Business Studies

1. 2AS.1
MANAGEMENT AND LEADERSHIP

2. MANAGEMENT AND MANAGERS

3. THE FUNCTIONS OF MANAGEMENT –
WHAT MANAGERS ARE RESPONSIBLE
FOR
1. Setting objectives and planning
• Senior management will establish overall strategic objectives and these will
be translated into tactical objectives for less senior management staff.
• Planning in order to complete objectives is Important.
• New production or marketing objective will require the planning, preparation
of sufficient resources.

4. THE FUNCTIONS OF MANAGEMENT –
WHAT MANAGERS ARE RESPONSIBLE
FOR
2. Organising resources to meet the objectives
• People need to be recruited carefully and encouraged to take authority
and accept accountability via delegation.
• Senior managers will ensure that the structure of the business allows for a
clear division of tasks and that each section or department is 0organised to
allow them to work towards the common objectives.

5. THE FUNCTIONS OF MANAGEMENT –
WHAT MANAGERS ARE RESPONSIBLE
FOR
3. Directing and motivating staff
• Guiding, leading and overseeing of employees to ensure that organisational
goals are being met.
• The significance of developing staff so that they are motivated to employ all
of their abilities at work is now widely recognised.
• This will make it more likely that organisational aims are achieved.

6. THE FUNCTIONS OF MANAGEMENT –
WHAT MANAGERS ARE RESPONSIBLE
FOR
4. Coordinating activities
• Average size of business units increases- especially true for multinationals,
they need to ensure consistency and coordination between different parts
of each firm increases.
• Goals of each branch, division, region and all staff must be welded together
to achieve a common sense of purpose.
• At a practical level this can mean avoiding the situation where two divisions
of the same company both spend money on researching into the same new
product resulting wasteful duplication of effort.

7. THE FUNCTIONS OF MANAGEMENT –
WHAT MANAGERS ARE RESPONSIBLE
FOR
5. Controlling and measuring performance against targets
• Management by objectives establishes targets for all groups, divisions and
individuals.
• It is management’s responsibility to appraise performance against targets
and to take action if under-performance occurs.
• As Herzberg pointed out, it is just as important to provide positive feedback
when things keep going right.

8. MANAGEMENT ROLES
• Managers have to undertake many different roles.
• Henry Mintzberg (the Nature of Managerial Work, 1973) identified 10 roles
common to the work of all managers.
These are divided into 3 groups:
• Interpersonal roles- dealing with and motivating staff at all levels of the
organisation.
• Information roles- acting as a source, receiver and transmitter of information.
• Decision roles- taking decisions and allocating resources to meet the
organisation’s objectives.

9. ROLE TITLE DESCRIPTION OF ROLE ACTIVITIES EXAMPLES OF MANAGEMENT
ACTION TO PERFORM THE ROLE
1. INTERPERSONAL ROLES
figurehead Symbolic leader of the organisation
undertaking duties of a social or legal
nature.
Opening new factories/offices; hosting
receptions; giving important presentations.
Leader Motivating subordinates; selecting and
training other managers/ staff.
Any management tasks involving subordinate
staff.
Liason Linking with managers and leaders of
other divisions of the business and other
organisations.
Leading and participating in meetings; business
correspondence with other organisations.
Managerial roles according to Mintberg

10. ROLE TITLE DESCRIPTION OF ROLE ACTIVITIES EXAMPLES OF MANAGEMENT
ACTION TO PERFORM THE ROLE
2. INFORMATIONAL ROLES
Monitor
(receiver)
Collecting data relevant to the
business’s operations.
Attending seminars, business conferences,
research groups, reading research reports.
Disseminator Sending information collected from
external and internal sources to the
relevant people within the organisation.
Communicating with staff within the
organisation, using appropriate means.
Spokesperson Communicating information about the
organisation- its current position and
achievements- to external groups and
people.
Presenting reports to groups of stakeholders
(e.g. annual general meeting) and
communicating with the press and TV media.
Managerial roles according to Mintberg

