader makes decision, attempts to overcome resistance thru discussion & persuasion
  3. CONSULTS - leader identifies probs and presents it to the group, listens to advice and suggestions before making decisions
  4. JOINS - leader defines probs and passes on the solving & decision making to the group
• Position on the Blake Mouton grid is mapped in terms of


  * Concern for people [High - 9, Low - 1]

  * Concern for task [High - 9, Low - 1]
• Impoverished Management 


  Concern for people - 1

  Concern for task - 1
• Features of impoverished management

  Laissez-faire style, minimal effort on management, hoping to avoid blame for any errors
• Country Club Management 


  Concern for people - 9

  Concern for task - 1
• Features of country club management

  Focus on creating safe, comfortable working environment, minimal conflict
• Task Management


  Concern for people - 1

  Concern for task - 9
• Features of task management

  Autocratic style, consistent with McGregor Theory X. Workers simply have to complete tasks - nothing else
• Team Management

  Cocnern for people - 9

  Concern for task - 9
• Features of Team Management

  Staff closely involved in decision-making and feel valued. consistent with McGregory THeory Y
• Middle of the road management


  concern for people - 5

  concern for task - 5
• Features of middle of the road management 


  compromises made to achieve acceptable performance, thought to be the less effective leadership style
• The Blake Mouton Grid = effective analysis of leadership styles due to its format which makes it more applicable to a wider audience. also highlights the motives and impacts of each style. helps managers and leaders assess the effects of their leadership styles and if they should adapt it
• The Tannenbaum schmidt continuum concentrates more on delegation and freedom in decision making to subordinates and there by on the team development. As teams freedom increases, the managers authority decreases. Positive way for both teams and mangers to develop delegation skills
• Scientific decision making

  • set objective
  • gather and interpret info [market research]
  • seect the chosen option
  • implement the decision
  • review
• Advantages of scientific approach

  • provides clear sense of direction
  • decisions are made and based on business logic
  • flexible - at any stage it can be reviewed and changed if needed
• Intuition decision making [non-scientific]

  • ability to understand something without the need of conscious reasoning - a 'hunch'
  • making decisions with a lack of evidence to prove it is the right thing to do
  • appropriate for when quick decisions need to be made as it provides quick results
  • mainly used in smaller businesses
• Scientific v Intuition approach depends on: 


  * speed of decision

  * info available

  * size of business

  * predictability of situation

  * character of person/culture
• Characteristics of decision trees:

  • Good at choosing between several courses of action
  • provide highly effective structure within which you can lay out options and investigate the possible outcomes of each
  • estimates and probabilities used to calculate likely outcomes
  • helps decide whether the net gain from a decision is worthwhile
• EXPECTED VALUE


  ESTIMATED FINANCIAL EFFECT X PROBABILITY
• NET GAIN


  EXPECTED VALUE OF EACH OUTCOME - COSTS ASSOCIATED WITH THE DECISION
• Advantages of decision trees

  • gives you a decision
  • evidence to gain a source of finance
  • set out logically
  • easy to understand and gives tangible results
  • costs and benefits considered
  • assesses risk
  • direct comparison between potential choices
• Disadvantages of decision trees

  • could be inaccurate/unreliable as only estimates
  • doesnt necessarily reduce the amount of risk
  • prone to bias
  • uses only quantitative data - ignoring qualitative aspects such as effects on motivation & brand image
• influences on decision making:

  • missions and objectives - do decisions match?
  • Ethics - act morally correct
  • Risk involved
  • The external environment [e..g demographics, the environment, incomes, competition etc.]
  • resource constraints [e.g. info, time, labour, materials] - may be costly to overcome these challenges
  • stakeholders
• stakeholder


  anyone with an interest in the business and its operations