3.2 Managers, Leaders & Decision-Making

3.2 Managers, Leaders & Decision-Making

1. Leadership is the way in which one person influences the behaviour or actions of other people.

   • Leaders command and control a business and to take decisions

2. Modern days leaders

   • Inspire people
   • Creating a vision
   • Shaping the core values
   • Building effective teams

3. Leadership is increasingly important in a business, becoming vital.

   • Flatter hierarchies, greater use of delegation
   • Increasing emphasis on teamwork
   • Coaching, support & empowerment

4. Leaders

   • Set the strategy and objectives
   • Inspire people
   • Build relationships
   • Take risks
   • have followers

5. Manager

   • Implement the strategy
   • Co-ordinate resources
   • Use their authority to take decisions
   • Manage risks
   • Have subordinates

6. Leadership Styles (how leaders behave)

   • Authoritarian leader
     • Focus on power
     • communication is top-down
     • Command & Control
     • Reward & penalties
     • Little delegation
   • Paternalistic Leader
     • Leader decides what is best for employees
     • Mayo (motivation
     • Akin to parent
     • little delegation
     • softer than authoritarian
   • Democratic Leader
     • Focus of power is more with the group as a whole
     • Employees have greater involvement
   • Laissez-faire Leader
     • Little input into day-to-day decision-making
     • Conscious decision to delegate power
     • Managers/employees have the freedom to do what they think is best

7. Tannenbaum and schmidt

   • Range of potential leadership and management Styles
   • TELLS
     • Manager makes decisions & tells staff
   • SELLS
     • Manager sells decisions to his staff
   • CONSULTS
     • Presents ideas invites questions, gets suggestions and makes decisions
   • JOINS
     • Ask a group to make decisions within a limit

8. Blake Mouton Grid

   • Low concern for people & Low concern for task = impoverished management
   • Low concern for people & High concern for task = Task management
   • High concern for people & low concern for ask = Country club
   • High concern for people & high concern for task = Team management

9. Decisions are at the heart of the business

   • Hunch = based on intuition, gut feeling and experience, quick and cheap.
   • Scientific = based on data and analysis, time-consuming and costly, no 100% certain of right decision, big data
     • Expectations of all outcomes

10. Opportunity Cost = is the cost of missing out on the best next alternative. The benefits gained of choosing the alternative method.

11. Decision tree is a mathematical model used to help managers make decisions (scientific).

    • Used to estimate the probabilities to calculate likely outcomes. Calculating these estimates helps to decide whether the net gain from a decision is worthwhile (and expected value)
      • Expected value = Financial value of outcome (multiply £ by probability)
      • Net gain = Value gained from taking a decision. (Add together the expected value of each outcome and subtracting the costs associated with the decision
    • Benefits of a decision tree
      • Set out in a logical way
      • Options & choices considered at the same time
      • Probabilities enable the "risk"
      • Likely costs are considered
    • Drawbacks of a decision tree
      • Just estimates prone to error
      • Quantitive data only, ignores quanlitive data
        • Bias?