Management (AQA A-Level Business): Revision Notes

Management

What managers do

A manager is responsible for coordinating the work of others to achieve business objectives. Understanding what managers actually do helps us appreciate their vital role in business success.

Peter Drucker, a pioneering management theorist, identified five core responsibilities that managers must fulfil:

1. Set objectives Managers establish clear goals for their team and determine what work needs to be completed. This provides direction and purpose for the organisation. For example, a retail manager might set a target of increasing customer satisfaction scores by 15% over the next quarter.

2. Organise Managers break down work into manageable tasks and assign these to appropriate team members. This involves matching people's skills to specific activities. A project manager, for instance, would allocate design work to creative staff and financial analysis to the accounts team.

3. Motivate and communicate Managers build cohesive teams where people work effectively together. This involves clear communication and creating an environment where employees feel valued and engaged. A good manager might hold regular team meetings and recognise individual contributions.

4. Measure Managers establish targets and then monitor and evaluate performance against these standards. This isn't just about setting goals—it's about tracking progress and providing feedback. A sales manager would regularly review sales figures and discuss performance with team members.

5. Develop people Managers are responsible for helping employees grow their skills and capabilities. People are often considered a business's most valuable asset, so investing in their development is crucial. This might involve providing training, mentoring, or opportunities for advancement.

Henri Fayol, another influential management thinker, proposed five key elements of management: planning, organising, commanding, coordinating, and controlling. These elements complement Drucker's framework.

Leadership styles

Leadership style refers to the approach a leader takes when planning, organising, directing, and controlling their team. Different styles suit different situations and business contexts.

Basic leadership styles

There are three fundamental leadership styles that form the foundation of leadership theory:

Autocratic leaders make decisions independently without consulting their team. They retain full control and authority. This style can be efficient when quick decisions are needed, but may demotivate employees who feel their input isn't valued. For example, a factory supervisor might use this style during an emergency situation.

Democratic leaders involve others in the decision-making process but retain final authority. They encourage participation and input from team members before making the ultimate decision. This approach often increases employee commitment and satisfaction. A marketing manager might hold brainstorming sessions with the team before finalising a campaign strategy.

Laissez-faire leaders give team members considerable freedom to complete their work as they see fit, as long as they meet deadlines. The leader takes a hands-off approach. This works well with highly skilled, self-motivated professionals. A creative director might use this style with experienced designers.

Additional leadership styles

Beyond these three basic styles, there are other approaches worth understanding:

Charismatic leaders have strong personalities and believe in their vision so completely that they think they cannot make mistakes. They inspire followers through personal charm and conviction. However, this confidence can sometimes lead to poor decisions if they become overconfident.

Paternalistic leaders make decisions they believe are in everyone's best interests, consulting with employees but ultimately deciding what's best for them. Think of this as a "father figure" approach—caring but controlling. A family business owner might adopt this style.

Bureaucratic leaders follow rules and procedures strictly, ensuring everything is done "by the book". This approach works well in highly regulated industries like healthcare or finance, where compliance is critical.

The Tannenbaum Schmidt continuum

This model illustrates leadership as a spectrum rather than fixed categories. It shows the relationship between the level of freedom a manager gives their team and the level of authority the manager retains. As workers' freedom increases, the manager's authority decreases.

The continuum includes six positions from most autocratic to most democratic:

Tells: The manager makes decisions and announces them to the team without discussion. Maximum authority, minimum freedom.

Sells: The manager makes decisions but then "sells" them to the team by explaining the rationale. Still autocratic but with some explanation.

Suggests: The manager presents ideas and invites suggestions from the team before finalising the decision. Some consultation begins here.

Consults: The manager presents a tentative decision and asks for feedback, remaining open to changing their mind based on input.

Shares: The manager defines the boundaries and parameters, then asks the team to make the decision within those limits.

Delegates: The manager allows subordinates to make decisions independently within limits set by senior management. Maximum freedom, minimum authority.

