Managers, Leadership and Decision Making 3,2

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  • Managers, Leadership and Decision Making 3.2
    • Understanding Managers, Leadership and Decision Making
      • Managers
        • Role of Managers
          • Involved in key organisational decisions
            • Setting company policy around performance targets
        • Planning
          • Setting targets
          • Budgeting
          • Forecasting
          • Estimating resources needed
        • Directing
          • Giving guidance and instruction
          • Motivating employees
          • Delegating authority
        • Controlling
          • Reporting on performance
          • Monitoring employee performance
          • Enforcing company policy and rules
          • Monitoring targets and budgets
        • Organizing
          • Coordinating teams
          • Allocating resources
          • Giving instructions to subordinates
      • Theories
        • Trait Theory
          • The belief that leaders and managers hold certain traits that distinguish them from other people
          • Disagreements about the exact traits that constitute a successful leaders
          • Suggestions that successful leaders possess very different traits from one another
        • Behavioral Theory
          • Suggests there is an appropriate style of management or leadership determined by the context
          • Different theories explore behavioral management and consider different styles based on a number of different factors
      • Leadership
        • Autocratic
          • + Focused on getting the task done
          • + High levels of control suitable for unskilled workforce
          • + Speeds up decision making process
          • +Suitable for implementing a clear vision
          • - Can lead to low levels of motivation
          • - No opportunity for employees to be involved in decision making
          • - No opportunity to collect ideas and opinions from workforce
          • - Employees might not feel that they have a stake in the business
        • Democratic
          • + Develops a team spirit
          • + Allows manager to collect ideas and opinions from workforce
          • - Decision making can take a long time
          • - Employees may not see the 'bigger picture' and not vote in the businesses interest
        • Laissez-Faire
          • + Allows employees autonomy to make their own decisions
          • - Lack of control over the workforce
          • - Tasks may not be coordinated very well
        • Factors to take into account when deciding leadership style
          • Labour force
          • Nature of the task
          • Time scale
          • Personality
          • Tradition
      • Models
        • Blake Moulton Managerial Grid
          • Leadership approaches based on concern for production and concern for people
          • Country Club
            • 9,1 High concern for people, little concern for production
            • A relaxed working environment
            • Manager is concerned with relationships and motivation of employees
            • Task may not get done
          • Team Leader
            • 9,9 High concern for people, high concern for production
            • Should be highly successful as all needs are aligned
            • Employees feel involved and have a stake in the success of the business
          • Produce or  Perish
            • 1,9 Low concern for people, high concern for production
            • Authoritarian
            • Driven by targets and getting the task done
            • Cares little for well-being or feelings of employees
          • Impoverished
            • 1,1 Low concern for people, low concern for production
            • Perhaps focused on self and not leading the organisation
            • Dissatisfaction and disorganization
            • Ineffective manager
          • Middle of the Road
            • 5,5 Medium concern for people, medium concern for production
            • Manager might care, but does not get the balance right
            • Neither the task nor employees are completely satisfied
        • Tannenbaum Schmidt Continuum
          • Shows where a managers approach is
          • Ranges from strict authority to employees full freedom
          • Continuum can be used to make choices about which approach to adopt
            • No advice is given on show the approach should be chosen
          • Tells, sells, consults, joins
            • Tells = autocratic boss-centered leadership
            • Joins = empowered subordinate centered leadership
          • Left of the continuum is autocratic with little employee freedom
          • Right of the continuum is laissez-faire leadership with lots of employee freedom
    • Understanding Management Decision Making
      • Decision Making
        • Decision Making Process
          • Set objectives
          • Gathering information
          • Choosing a course of action
          • Implementation
          • Review
        • Decision Making Factors
          • Risk
            • The chance of an occurring misfortune
          • Reward
            • Greater revenue, profit or prestige
          • Uncertainty
            • Question the reliability of the information
          • Opportunity cost
            • Next best opportunity forfeited
        • Data vs Intuition
          • Data
