A-Level Business Studies key content part 3

what is an autocratic leader

leader makes a decision without consultation

what is a democratic leader

consults his team but makes the final decision

what is a laissez-faire leader (to leave alone)

leader allows his teams to makes decisions

what is a paternalistic leader

acts in a fatherly way towards the workforce- making decisions based on needs and wants of business/ workforce

what is a bureaucratic leader

works to rules and regulations “by the book”, culture is led by the rules

what is level 1

Manager makes decision, announces it, expects compliance.

what is level 2

Manager decides, persuades team, seeks commitment.

what is level 3

Manager presents decision, invites questions and feedback.

what is level 4

Manager presents tentative decision, considers suggestions seriously.

what is level 5

Manager presents problem, accepts group decision as final.

what is level 6

Manager outlines boundaries, subordinates decide independently.

what is level 7

Full freedom, subordinates define problem and make decisions.

what does scientific decision making state

managers need to maximise reward and minimise risks

what decisions do managers need to make right

people

money

materials needed

machinery

risk and reward of finances

reward: could make more money than anticipated

risk: lose money or not make as much as expected

risk and reward of reputation

reward: could enhance reputation of business + investment

risk: could ruin business’s reputation

risk and rewards effect on people

reward: could attract good staff in future

risk: could lose good staff

decisions are either…

strategic or tactical

strategic decisions have which qualities

more resources

long term

difficult to reduce

mainly given to managers/superiors

tactical decisions have what qualities

less resources

short term

easier to reverse

taken by middle and junior management

decision making is based on which 3 assumptions

data

experience

hunch/gut feeling

benefits of scientific decision making

clear direction, based on logic, easier to back up, decisions can be changed

when is intuition used in business

by small business owners, more experienced=better judgement, can lead to creative solutions

when are hunches/gut feelings used in business

too much data to be collected, time consuming, data could be flawed