Business Handout 5

• what is meant by management

  process of reaching organisational goals by working with and through people and other organisational resources
• explain the functions and roles of management

  planning - choosing tasks that must be peformed to reach goals, outlining how tasks must be done and when they should be done

  organising - assigning tasks to various individuals or groups

  controlling - gather information meausring peformance and compare
• explain what is menat by management by objectives MBO

  process where employees and superiors come together to identify common goals, employees set their goals to be acheieved, everybody within organisation has clear understanding of aims or objectives of organisation as well as their own roles and responsibilities
• what is the MBO process

  review objectives for whole business

  set objectives for management in differnet functions

  set objectives for individual department and workers

  monitor progress to see if objectives are being reached

  evaluate peformance and give reward
• what are the advantages of MBO

  improved management control as managers know who is doing what and what they are meant to be achieveing

  improved financial control as part of setting is monitor expenditure and recvenue, changes from variances budgeted can be explained and reacted to

  everyone is working towards a common goal, can motivate workforce, increase employee job satisfaction, involved in whole process

  improve communication systems
• what are the disadvantages of MBO

  management time is spent on process of setting objectives rather than managing the organsiation

  business environment can change so objectives can be unrealistic

  if all levels of hierarchy arent involved can lead to demotivation and breakdown of employee relationships

  may focus too much on short term goals ignoring long term goals
• Explaing McGregor Theory X

  must always be supervised or quality will fall

  money is only motivator, little ambition

  do not want to be involved in decision making process

  only respect type of manager who tells them exactly what to do

  they want to be unknown to management
• what are the consequences of Theory X management

  strict control of formal methods of communication

  responsibilities and tasks must be clear and unambiguous

  supervisors must maintain quality

  high level of dependence on senior management of decision making
• Explain McGregor Theory Y

  seek more than financial satisfaction

  ambitious, willing to train and increase chances of promotion

  want to be seen and noticed, rewarded

  want more responsibilities, more efficient
• what are the consequences of Theory Y management

  requirement of training

  need promotion structures

  flexible working practices

  setting up formal communication channels
• what is meant by leadership

  the way in which one person influences the behaviour or actions of other people, leader needs to have a number of charecteristics to help lead their business

  communicative, commitment,creativity

  a good leader adapts to the needs of the employees through identifying problems and creating solutions
• explain autocratic and democratic leadership

  autocratic is where manager sets objectives, allocates tasks, poor levels of motivation, dissatisfied with leader, tend to be theory X manager, no employee involvement in decision making

  democratic is where leader consults with subordinates in decision making, communicate effectively with employees, motivated workforce, promotes creativity and better quality decisions
• explain laissez-faire and paternalistic leadership

  paternalistic is where there is no employee involvement, presuade employess that decisions made are in the best of their intetrest, consider welfare of employees, justify, explain decisions made

  laissez-faire is where leadership allows employees to carry out activities freely, relaxed atmosphere, few guidelines and directions, poor productivity, lack of motivation, little incentive to work hard
• explain leadership theory F.fielder

  did not believe that leaders where very good at changing or even adapting their style, he believed you cant change the style of the leader but you can change the person, two factors leadership style and situationcal control, first step is identifying the leadership style, measured using a scale, if total score is high then relationship orientated leader (positive,connections, good at complex decisions) and task orientated leaders (negative, relationship building is a low priority)
• what is meant by situational control in F.Fielder theory

  determining the situationcal control in particular situation after leadership style, either structured (enormous trust, respect, tasks are clear, followers accept leaders power) or unstructured (trust doesnt exist, rebellious atmosphere)
• outline P.wright and D.Taylor theory

  it is possible to improve a leaders peformance through education, a good leader is one who adapts to the needs of the employees, concerned with improving leadership skills
• what are the three ways in measuring workforce peformance

  labour productivity - total output / average number of employees

  labour turnover - (number of staff leaving firm / average number of staff ) x100

  absenteeism - (number of staff absent /number of staff employed )x100
• give some methods of improving productivity

  increase investment in better machinery, better processes leads to more output per worker

  train workforce so they make fewer mistakes and produce more

  improve employee motivation - Herzberg theory

  better role of management, increase productivity, effectively managing staff, organising work well
• what are the internal and external causes of labour turnover

  poor recruitment and selection process which may employ wrong people that dont meet their needs and interests, ineffective motivation and leadership, low wages compared to similair workers

  more local vacancies arising, better transportation elsewhere for workers and better pay
• what are the problems of absenteeism and how can it be tackled

  still have to pay absent workers, motivation affects others causing more stress if have to do moer work, output and productivity may fall, late delieveries damaging reputation

  understand the causes, set targets and monitor trends, have a clear sickness and absence policy, provide rewards for good attendance, consider the wider issues of employee motivation
• what is meant by an organisational structure and whys it important

  defines how activities such as task allocation, coordination and supervision and roles and responsibilities of employees and management are organised within a business

  aids recruitment, see where cuts can be made, know job titles and roles, see communication, see where to delegate work, see whose responsibile for you
• define these key terms

  authority - the power managers have to direct subordinates and make decisions

  responsibility - a duty to perform or complete a task assigned by someone that one must fulfill

  chain of command - lines of authority in business, orders and instructions are passed down by director, feedback is passed up