11. ROLE TITLE DESCRIPTION OF ROLE ACTIVITIES EXAMPLES OF MANAGEMENT
ACTION TO PERFORM THE ROLE
3. DECISIONAL ROLES
entrepreneur Looking for new opportunities to
develop the business.
Encouraging new ideas from within the business
and holding meetings aimed at putting new
ideas into effect.
Disturbance
handler
Responding to changing situations that
may put the business at risk, assuming
responsibility when threatening factors
develop.
Taking decisions on how the business should
respond to threats, e.g. new competitors or
changes in the economic environment.
Resource
allocator
Deciding on the spending of the
organisation’s financial resources and
the allocation of its physical and human
resources.
Drawing up and approving estimates and
budgets; deciding on staffing levels for
departments and within departments.
Negotiator Representing the organisation in all
important negotiations, e.g. with
government.
Conducting negotiations and building up
official links between the business and other
organisations.
Managerial roles according to Mintberg

12. LEADERSHIP

13. LEADERSHIP – THE IMPORTANCE
OF IT AND QUALITIES NEEDED
• The art of motivating a group of people towards achieving a common
objective.
• Key part of being a successful manager.
• Setting a clear direction and vision for an organisation.
• Employees will want to follow a good leader and respond positively to them.
• A poor leader will fail to win staff over and will have communication and
organising problems with staff.
• The best managers are good leaders.
• Managers that focus control and allocation of people and resources can fail
to provide a sense of purpose or focus that others will understand and be
prepared to follow

14. LEADERSHIP – THE IMPORTANCE
OF IT AND QUALITIES NEEDED
• Some studies argue that leaders are born with natural assets that create and
aura or charisma that others find appealing
• Other research is more inclined to support the view that leaders can be
trained to adopt the key attributes of good leadership.
Characteristics
• Desire to succeed, natural self confidence.
• Ability to think beyond the obvious, be creative and encourage others to do
the same.
• Multi-talented so they can understand discussions about a wide range of
issues affecting the business.
• Incisive mind that enables the heart of an issue to be identified rather than
unnecessary details.

15. IMPORTANT LEADERSHIP POSITIONS
IN BUSINESS
Directors
• Senior managers are elected into office by shareholders in a limited
company.
• Usually head of a major department e.g. marketing.
• They are responsible for delegating, assisting in recruitment of senior staff,
meeting objectives set by the board of directors and communicating these
to their department.

16. IMPORTANT LEADERSHIP POSITIONS
IN BUSINESS
Managers
• An individual responsible for people, resources or decision making.
• They will have some authority over staff below them.
• They will direct, motivate and if necessary discipline staff in their department.

17. IMPORTANT LEADERSHIP POSITIONS
IN BUSINESS
Supervisors
• Appointed by management to watch over the work of others.
• Not a decision making role, but have responsibility for leading a team of
people.
• Modern role of these members is less of an inspector and more of a work
colleague appointed to help staff achieve objectives in a cooperative spirit.

18. IMPORTANT LEADERSHIP POSITIONS
IN BUSINESS
Worker’s representatives
• Elected by workers, either as trade union officials or as representatives on
works councils, in order to discuss areas of common concern with managers.

19. LEADERSHIP STYLES
• This refers to the way in which managers take decisions and communicate
with their staff.
4 leadership styles:
• Autocratic (authoritarian)
• Democratic
• Paternalistic
• Laissez – faire

20. LEADERSHIP STYLES
Style Main features Drawbacks Possible applications
Autocratic • Leader takes all
decisions.
• Gives little information to
staff.
• Supervises workers
closely.
• Only one-way
communication.
• Workers only given limited
information about the
business.
• Demotivates staff
who want to
contribute and
accept responsibility.
• Decisions do not
benefit from staff
input.
• Defence forces and
police where quick
decisions are needed
and the scope for
‘discussion’ must be
limited.
• In times of crisis when
decisive action might
be needed to limit
damage to the
business or danger to
other.

21. LEADERSHIP STYLES
Style Main features Drawbacks Possible applications
Democratic • Participation
encouraged.
• 2-way communication
used, which allows
feedback from staff.
• Workers given
information about the
business to allow full staff
involvement.
• Consultation with staff
can be time consuming.
• On occasions, quick
decision making will be
required.
• Level involvement-
some issues might be
too sensitive.
• Most likely to be useful
in businesses that
expect workers to
contribute fully to the
production and
decision making
processes, thereby
satisfying their higher
order needs.
• Experienced & flexible
workforce likely to
benefit most.
• Situations that demand
a new way of thinking
or a new solution, staff
input can be valuable.