This model helps us understand that leadership isn't black and white—managers can move along this continuum depending on circumstances.

Blake and Mouton's leadership grid

This framework examines leadership through two dimensions: concern for people (on the vertical axis) and concern for production (on the horizontal axis). Each dimension ranges from 1 (low) to 9 (high), creating different management styles at various coordinates.

Impoverished management (1,1): Low concern for both people and production. Managers put in minimal effort just to maintain their position. This is ineffective leadership where neither task completion nor employee wellbeing receives adequate attention. Productivity and morale both suffer.

Authority-compliance management (9,1): High concern for production but low concern for people. This autocratic approach focuses entirely on getting work done efficiently, treating people as resources to be managed. Whilst production may increase initially, employees often become unhappy and demotivated.

Country club management (1,9): High concern for people but low concern for production. Managers prioritise creating a comfortable, friendly working environment and maintaining good relationships. However, this focus on keeping everyone happy may result in reduced productivity as performance standards slip.

Middle-of-the-road management (5,5): Moderate concern for both people and production. Managers attempt to balance getting work done with keeping employees reasonably satisfied. This compromise approach typically leads to average performance—neither excellent nor poor.

Team management (9,9): High concern for both people and production. This is considered the most effective style. Managers achieve strong results by building committed teams where people feel empowered and trusted. The emphasis on both task achievement and employee wellbeing creates relationships based on trust and respect, leading to high performance.

Effectiveness of different leadership styles

Let's compare the three main styles:

Democratic leadership

Description: A business is run based on decisions agreed by the majority of the team.

Key features: Encourages employee participation and makes effective use of delegation.

Communication: Two-way communication is extensive, with contributions welcomed from subordinates.

When to use: This style works well when complex decisions require specialist knowledge from different team members. For example, developing a new product might need input from design, marketing, finance, and operations.

Advantages:

• Employees feel committed to the business
• Job satisfaction often increases
• Quality of work may improve as people take ownership
• Better decisions may result from diverse input

Disadvantages:

• Decision-making can be slow
• Reaching consensus takes time
• The team might avoid making difficult "best" decisions if they're unpopular

Authoritarian leadership

Description: Information and decision-making power remain concentrated among senior managers.

Key features: The leader sets objectives and allocates tasks, maintaining control throughout.

Communication: One-way communication flows downwards from leaders to subordinates.

When to use: This style is useful when quick decisions are required, such as during a crisis or emergency situation.

Advantages:

• Decisions and business direction remain consistent
• May project an image of a confident, well-managed organisation
• Clear chain of command
• Fast decision-making

Disadvantages:

• Subordinates lack information and become highly dependent on leaders
• Constant supervision is needed
• Employee demotivation is common
• Innovation may be stifled

Laissez-faire leadership

Description: The leader adopts a peripheral role, leaving staff largely responsible for managing the business.

Key features: The leader avoids management duties, resulting in uncoordinated delegation.

Communication: Mainly horizontal communication between team members, though overall communication may be limited.

When to use: This approach can work with highly creative professionals or experts who need freedom to innovate, such as research scientists or creative artists.

Advantages:

• May bring out the best in highly professional or creative individuals
• Talented people have space to excel
• Encourages innovation

Disadvantages:

• Often represents poor management rather than a deliberate strategy
• Staff may lack focus and clear direction
• Can lead to significant dissatisfaction
• Coordination problems are common

Influences on leadership style choice

Different leaders adopt different styles, and several factors influence which approach is most appropriate:

The individual manager: Personal characteristics play a major role. Some leaders naturally feel they must control everything and lean towards autocratic approaches. Others feel comfortable discussing decisions with their team and prefer democratic methods. The style adopted depends heavily on the leader's personality, values, and management skills.

Nature of the industry: The business sector matters significantly. Creative industries like advertising or design may benefit from more freedom and democratic approaches to encourage innovation. However, industries where safety is paramount—such as construction or healthcare—may require more authoritarian approaches to ensure strict adherence to safety procedures.

Remember!