  levels of hierarchy - different levels of organisation representing the degree of authority and responsibility
• define these key terms

  span of control - number of employees who are accountable toe ach individual manager, narrow means accountable for small number of employees and wide is a large number of employees

  empowerment - when power or authority is given to employees so they can make their own decisions

  delegation - assigning others authority for particular functions, tasks
• define these key terms

  centralisation - decision making firmly at the top of hierarchy, easier for organisations to implement common policies

  decentralisation - decision making is spread out, motivate employees

  layering - adding a hierarchal layer, taller organisational structure

  delayering - remove a hierarchal layer, flatter organistional structure

  subordinates - employees who report to staff higher up the hierarchy
• what is the difference between tall and flat organisational structures

  tall - many levels of hierarchy, narrow span of control, oppurtunites for promotion, lines of communication are long

  flat - few levels of hierarchy, short lines of communication, wide span of control, tasks must be delegated, increased workload for managers
• what are the pros and cons of a flat structure

  increased motivation as employees can be given delegation of authority, decisions are made more quickly, communication is quicker, firm responsive to change, empowermnet of workers, fewer layers gives fewer staff = fewer costs

  loss of centrol control of workforce due to wider span of control, differnet departments may not be working towards the same objective

  fewer promotional oppurtunities
• what are the pros and cons of delayering

  lower costs as fewer managers are required, more authority passed down hierarchy, more empowerment, improved decision making and quicker communication levels, less department rivalry as workforce is more organised in teams

  negative impact on motivation due to job losses, job insecurity, period of distruption may occur when people take on new responsibilities and roles, remaining mangers will have a wider span of control increasing workload
• what are the pros and cons of a centralised structure

  easier to implement common policies for whole business, economies of scale easier to achieve, quicker decision making easier to show strong leadership

  lack of authority down hierarchial structure may reduce manager motivation, local and junior managers are much closer to customer needs
• what is the difference between empowerment and control

  empowerment is defined as giving authority / responsibility to employees to make decisions and control their own activities

  control is about emposing decisions on workers who have little say in how their work should be carried out
• what are the benefits / drawbacks of a hierarchial structure ( tall / flat)

  simple to understand, gives business a strong sense of direction as control starts from top, clear lines of communication and command, allows specialists to manage in their relevant functional areas, encourages employees to seek promotion

  decison making can become slow, departments can argue with each other e.g. finance and marketing, employees not enouraged to develop overview of business, difficult to adapt to change and meet new demands,
• what is meant by a matrix structure

  individuals work across teams and projects as well as within their own function department, gets people with particular skills to work together in project teams, indiviudls within team have own responsibility
• what are the pros and cons of a matrix structure

  flexible, decision making can be quicker, ideas encouraged, improved oppurtunities for staff development, greater motivation as it llows individuals to use skills within different projects

  potential conflicts of authority due to employees having two or more bosses, multiple chains of command may cause confusion, difficulty coordinating resources across functions and project teams, may neglect functional responsibilities and is costly
• what is meant by employee/employer relations and contract of employment

  describes the relationship between workers and employers in a business

  within 12 weeks of starting employement must be provided, states level of pay, holiday entitlement, pension rights, disciplanary procedures, length of notice period, type of contract
• what is meant by equal oppurtunities

  ensures that their is no discrimination against individuals or groups on the basis of their gender, sexual orientation, age, ethnicity, physical disability.
• explain impact of equal oppurtunities legislation on employers and employees

  incur high costs as need to be careful in the way they advertise jobs and carry our recruitment and promtion processes in order to ensure they arent discrimnating in any way, can lead to fines if dicrimate happens and damages reputation, adapt premisies to cater needs of disabled people e.g. installing ramps for wheelchair access, however wider choice of employees who will be happy in atmosphere free from discrimination, more motivated and satisfied with job
• what is meant by dismissal

  this is where employer ends the employment contract, dont always have to give notice
• what are the 4 legislations of equal oppurtunites

  equal pay acts 1970

  sex discrimination acts 1975 and 1986 -illegal to discrimanate based on gender, conducts investigations into illegal sexual discrimnation

  equal pay - illegal to discrimanate on grounds of race, colour, nationality and ethnic origin in education, housing

  disability discrimination act 1995 - discrimination against disabled people
• what is meant by a trade union and collective bargaining

  organisation that employees pay to join in order to gain greater power and security at work

  collective bargaining - by joining trade unions workers have more chance of having a voice and influence whereas an individual worker has very little power to influence decisions
• what are the benefits and drawbacks of trade unions to EMPLOYEES

  more powerful voice when bargaining as a group e.g. pay rises can threaten industrial action, workers having their individual rights better protected and protect workers from exploitation, negotiation of pay conditions, helps ensure high standards of health and safety, union members benefit from wide range of services e.g. welfare services

  pay a fee to be a member, represents large group of people, individuals may not agree with all decisions made
• what are the benefits and drawbacks of trade unions to EMPLOYERS

  cheaper and quicker to bargain with one trade union rather than indivdual workers, workers better motivated if their interests are being looked after by trade unions, trade unions help negotiatie productivity deals, increases output enables firm to afford higher wages

  if unions go on strike or work to rule then loses productivity, results in higher wages increasaing labour costs