3.2.1 Understanding management, leadership, and decision making


    3.2.1 Understanding management, leadership, and decision making

    What managers do

    Managers = their role is to plan, organise, and coordinate people and resources to follow orders

    Leaders = decide on a direction for the firm and inspire & motivate staff to achieve aims that are set

    • Managers have subordinate but leaders have followers


    The role of managers:

    • Setting objectives (e.g. attendance, financial and growth)
    • Analysing (e.g. analyse data for future decisions)
    • Leading (e.g. human resources, staff attendance, duties, qualifications)
    • Making decisions (e.g. rewards, expansion)
    • Reviewing (e.g. appraisals, decision making)


    Types of management and leadership styles and influences on these

    Influences on management and leadership styles:

    • Company structure and the span of control
    • Particular situation
    • Organisational culture and structure
    • Nature of the tasks involved
    • Employees and their skills & abilities
    • Group size
    • Personalities and skills of managers and leaders
    • Time frame


    McGregor’s Theory X and Theory Y = this is a theory developed that explains the two theories of human behaviour at work – Theory and X and Theory Y

    • He did not imply that workers would be one type or the other. Rather, he saw the two theories as two extremes – with a whole spectrum of possible behaviours in between


    Theory X:

    • This is an authoritarian approach to leadership, which is adopted by those leaders who believe that workers dislike work and therefore need to be controlled to improve their performance. They tell them what to do and supervise them doing it.
    • Theory X managers assume that workers:
      • Are lazy, dislike work and are motivated by money
      • Need to be supervised and controlled or they will underperform
      • Have no wish or ability to help make decisions or take on responsibility
      • Aren’t interested in the needs of the organisation and lack ambition
    • This can be useful in a crisis or where there are constantly changing workforces and workers need clear instructions and supervision


    Theory Y:

    • This is an approach to leadership that assumes that workers have both initiative and self-control, which can be used to achieve the goals of a business. Consequently, the role of management is to maximise the commitment of the workers.
    • Theory Y managers assume that workers:
      • Have many different needs, enjoy work, and seek satisfaction from it
      • Will organise themselves and take responsibility if they are trusted to do so
      • Think that poor performance is due to boring and monotonous work and poor management
      • Wish to, and should, contribute to decisions


    Leadership styles:

    • Authoritarian
      • Autocratic leaders hold onto as much power and decision-making as possible
      • Focus of power is with the manager
      • Communication is top-down & one-way
      • Formal systems of command & control
      • Minimal consultation
      • Use of rewards & penalties
      • Very little delegation
      • McGregor Theory X approach
      • Most likely to be used when subordinates are unskilled, not trusted and their ideas are not valued


    • Democratic
      • Focus of power is more with the group as a whole
      • Leadership functions are shared within the group
      • Employees have greater involvement in decision-making – but potentially this slows-down decision-making
      • Emphasis on delegation and consultation – but the leader still has the final say
      • Perhaps the most popular leadership style because of the positive emotional connotations of acting democratically
      • A potential trade-off between speed of decision-making and better motivation and morale?
      • Likely to be most effective when used with skilled, free-thinking and experienced subordinates


    • Paternalistic
      • Leader decides what is best for employees
      • Links with Mayo – addressing employee needs
      • Akin to a parent/child relationship – where the leader is seen as a “father-figure”
      • Still little delegation
      • A softer form of authoritarian leadership, which often results in better employee motivation and lower staff turnover
      • Typical paternalistic leader explains the specific reason as to why he has taken certain actions


    • Laissez-faire
      • Laissez-faire means to “leave alone”
      • Leader has little input into day-to-day decision-making
      • Conscious decision to delegate power
      • Managers / employees have freedom to do what they think is best
      • Often criticised for resulting in poor role definition for managers
      • Effective when staff are ready and willing to take on responsibility, they are motivated, and can be trusted to do their jobs
      • Importantly, laissez-faire is not the same as abdication


    Management theories:

    • Tannenbaum-Schmidt Continuum Theory

    • The Blake Moulton Grid


    Tannenbaum-Schmidt Continuum Theory:

    The continuum represents a range of action related to the:

    • Degree of authority used by the leader or manager
    • Area of freedom available to non-managers


    Four main styles of leadership are identified in the Tannenbaum and Schmidt Continuum of Leadership:

    • Tells – leader identifies problems, makes decision and announces to subordinates; expects implementation
    • Sells – leader still makes decision, but attempts to overcome resistance through discussion & persuasion
    • Consults – leader identifies problem and presents it to the group. Listens to advice and suggestions before making a decision
    • Joins – leader defines the problem and passes on the solving & decision-making to the group (which manager is part of)


    The Blake Mouton Grid:

    Through a series of questions about their leadership and management style, the position on the Blake Mouton grid is mapped in terms of:

    • Concern for people (High = 9 Low = 1): This is the degree to which a leader considers the needs of team members, their interests, and areas of personal development when deciding how best to accomplish a task.
    • Concern for task (High = 9 Low = 1): This is the degree to which a leader emphasises concrete objectives, organisational efficiency and high productivity when deciding how best to accomplish a task.

    The effectiveness of different styles of management and leadership

    The Blake Mouton grid is an effective way to analyse different leadership styles due to its format which make it more applicable to a wider audience. It also highlights the motives and impact for each leadership style. This helps managers and leaders to assess the effects of their leadership styles and if they shouldn’t adapt it. However, it doesn’t appreciate context and so many condemn some leadership styles even though they may work in certain situations.

    The Tannenbaum and Schmidt continuum concentrates more on delegation & freedom in decision making to subordinates and there by on the team development. As the team’s freedom increases, the manager’s authority decreases. This is a positive way for both teams and managers to develop delegations skills


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