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
Modern days leaders
Inspire people
Creating a vision
Shaping the core values
Building effective teams
Leadership is increasingly important
in a business, becoming vital.
Flatter hierarchies,
greater use of delegation
Increasing emphasis
on teamwork
Coaching, support
& empowerment
Leaders
Set the strategy and objectives
Inspire people
Build relationships
Take risks
have followers
Manager
Implement the strategy
Co-ordinate resources
Use their authority to take decisions
Manage risks
Have subordinates
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
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
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
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
Opportunity Cost = is the cost of missing out
on the best next alternative. The benefits
gained of choosing the alternative method.
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