            • + Can help reduce risk in decision making and help identify likely outcomes
            • +Can help compare alternative options
            • - Can be hard to collect or expensive
            • - Data is not always available or reliable
          • Intuition
            • - Without evidence, decisions can be high risk
            • + intuition may come from experience of the manager
              • Useful when making qualitative decisions
      • Influences on Decision Making
        • Objectives and mission of the business
        • Ethics used to guide decisions
        • Level of risk involved
        • External environment as this is not usually taken into account with models
        • Resource constraints and where opportunity cost comes in
      • Decision Trees
        • Model that represents likely outcomes for a business of a number of courses of action
        • Evaluations
          • + Clarifies possible courses of action
          • +Adds financial data to decisions
          • + Makes managers account for risk
          • - Probabilities are often estimates
          • - Doesn't consider qualitative information
          • - Doesn't account for the dynamic nature of business
        • Calculating
          • 1) Add information to the blank tree
          • 2) Multiply each financial benefit by its probability for each outcome and add them together
            • (Probability 1 X Outcome 1) + ( Probability 2 X Outcome 2) = Expected Value
          • 3) If there is an initial cost, subtract this to get the net gains
          • 4) Option that should be taken will have the highest net gains value
    • Role and Importance of Stakeholders
      • Stakeholder Needs
        • Internal Stakholders
          • Employees
              • Meet their targets
              • Opportunity for development
              • Good income
              • Safe working conditions
              • Job security
          • Managers
              • Meet their targets
              • Opportunity for development
              • Good income
              • Safe working conditions
              • Job security
          • Shareholders
            • Ethical business practices
            • Growth of the company
            • Increased value of shares
            • Return on investment
        • External Stakeholders
          • Suppliers
            • Regular trade
            • Fair prices
            • Paid on time
          • Customers
            • Reliable products
            • Good service
            • Value for money
            • Cleat and fair pricing
          • Local Community
            • Employement
            • Investment in local areas
            • No pollution
          • Government Agencies
            • Abide by legislation and rules
            • Fair and open trade
            • Employment opportunities
            • Tax
      • Overlapping and Conflicting Interests
        • Stakeholder interests can sometimes be aligned
        • Satisfying one set of needs can often lead to conflict in others
        • Businesses need to consider where conflicts may arise and how to solve them
        • Managing shareholder and stakeholder expectations are linked
          • Social responsibility
      • Stakeholder Mapping
        • Maps
          • Stakeholder map assesses the interest and power of stakeholders
          • Useful in decision making as they generate discussion and give structure
          • Don't provide businesses with clear solutions on management
          • A - Meets their needs
            • High power, low interest
            • May be key shareholders who are interested in investment returns
            • Satisfy needs but try to increase their interest and involvement in the business
          • B - Key Player
            • High power, high interest
            • May be key  customers who account for significant sales
            • Keep happy, consult and involve them
          • C - Least Important
            • Low power, low interest
            • Ensure some information is available to them
            • Minimal effort required
          • D - Keep Informed
            • Low power, high interest
            • Perhaps local residents who are concerned with actions
            • Communicate key decisions, possibly consult on low impact decisions
        • Stakeholder Engagement
          • Stakeholder conflict can be reduced through communication
            • The extent to this can be determined through mapping
          • Partnership
            • Decisions taken jointly
            • Implement actions together
            • Shared responsibility
          • Participation
            • Effective two-way communication
            • Given responsibility for certain decisions
          • Consultation
            • Collect views and opinions
            • Share ideas and proposals
          • 'Push' Communication
            • Inform
            • One-way communication
            • Emails, newsletters, mailshots
          • 'Pull' Communication
            • Information available if they choose to access it
      • Stakeholder Relationships
        • Internal Factors
          • Management and leadership
          • Objectives
          • Size/ ownership
        • External Factors
          • Market conditions
          • Stakeholder power
          • Government policy

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