3.2 managers leadership and decision making

3.2.3 what is stakeholder?

anyone with vested interest in the activities and decision making of a business

3.2.3 examples of stakeholders

manager, employees, banks, suppliers, community, media

3.2.2 scientific decision making

decisions based on evidence and adopting a systematic approach, rather than a hunch or intuition

3.2.2 opportunity cost

the cost of missing out on the next best alternative, benefits that could have been gained by taking a different decision

3.2.2 why opportunity cost is important

For most businesses resources are limited, when resources are scarce significant decisions about what to spend and where to focus become more risky

3.2.2 what is a decision tree

A mathematical model, used to help managers make decisions, helps to decide whether the net gain from the decision is worth while

3.2.2 probability

the percentage chance or possibility that an event will occur, range between 1 and 0, if all the outcomes of an event are consider the total probability must add up to 1

3.2.2 adv of decision trees

choices are set out in a logical way, easy to understand and tangible results

3.2.2 disadv of decision trees

probabilities are just estimates, no qualitative data, doesn’t necessarily reduce risks

3.2.1 the 2 leadership perspectives

traditional leadership; common & control, decision making

modern view; inspiring employees, creating a vision, shaping core values, building effective teams

3.2.1 why leadership is important

changing organisational structures, rapid changes

3.2.1 leaders Vs managers

leaders; inspire people, build relationships, take risks, have followers

managers; enact the plan, use their authority, manage risks, have subordinates