22. LEADERSHIP STYLES
Style Main features Drawbacks Possible applications
Paternalistic • Managers do what they
think is best for workers.
• Some consultation might
take place, but final
decisions are taken by
the managers – there is
no true participation in
decision making.
• Managers want workers
to be happy in their jobs.
• Some workers will be
dissatisfied with the
apparent attempts to
consult, while not
having any real power
or influence.
• Used by managers who
have a genuine
concern for workers’
interests, but feel that
‘managers know best’
in the end – when
workers are young or
inexperienced this
might be an
appropriate style to
employ.

23. LEADERSHIP STYLES
Style Main features Drawbacks Possible applications
Laissez- faire • Managers delegate
virtually all authority and
decision-making powers.
• Very broad criteria or
limits might be
established for the staff
to work within.
• Workers may not
appreciate the lack of
structure and direction
in their work- this could
lead to a loss of security.
• The lack of feedback-
as managers will not be
closely monitoring
progress- may be
demotivating.
• When managers are
too busy to intervene.
• May be inappropriate
in research institutions
where experts are more
likely to arrive at
solutions when not
constrained by narrow
rules or management
controls.

24. MCGREGOR’S THEORY X AND
THEORY Y
Theory X managers believe that workers Theory Y managers believe that workers
Dislike work Can derive as much enjoyment from work
as from rest and play
Will avoid responsibility Will accept responsibility
Are not creative Are creative

25. THE BEST LEADERSHIP STYLE-
IT DEPENDS ON MANY FACTORS
• Training and experience of the workforce and degree of responsibility that
they are prepared to take on.
• The amount of time available for consultation and participation.
• Attitude of managers, management culture, this will be influenced by the
personality and business background of the manager.
• Importance of issues under consideration, different styles may be used in the
same business in different situations, there is great risk to the business when a
poor or slow decision is taken, then it is more likely that management will
make the choice in an autocratic way.

26. THE BEST LEADERSHIP STYLE-
IT DEPENDS ON MANY FACTORS
Democratic leadership
• Involving participation and 2-way communication – is increasingly common for a
number of reasons.
• Working people are better educated than ever before and have higher
expectations of their experience from work, they expect higher-level needs to be
partly satisfied at work.
• Managers have realised that the rapid pace of changes at work, as a result of
technological and other factors.
• People find change less threatening and more acceptable if they have been
involved in it.
• Managers will still avoid consultation and staff participation, because they find it
difficult to adapt.

27. INFORMAL LEADERSHIP
• A person who has no formal authority but has the respect of colleagues and
some power over them.
• Appointing them as formal leaders might be wise, but in an organisation
where employer-employee relationships are not based on trust, the person
concerned might lose support if they were seen ‘joining the other side’.
• Cutting them out or ignoring them could lead to disruptive behaviour as well
as disruption of production.
• Managers should work with informal leaders to help achieve the aims of the
business.

28. EMOTIONAL INTELLIGENCE
• The ability of managers to understand their own emotions, and those of the
people they work with , to achieve better business performance.
These put emphasis on emotional intelligence:
• Understanding yourself, you goals, your behaviour and your response to
people.
• Understanding others and their feelings.
• The more emotionally intelligent a person is the higher the emotional
intelligence quotient will be.
• Studies have suggested that business performance can be improved by
appointing people with high emotional intelligence.

29. EMOTIONAL INTELLIGENCE
• Daniel Goleman- best known researcher in EI.
• He suggested that EI has 4 main competencies:
• Self-awareness
• Self-management
• Social awareness
• Social skills

31. EMOTIONAL INTELLIGENCE
Self-awareness
• Knowing what we feel is important & using that to guide decision making.
• Having a realistic view of our own abilities and being self-confident in our
abilities
Self-management
• Being able to recover quickly from stress, being trustworthy and
conscientious, showing initiative and self-control.

32. EMOTIONAL INTELLIGENCE
Social awareness
• Sensing what others are feeling being able to take their views into account
and being able to ‘get on’ with a wide range of people.
Social skills
• Handling emotions in relationships well and accurately understanding
different social situations; using social skills to persuade, negotiate and lead.

33. EMOTIONAL INTELLIGENCE
A manager with low levels of emotional intelligence would:
• Attempt projects beyond their abilities but lack self-confidence that targets
would be met.
• Lack the trust and confidence of others and be so stressed out that they
would be difficult to approach.
• Fail to take the views of others into account when taking decisions.
• Perform poorly in social situations, finding it difficult to talk and negotiate with
others, and lacking the ability to build a team.