Unit 2.1 business

 Unit 2.1 - Understanding management, leadership and decision making

Overview of key concepts - 

Leaders have a vision

Managers have to turn that vision into running the business on a day to day basis 

Managers use the 'management process' - planning, organising, coordinating/ directing and controlling

They use data and information to help with making decisions

Key leadership styles include - autocratic, democratic, Blake Mouton grid, Tannenbaum Schimdt continuum

Key influences on the leadership style - employees, culture, the nature of the task, personalities involved.

What managers do -

Setting objectives, Analysing, Leading, Making decisions, Reviewing

Management process -  

Management is the process of getting things done through others (Stewart)

Process is;

Controlling - 

Reviewing progress of organisation.

Changing plans if circumstances change.

Using budgets or appraisals to control people and money

Planning -

What does the organisation want to do?

Where is it now?

What new products are coming up?

(Objectives, mission statement, etc)

Organising - 

What resources are needed to meet objectives?

Which organisations need money (in budget)

Any capital expenditure and investment appraisal requirement

Coordinating/directing - 

Which department needs which resources.

Ensuring projects run to time scales.

Ensuring objectives are met

Setting objectives - 

Managers will set goals for the group of subordinates.

They will decide what work needs to be done to meet these goals.

Managers will divide the work into manageable activities and select the best workers to get the tasks done.

Managers will motivate and communicate with the team to ensure that the objectives are met.

Managers will decide how the objectives are to be measured and what the targets should be.

Managers will develop subordinates so that they can complete their objectives

(adapted from Peter Drucker's basic description of the role of a manager)

Analysing data - 

To be able to measure, organise, motivate and develop their subordinates managers need to be able to analyse data. This would include:

Identifying where the organisation or department was now (could use SWOT and or PESTLE)

Where the organisation or department wanted to be 

How it could get there

Is what they are doing aiding the transition?

Managers need to control costs

Information comes in many forms and tells managers different things - 

Where we are - analysing existing position 

How to get where we want to be - developing courses of action

Where we are on course to get where we want to be - review progress

All of this allows managers to use information to make better decisions

What is good information - 

Data to aid decisions comes in many different forms - but what is good quality information for a manager?

Data should be:

Reliable, Timely, Quantity, relevance and validity

Types of data that can be used - 

Analyse existing position - SWOT analysis, PESTLE  analysis

How to get where you want to be - Setting budgets, investments, appraisals etc.

Reviewing -

Managers review decisions and data frequently to ensure that the organisation is on track to meet objectives.

If plans are not meeting objectives then the plan needs to be altered.

It is a waste of resources to continue with a plan which does not allow an organisation to meet its objectives.

Many internal and external pressures can cause a decisions to be changed.

Reasons for reviewing a decision - 

Internal - depends on size of business

Corporate culture not ready for change.

Skills of employees insufficient.

Lack of financial controls.

Insufficient funds available for decision to be completed.

Leadership or management style.

External - depends on size of business

Political changes (local, regional, national or international)

Changes to environmental attitudes.

Changes to social attitudes.

Changes to technology.

Changes to the economy.

Changes to legislation (local, national or international)

Differences between leaders and manager - 

Leaders:

Look to the future

Are willing to break the mould, innovate

Have a vision

Managers:

Focus on the present

Maintain the status quo

Are implementers

Leading - 

Most common traits of a leader have been identified by Stogdrill (1974) as being: 

adaptable to situations, ambitious and achievement orientated, assertive, decisive, dependable, energetic, persistent, self confident, tolerant of stress and willing to assume responsibility. 

Types of management and leadership styles and influences on them -

Authoritarian - close controls, direct supervision

Laissex faire - power to make decisions given to subordinates

Paternalistic - parental figure caring for workforce

Democratic - sharing decision making through groups

Bureaucratic - must follow rules and procedure

Tannenbaum Schimdt continuum

Blake Mouton grid

Mcgregor X - managers believe workers are lazy and need close supervision

Mcgregor Y - managers believe workers are self motivated and as such can solve problems

Differences - 

Authoritarian:

Tells employees what to do

Leader keeps control

Leader does not 'listen' to staff but has their own ideas

Advantages:

Decisions are made quickly

Control is centralised

Disadvantages:

Can demotivate staff because they are not included in decision making

Leader does not benefit from views and experience of staff

Democratic:

Listens to employees

Takes views and opinions from subordinates

Leader still makes decision but these have been discussed first

Advantages:

Staff feel motivated, included in decision making and more committed

Better decisions made because more ideas taken on board

Disadvantages:

Can take more time to make decisions

Blake Mouton grid - 

Grid analyses different styles based on the leaders' concern for people and concern for tasks.

It identifies how 'people orientated' the leaders are or how 'task orientated' (having a high concern for production) they are.

People orientated:

Pleasant environment to work in

staff happy

tasks may not be completed quickly enough or with enough accuracy

Task/production orientated:

Can get tasks get done quickly

Can get task done accurately

Can lead to de motivated staff

Can loose 'goodwill' of staff because they are not happy

Tannenbaum Schmidt continuum - 

The continuum helps show the range of management styles which are available to managers

Helps to identify who has the most input in decision making - managers or staff

It recognised that sometimes managers need to tell subordinates about decisions and sometimes subordinates can have a greater input to the decisions (to tell or to share)

Effectiveness of different styles of management and leadership - 

it depends on- 

resources available (if the resources are limited then the decision may not be effective)#

Do staff recognise the need for the decision or the change 

How much support for the decision is there within the board of directors?

Summary - 

Mangers manage businesses - they set objectives (decisions where the business should go) they organise the resources to allow the objectives to be achieved - they co ordinate the resources (people, machinery, skills and etc) they control costs, resources, etc and they review and adjust accordingly.

Managers use a range of data to help make decisions. They need to know where the business is now, where it wants to go and whether they are on course to get there

The data has to be reliable, timely and relevant.

There is a difference between leaders and managers - one sets strategy and visions and the other manages getting there

There are a number of theories to help explain leadership and management styles, but its not always that simple in practice.

The leadership or management style may not be chosen - it may have to be adopted because of external or internal problems.