Unit 2.1 - Managers, Leadership and Decision Making

Management

Planning, organising, directing and controlling all or part of a business

Leadership

Functions of ruling, guiding and inspiring other people within an organisation in pursuit of an agreed objective

4 basic functions of management

planning, organizing, directing, controlling

Planning

Looking into the future - may include

- Setting objectives and targets for the business for their area

- Conducting analysis to gather forecasts of key information such as: costs / revenues, incomes, competitors and prices

- Drawing up plans for functional areas within the business

(marketing, finance, HR and operations)

- Estimating the likely resource needs for the proposed plan

Organising

Assemble the resources that they need to carry out the actions set out as part of the planning process. (labour, capital etc)

Directing

Leading - Motivating and communicating with other employees to oversee their behaviour and ensure everyone is working towards the same goals.

Controlling

Setting standards using the company's objectives, and reviewing and reporting performance. This enables managers to identify areas of weakness and implement corrective action.

Ways managers may report on performance

Financial reports - are they on track to make the targeting level of profit?

Employee performance - are the workers productive?

Social performance - how ethical is the business?

Roles of management/managers overview

Planning - Setting objectives

Organising

Motivating (directing)

Communicating (directing

Measuring performance (monitoring)

Developing Employees

The 4 leadership styles

- Autocratic

- Democratic

- Laissez-faire

- Paternalistic

Autocratic leadership style

Leader believes information and decision making is best kep at the top of the organisation:

- Primarily one way communication (downards)

- Minimal delegation or decentralisation (one person has authority)

- Close supervision of employees

Authority

power or ability to carry through an action - typically decision making power in a business

Delegation

The passing authority down the organisational hierarchy - allowing others freedom to make decisions

Empowerment

Provide subordinates with the means to exercise power or control over their working lives

Decentralisation

Passing authority from the centre of the organisation to those working elsewhere in the organisation

Democratic leadership style

a style in which the nominal leader invites the group's participation in decision making:

- Delegates and decentralises

- Employees empowered

- Subordinates encouraged to contribute to decision making

Laissez-faire leadership style

a leadership style characterized by complete freedom for the group in making decisions:

- Leader has minimal input

- Employees are empowered to take majority of decisions

Paternalistic leadership style

leadership style where the leader makes a decision but takes into account the welfare of employees

- Dominant figure who decides what's best

- Leader makes decisions but may consult employees first

Benefits/when to use autocratic leadership

- When rapid decisions are needed

- Business is in crisis situation

- When it is important the same message is given out to everyone in the organisation

- When managers are responsible for a large number of unskilled employees

- When the manager holds the most expertise and experience

Drawbacks/when not to use autocratic leadership

- When making highly complex decisions requiring diverse knowledge and skills

- When leading self motivated employees

- When leading highly skilled employees

- In creative or innovative industries/parts of the business

- When junior employees are expected to develop a full range of managerial skills

Benefits/when to use democratic leadership

- Helps develop skills of subordinates

- Generally results in more highly motivated workforce

- Lower dependence on leader

- Gain more diverse and constructive ideas to aid decision making

- In globalised world it may allow for more responsive and varied decision making

- USeful when employees are highly skilled, creative or innovative

Drawbacks/when not to use democratic leadership

- Can slow down decision making if people opinions must be taken into account

- requires very good communication which may take time to develop

- May be less effective with large workforces especially if they are low skilled

When laissez-faire may be successful

- Manager or leader is one among a number of equals in terms of experience and qualifications

- Workforce is self-motivated and understands the role of managers

- Workforce understands and agrees with organisational objectives

Sometime laissez-faire leadership occurs due to lack of skills of the leader - can lead to organization lacking direction, coordination and planning if the above isn't present

Influences on style of leadership or management

- Type of labour force

- Nature of task

- TImescale of task or decision

- Personality of leader

- Tradition and history of a business

- Size of the business

Blake mouton grid (last paper Y13 2024)

A framework used to identify a leader/managers behavioural style according to their concern for people vs concern for task production

5 sections of the blake mouton grid (last paper Y13 2024)

Country club - High concern for people, low concern for task

Team leader - High concern for people, high concern for task

Impoverished - Low concern for people, low concern for task

Produce or perish - low concern for people, high concern for task

Middle of the road - mid concern for both people and task

Blake Mouton grid - diagram (Last paper Y13 2024)

Blake mouton explanation grid - table (Last paper Y13 2024)

McGregor's Theory X and Theory Y

Theory X - the assumption that employees dislike work, are lazy, avoid responsibility, and must be coerced to perform.

Theory Y - the assumption that employees are creative, enjoy work, seek responsibility, and can exercise self-direction.

Mcgregor's theory x and theory Y - visual aid

Productivity

output per unit of input - more productive when less inputs are needed to create one output

Labour productivity

Output per worker in a given time period i.e a worker makes 100 units an hour is more productive than a worker making 80 units per hour

Labour productivity formula

Output per period / number of employees per period

Tannenbaum Schmidt Continuum

An analytical tool to assess management style based on amount of authority delegated by managers. Shows there is a range of style rather then simply authoritarian or democratic

Four main sections of Tannenbaum Schmidt Continuum

Tell - Sell - Consult - Joins

Tell section of Tannenbaum Schmidt Continuum

Manager makes decisions and tell staff about it, no delegation, similar to autocratic style of management

Sell section of Tannenbaum Schmidt Continuum

Manager sells decision to staff - will retain decision making power, little delegation - may more paternalistic but still more autocratic

Consult section of Tannenbaum Schmidt Continuum (3 parts of continuum)

- Manager present ideas and invited questions

- Manager presents tentative decision subject to change

- Manager presents problems, gets suggestions then makes decisions

Overall more delegation - getting more paternalistic and eventually democratic

Joins sections of the Tannenbaum Schmidt Continuum (2 parts of the continuum)

- Manager asks group to make decision within limits they have set

- Manager allows workers to function and develop options and make decisions defined within limits of a senior manager

Overall now democratic and laissez faire - fare more freedom, delegation and subordinate centered

Tannenbaum Schmidt Continuum (Diagram)