2.1.1 U NDERSTANDING MANAGEMENT, LEADERSHIP AND DECISION MAKING AQA Business 2 M ANAGERS, LEADERSHIP AND DECISION MAKING Are managers and leaders the same? Think of examples from the worlds of: Sport Music Politics School/college History Part time jobs/work experience

2.1.1 U NDERSTANDING MANAGEMENT, LEADERSHIP AND DECISION MAKING  In this topic you will learn about  What managers do  Types of management and leadership styles and influences on these  The effectiveness of different styles of management and leadership How significant is the role of managers in determining business performance?

M ANAGERS AND LEADERS  Leadership is the ability to influence and direct people in order to meet the goals of a group  Management is the process through which company resources are used and decisions made in order to meet the objectives of the firm  Leaders are those people that can inspire and motivate people to meet objectives  Managers will set objectives and decide how to go about achieving them  Often leaders and managers are one and the same person

W HAT MANAGERS DO  The role of managers includes:  Setting objectives targets to be achieved within a given time period for individuals and teams  Analysing factors contributing towards the achievement of objectives business performance

W HAT MANAGERS DO  The role of managers includes:  Leading communicating objectives and directing subordinates to achieving these goals motivating subordinates  Making decisions allocation of resources day to day running of the business  Reviewing monitoring performance against objectives taking action as necessary Further reading on the role of a manager.

I N PAIRS  Review the 3 job descriptions below for a retail, office and restaurant manager  Identify the similarities and differences  Write a generic job description for all managers Remember in the examinations you will need to be able to apply your knowledge to a range of scenarios.

F ACTORS THAT I NFLUENCE L EADERSHIP S TYLES Internal Factors There are a number of internal factors that influence the style of leadership:  The expertise and experience of the workforce  The skills required for the work to be done  The personal traits of the leader  The power given to the leader  The time frame associated with the task to be undertaken What traits would you look for in a leader?

F ACTORS THAT I NFLUENCE L EADERSHIP S TYLES External Factors There are a number of external factors that influence the style of leadership:  The political and legal environment  The economic environment  The social environment  The technological environment  Changing nature of the industry

L EADERSHIP S TYLES  Autocractic (Authoritarian) – the leader makes a decision without consultation e.g. in the army when quick decisions are required in battle  Democratic – the leader consults his team but makes the final decision e.g. a skilled workforce where each team member can make strong contributions  Laissez-Faire (to leave alone) – the leader allows his team to make decisions e.g. experienced and competent staff given freedom to make decisions themselves  Paternalistic – the leader acts in a fatherly way towards the workforce – making decisions based on the needs of the workforce as well as the business e.g. often family or smaller organisations with a more caring style of leadership,  Bureaucratic – leaders work to rules and regulations, ‘by the book’, e.g. in bureaucratic organisations where the culture is very much led by the rules Think of a situation where you have been the leader. Which leadership style did you adopt?

M ANAGEMENT AND LEADERSHIP STYLES  Theories of management and leadership styles include:  The Tannenbaum Schmidt continuum Leadership model based on a spectrum between two extremes of manager centred and subordinate centred approaches Recognises that in reality leaders are unlikely to be at either extreme but somewhere along the spectrum  The Blake Mouton grid Leadership model based on two behavioural dimensions of concern for people or concern for production which identifies 5 leadership styles Read Richard Branson's top 10 quotes on leadership.

T ANNENBAUM S CHMIDT C ONTINUUM  The Continuum Theory looks at 7 levels of delegation from:  1 no delegation to  7 highly delegated

T ANNENBAUM S CHMIDT C ONTINUUM 1. Manager takes and announces decisions 2. Manager sells decision 3. Manager presents decision with ideas and invites questions 4. Manager suggests provisional decision and invites discussion 5. Manager presents the situation, gets feedback and then decides 6. Manager explains, defines parameters and asks team to decide 7. Manager allows team to develop options and decide on action based within managers limits Why might a leader change their style based upon the situation?

T ANNENBAUM S CHMIDT C ONTINUUM  From this continuum there are four categories of leadership identified:  Sells  Tells  Consults  Participates Discuss each of the points 1 – 7 along the continuum. Allocate numbers to each of the 4 categories above. With reference to the continuum. Explain each of the 4 categories in your own words.

T ANNENBAUM S CHMIDT C ONTINUUM  The approach that the manager will adopt will vary and depend upon:  The forces in the manager Personality and characteristics Experience Attitude towards and trust in subordinates  The forces in the subordinates Personality and characteristics Experience Attitude towards and trust in leader  The forces in the situation The nature of the problem/situation Resource constraints including time The culture of the organisation

B LAKE M OUTON GRID  The grid shows five leadership styles  the first number shows the task orientation i.e. the concern for production  the second number shows the employee orientation i.e. the concern for people

B LAKE M OUTON GRID  1,1 Impoverished management  An impoverished or indifferent style  Little concern for people or task  Management avoid responsibility and accountability  Blames others  1,9 Country club management  An accommodating style  Motivates and engages by looking after the needs of employees  Relaxed atmosphere with no pressure to meet targets or get work done  Social nature of the workplace is important

B LAKE M OUTON GRID  9,9 Team management  A team style  Managers show high concern for both people and production  Treats workers as a core asset  Achieve productivity goals as a team  9,1 Authority obedience  A produce or perish style  Managers want to control and dominate workers  Orders must be followed  Workers are treated as a resource like any other

B LAKE M OUTON GRID  5,5 Organisation man management  A middle-of-the-road style  Compromise is made between concern for people and concern for production  May influence corporate objectives e.g. an objective of profit satisficing over one of profit maximisation Which style of leadership would best suit you in relation to your academic studies? Justify your answer.

B LAKE M OUTON GRID – IN PAIRS In pairs think about big businesses with which you are familiar. Carry out some research to help support your decisions. Place each business on the matrix below.

S HOW OFF YOUR KNOWLEDGE  Can you use the leadership styles on the left to explain:  Tannenbaum Schmidt continuum  Blake Mouton grid Autocratic Democratic Laissez-Faire Paternalistic Bureaucratic

T HE EFFECTIVENESS OF DIFFERENT STYLES OF MANAGEMENT AND LEADERSHIP  Effectiveness means:  the ability of a business to achieve its objectives e.g. financial performance, competitive advantage and social  Different styles will be effective in different businesses and situations:  a laissez faire or subordinate centred style may work in an environment where employees are highly skilled with an objective of innovation  Where quick decisions need to be made and a situation handled such as a work place accident or environmental disaster an autocratic manager centred approach will be more effective

2.1.1 U NDERSTANDING MANAGEMENT, LEADERSHIP AND DECISION MAKING  In this topic you have learnt about  What managers do  Types of management and leadership styles and influences on these  The effectiveness of different styles of management and leadership