Business Studies unit 2

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Define Authoritarian/Autocratic leadership
provides clear expectations of what should be done and how it should be done. Makes decisions independently and takes little or no input from others.
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Benefits of authoritarian leadership
in emergency situations this approach may be most effective as quick decisions need to be made. No issues with subordinates making the wrong decisions which could potentially harm the business.
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Drawbacks of authoritarian leadership
Can cause frustration and resentment because the subordinates are not included in decision making. Can demotivate employees as they are not given responsibility.
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Define Paternalistic leadership
leaders decide whats best for employees but still has some discussion with subordinates for closer bonds.
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Benefits of paternalistic leadership
increases employee loyalty due to the caring nature of the leader. Boosts employe motivation as they feel respected and wanted.
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Drawbacks of paternalistic leadership
Dissatisfaction in employees if bad decisions are made. Team becomes competitive and jealous.
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Define democratic leadership
leaders offer guidance to group members and allow input from subordinates to emphasise delegation and consultation.
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Benefits of democratic leadership
high motivation from employees as they are given some responsibility and input. Make employees become more skilled with responsibility.
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Drawbacks of democratic leadership
decision making process is slower as they have to consult with others. If a bad decision is made by an employee it can damage the whole business.
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Define Laissez-Faire
leaders leave the details to experts and doesn't interfere with subordinates, therefore leader has little input in decision making. The leader makes a conscious decision to delegate power and allow employee freedom.
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Benefits of laissez-faire
an effective style when employees are high skilled, experienced and educated.
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Drawbacks of laissez-faire
can make people feel insecure when feedback from the leader isn't provided. Might mean that leaders don't understand and get employees to cover for them.
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Internal factors affecting leadership style
managers experience, confidence in subordinates, feeling of security, type of organisation and skills and experiences of subordinates.
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External factors affecting leadership style
political and legal environment, economic environment, social environment, technological environment and changing nature of the industry.
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McGregor management theory X and Y
Theory X= Believes workers need to be controlled and directed as average workers are lazy. Its a centralised organisation&it exercises authority. Theory Y= believes decision making should be delegated, and that workers will take responsibility.
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Tannenbaurn and Schmidt management theory
A continuum of leadership behaviour. Represents a range of action related to the degree of authority used by the magaer and area of freedom available to non managers. Links to theory X and Y.
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4 main styles of leadership describe by Tannenbaurn and Schmidt
Tells-authoritarian style. Sells-Paternalistic/Authoritarian. Consults=Democratic. Joins-Laissez-faire/Democratic
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Define the Black Mouton grid (Explain further from notes)
some managers are very production or task orientated, where others are very people orientated. Others are a combination of both these two extremes. Grid separates 5 different management&leadership styles based on concern for people and production.
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Define scientific decision making
involves a systematic process to eliminate the decision made on the basis of intuition, bias and subjectivity. Makes sure decisions are based on hard data, however its time consuming and lacks creativity.
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The stages of scientific decision making
1) set objectives 2) gather data 3) analyse data 4) select a strategy 5) implement and review the decision.
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Benefits of using a scientific approach for decision making
provides a clear sense of direction, decisions are based on logic, involving comparisons between other approaches and pros n cons. Involves more than one person in the process to reduce bias, and its easier to defend a policy which has good planning.
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Drawbacks of using a scientific approach for decision making
process is expensive due to the large collection of data, its time consuming and the date collected maybe flawed.
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Define intuition
making decisions based on a 'hunch' or feeling of instinct. The approach mainly is used in small businesses that are owned by an individual or small group.
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How to choose between scientific decision making and intuition
speed of the decision, information available, size of the business, predictability of the situation and character of the person or culture of the company.
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Define risks
the chance of loss or damage when you make a wrong decision, the probability that something goes wrong leading to a loss when a hoped-for outcome fails. Calculated risk is when it has been given thoughtful consideration.
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Define rewards
business decisions are usually taken in expectation of some form of reward or benefit. Either monetary or non-monetary.
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Define uncertainty
just because a business decision is risky does not mean that it should not be made, the increase risks involved may also mean greater potential rewards are available.
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Define opportunity cost
the 'real cost' of taking a particular action or the next best alternative foregone.
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Define a decision tree analysis
a tree like model of the various options available in a decision, including the probability of different consequences and the financial outcomes of each option.
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Advantages of a decision tree analysis
set out the problem clearly and encourages a logical approach. Takes risks and rewards into account that may improve the results and also means the process can be computerised. Encourages careful consideration of all alternatives&opportunity costs.
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Disadvantages of a decision tree analysis
ignores the constantly changing nature of the business, difficult to get accurate&realistic data in order to estimate possibilities. Easy for management bias to influence the estimates of probabilities and financial returns.
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Define a stakeholder
An individual, group or organisation with a direct interest in the activities and performance of an organisation. In addition a stakeholder can even affect or be affected by a business positively or negatively.
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Define internal stakeholders
Someone who's closely contact to the organisation and their needs are likely to have a strong influence on the organisation.
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Define external stakeholders
Someone who has diverse interests and varying levels of influence on the organisation.
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Define primary stakeholders
Those who are directly involved and affected by a organisations decisions. They normally have the power to influence and shape actions.
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Define secondary stakeholders
Persons or organisation who is indirectly affected by an organisations actions.
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Define key stakeholders
Can be primary or secondary but will have a big influence upon or within an organisation.
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What does it mean when stakeholder needs overlap and conflict?
Overlapping is when different groups have something in common with their needs. Conflict however, occurs when stakeholders have different needs. The business has to adopt the win-lose or win-win strategies.
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Define stakeholder mapping
The process involves placing stakeholders onto a matrix with their position dependant on their relative power and interest in relation to a particular project being undertaken by a business.
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How do you place stakeholders on Mendelow's matrix?
Depending on the level of interest stakeholders have in order to influence and organisations choice of strategy. Or to what extent do the stakeholders have the power to impose their needs and objectives on a business.
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Is the Stakeholder mapping metrix static?
No its not static, as the stakeholders move into different quadrants depending on the situation.
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What influences the relationship with the stakeholder?
The stakeholders power and status, if they have specialist expertise, knowledge and skills. Or if they have the needs and objectives similar, or conflict with, those of other stakeholders and those of the organisation.
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How do you manage the relationship with different stakeholders>
Through Stakeholder Mapping, Mission statements, Corporate social responsibility or ethics and the Cyert&March Theory.
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Benefits of effective communication and consultation with stakeholders
The viewpoints of the main stakeholders can help shape a project at an early stage, Gaining support from powerful stakeholders can help win more resources. By managing stakeholders relations effectively allows them to anticipate public reaction.
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What influences decision making?
Tactical vs Strategic decisions, Mission Statement, Objectives, Ethics, External Environment and Resource constraints (HR, Finical and Physical)
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Other cards in this set

Card 2

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Benefits of authoritarian leadership

Back

in emergency situations this approach may be most effective as quick decisions need to be made. No issues with subordinates making the wrong decisions which could potentially harm the business.

Card 3

Front

Drawbacks of authoritarian leadership

Back

Preview of the front of card 3

Card 4

Front

Define Paternalistic leadership

Back

Preview of the front of card 4

Card 5

Front

Benefits of paternalistic leadership

Back

Preview of the front of card 5
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alfwalker

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All these flash cards r awesome...v helpful!! :D

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