Unit 2:Management, Leadership, Decisionmaking

What is the difference between management and leadership?

-Management involves organising, planning and coordinating resources

-Leadership involves influencing and motivating people to achieve goals

What is the difference between management and leadership, in terms of risk?

Managers limit risk, leaders take risks

What is autocratic leadership?

A style where the leader makes decisions alone and expects obedience

What is paternalistic leadership?

A style where the leader acts in the best interest of employees while retaining control

What is democratic leadership?

A style where decisions are made with employee input and participation

What is laissez-faire leadership?

A hands-off style where employees make most decisions independently

What is the Tannenbaum Schmidt continuum?

A model showing a range of leadership behaviours based on how much authority a leader uses vs how much freedom is given to subordinates

What does the Tannenbaum Schmidt continuum suggest about leadership?

Leadership is a spectrum from telling to delegating, based on situational needs

What factors influence leadership style?

-The task

-Organisational culture

-Employee skills

-Time pressure

Why is it important to understand different management and leadership styles?

Helps choose the most suitable approach for different teams and situations

How can the effectiveness of leadership styles vary?

Some styles suit routine tasks, others support creativity and motivation

What is scientific decision making?

Making decisions using data and a logical process.

What is intuition-based decision making?

Making decisions based on gut feeling or experience.

What are the benefits of using data in decision making?

-Reduces uncertainty

-Improves consistency

-Helps justify decisions

What are the risks of using data in decision making?

Data may be outdated, biased or incomplete.

What are the benefits of using intuition in decision making?

-Useful in fast-moving or uncertain situations

-Builds on experience

What are the risks of using intuition in decision making?

Can be biased, emotional or irrational

What is a decision tree?

A visual model showing possible outcomes, their probabilities and values

What is expected value in a decision tree?

The weighted average of outcomes in a decision branch

What is the formula for expected value?

Expected value = (Outcome 1 × Probability) + (Outcome 2 × Probability)

What is net gain in decision tree analysis?

Net gain = Expected value – Cost of the decision

What is the formula for net gain?

Net gain = Total expected value – Costs

What is risk in decision making?

The possibility that the outcome won’t be as expected

What is reward in decision making?

The potential benefit gained from a decision

What is uncertainty in decision making?

When future outcomes or probabilities are not known

What is opportunity cost in decision making?

The benefit lost from the next best alternative not chosen

What are the influences on decision making?

-Mission,

-Objectives

-Ethics

-External environment

-Competition

-Resources

How can mission influence decision making?

Guides the direction and long-term priorities of decisions

How can objectives influence decision making?

Provides measurable goals that shape decisions

How can ethics influence decision making?

May restrict certain actions or prioritise ethical approaches

How can the external environment influence decision making?

Includes changes in the market, economy or legal environment

How can competition influence decision making?

May require faster or more innovative decisions to stay competitive

How can resource constraints influence decision making?

Limits available options based on time, money or staff

What is a stakeholder?

An individual or group affected by or interested in business decisions

Why must businesses consider stakeholder needs when making decisions?

To maintain support, avoid conflict and improve outcomes

What is stakeholder mapping?

A model used to classify stakeholders by their power and interest

What are the two axes on a stakeholder map?

Power (influence) and interest

What does high power and high interest indicate in stakeholder mapping?

Key players — manage closely

What does high power and low interest indicate?

Keep satisfied

What does low power and high interest indicate?

Keep informed

What does low power and low interest indicate?

Monitor with minimal effort

What kinds of stakeholder needs may overlap?

-Employees and customers may both want quality products

-Shareholders and managers may want profit growth

What kinds of stakeholder needs may conflict?

-Shareholders may want cost cuts while employees want higher wages

-Environmental groups may want sustainability, shareholders profit

How can businesses manage relationships with different stakeholders?

By identifying needs

-Prioritising key stakeholders

-Balancing interests

What is the role of communication in stakeholder management?

Builds trust, provides clarity and prevents misinformation

What is the role of consultation in stakeholder management?

Allows input into decisions, improves acceptance and alignment