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Management and Decision Making - 2 (management and leadership (managers…
Management and Decision Making - 2
management and leadership
managers
set objectives for their department, analyse and interpret data, make decisions, review, praise and develop
telling people what to do and how to do it
autocratic
leader makes decsion on their own
paternalistic
cosults and explains to persuade workers to follow their decision
democratic
encourage workforce to participate, delegate responsibility and listen
laissez-faire
leader rarely intefere with the running of the business - weak style
tannenbaum and schmidt
tells, sells, suggests, consults, joins, delegates, adbicates
blake mouton grid
concern for people and concern for production
country club style, team style, impoverished style, produce and perish, middle of the road
management and decision making
scientific
set objective
collect data
analyse data
make decision
implement decision
review decision
intuitive
making decisions based on a hunch or gut instinct
based on past experience
risk
high risks = high rewards
reward
managers expect decisions to bring rewards
financial or beneficial
uncertainty
scientific help to reduce uncertainty
opportunity costs
the benefit given up in order to do something else
its the cost of the choice thats made
other factors
mission
objectives
ethics
external environment
resource constraints
decision trees
combines probability and expected payoff
expected value = an outcome is the probability of the outcome occurring multiplied by the pay off the business can expect to get
net gain = financial gain after initial costs of decision has been subtracted
Link Title
features
square = decision point
lines coming from square = possible course of action and the costs of each action
circle = alternative outcomes for a course of action
decimals on the lines = probabilities of each outcome occurring
values in £'s = pay off for the business if that outcome happens
advantages
makes managers work out and think about the probability and the potential pay off of each outcome
visual representation
compare quantitatively and objectively
good or situations which have been past experiences = estimate accurate probabilities
disadvantages
quantitative = doesn't show employee opinions
probabilities are hard to predict accurately
if estimates are based on 'dodgy' info - decision will be flawed
doesn't show whole range of wider outcomes
stakeholders and decision making
internal stakeholders
owners
shareholders are owners in limited companys
employees
high wage, working conditions, job security
external stakeholders
customer
high quality and low prices
suppliers
fair price and paid on time
local community
local employment and sponsors - pollution
government
more profit = more tax or govt
creditors
people who the business owes too - bank loans
different stakeholders = different objectives
stakeholders mapping
considers power and interest
determines how much communication is needed
stakeholders with high power and high interest = managed closely, and need to be highly satisfied = requires most effort
stakeholder relationships
if a business satisfies one group at another expense it could damage business - reputation or financial
managing can be done by consulting key stakeholders before making any major decisions
good communication = informing about changing = makes stakeholders feel included
can use social media and websites to communicate with customers