unit 2-managers leadership and decision making business

manager

a person who is responsible for a business activities and its workers

leadership styles

refers to a leaders characteristics behaviors when directing,motivating,guiding and managing groups of people

delegation

means giving a subordinate the authority to perform particular tasks

autonomy

means allowing a great deal of freedom to make choices in the workplace

Manager-Centred Leadership

means managers make all the decisions

autocratic leadership style

centralizing authority, making decisions alone, and expecting followers or subordinates simply to follow instructions

democratic leadership style

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

laissez-faire leadership style

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

the tannenbaum-schmidit continuum

categorize the range of behaviors from being manager centered where the managers make all the decisions and informs subordinates to being subordinate-centered leadership here managers give workers a large degree of autonomy

tell

managers makes decisions and tell staff about it

sell

managers sells decisions to his staff

consult

-managers present ideas and invite questions from staff
-managers present tentative decisions subject to change
-manager presents problem gets suggestions then makes the decision

joins

-managers ask group to make decisions within the limits they set
-managers allows team to develop options and decide on actions defined by manager

the Blake-mouton grid

An analytical tool to assess leadership style based on the level of interest in the people or task

Country Club Management

high concern for people, low concern for production

Impoverished Management

low concern for people, low concern for production

Team Management

high concern for people, high concern for production

middle of the road management

adequate organization performance is possible through balancing the necessity to get out work with maintaining morale of people at a satisfactory level

produce or perish management

low concern for people, high concern for production

Benefits of Autocratic Leadership

Quick decision making with immediate responses

Drawbacks of Autocratic Leadership

Decisions don't benefit from workers' inputs, and they feel demotivated by lack of responsibility

Benefits of Democratic Leadership

Workers feel satisfied and involved, input can be valuable in new situations.

Drawbacks of Democratic Leadership

Decision making can be slow, some decisions may be too private or sensitive (Job losses or secret products),reduction of efficancy and problems of accountability

Benefits of Laissez Faire Leadership

Suitable for high skilled or innovative workers who have new ideas or want autonomy allows for discovery and motivated workers, managers can focus on other tasks

Drawbacks of Laissez Faire Leadership

Lack of feedback or structure could make workers unproductive or demotivated

opportunity cost

is the cost of the next best alternative foregone

scientific decision making

A logical and research-based approach to decision making.

intuition

is making decisions based on gut feeling rather than on data and rational analysis

Risk Calculation

multiplying the outcome of an option wit the probability of its success or failure in business

reward

means greater revenue and profit

uncertainty

managers have to question the reliability of the information that a decision is based upon

Benefits of scientific decision making

Clear sense of direction.
Rational and logical.
More than one person so less bias.
Comparisons between alternatives.
Flexible.
Defend policy as its scientific.

Drawbacks of Scientific Decision Making

Slow process to gather and analyse info.
Opportunities missed in fast moving markets.
Have to judge benefits against costs.
Data may not be reliable.

when is it most appropriate to use scientific method

when you have to gain support from lost of people to make decision as there is data behind it

Benefits of Intuition

1. It can speed up decision making, useful when deadlines are tight
2. It can be helpful to managers when resources are limited

drawbacks of intuition

It can be difficult to convince others that your hunch makes sense.

when is it most appropriate to use intuition

when managers have lots of experience

Descion trees

a model that represents the likely outcomes for business of a number of courses of action showing the financial consequences of each

expected value calculation

multiplying the value of each outcome with its probability and adding them up

Net gain calculation

Expected value - initial cost of decision

Benefits of decision trees

Choices are set out in a logical way
Potential options & choices are considered at the same time
Use of probabilities enables the "risk" of the options to be addressed
Likely costs are considered as well as potential benefits
Easy to understand & tangible results

Drawbacks of decision trees

- Probabilities are just estimates - always prone to error
- Uses quantitative data only - ignores qualitative aspects of decisions
- Assignment of probabilities and expected values prone to bias
- Decision-making technique doesn't necessarily reduce the amount of risk

shareholder

owner of a business

stakeholder

is someone who has an interest in the activities of a business

Internal Stakeholders

employees, managers, owners,shareholders

External Stakeholders

Suppliers, customers, special interest groups, competitors ,the government,local community

Stakeholder mapping (mendelow's matrix)

Mendelow's matrix helps to identify the relationships that should be built with different stakeholders. A stakeholder's position in the matrix depends on two factors:
Power- The power to influence the project.
Interest - The interest which the stakeholder has in the project.
Each stakeholder is placed in one box depending on each factor and then treated differently depending on where they are:
Minimal effort - e.g. Temporary employee on the project for just one day. Give them basic information to meet their needs, but pay little attention to them in decision making and strategy.
Keep informed - e.g. Full time project staff. Regularly communicate with them, particularly things they are interested in. This helps retain good relationships and ensures good motivation and coordination.
Keep satisfied e.g. Board of Directors over a minor IT update project. They have high power so to avoid them exercising the power they should be kept satisfied, for example by ensuring their needs are included in the project scope. As they have little interest only information is given to them as is necessary.
Key players (Keep Close) e.g. Project Customer - Regular communication is maintained and their goals and objectives included as part of the planning.

'Keep Satisfied' of Stakeholder Mapping

high power, low interest beneficial to consult them to try increase interest level (meet their needs)

'minimal effort' of stakeholder mapping

low power, low interest only necessary to make a minimum amount of effort with this group (least important)

'key players' of stakeholder mapping

high power, high interest the business should seek to involve them in decision-making (most important)

'keep informed' of stakeholder mapping

low power and high interest involve these stakeholders and keeping them updated with developments can help build good relations
(show consideration)