Level 2 Business Studies AS90843 Demonstrate understanding of the internal operations of a large business

Roles and Skills of Managers and Leaders / Rangatiratanga Students will understand the roles and skills of managers and characteristics of leaders Understand the roles and skills of managers eg planning, objective setting, leading, organising, controlling, co-ordinating, delegating, communicating and measuring and setting performance Understand the different levels of management eg team leaders, supervisors, junior, middle and senior management, CEO Understand the styles of management/leadership eg autocratic, democratic, laissez faire, paternalistic Understand that leaders may have different characteristics and that business may have formal and informal leaders Appreciate that leadership contributes to different outcomes Understand the McGregor’s X and Y management theory

What makes a good leader or manager? a. For many it is someone who can inspire and get the most from their staff. b. Be able to think creatively to provide a vision for the company and solve problems c. Be calm under pressure and make clear decisions source:

What makes a good leader or manager? d. Possess excellent two-way communication skills e. Have the desire to achieve great things f. Be well informed and knowledgeable about matters relating to the business g. Possess an air of authority

What makes a good leader or manager? h. Managers deal with their employees in different ways. Some are strict with their staff and like to be in complete control, whilst others are more relaxed and allow workers the freedom to run their own working lives (just like the different approaches you may see in teachers!). Whatever approach is predominately used it will be vital to the success of the business. “An organisation is only as good as the person running it”. source:

Roles of Managers 1. Planning: setting aims or targets and objectives. These will give the business a sense of direction or purpose. There will be a common feeling in the business of having something to work towards. Managers also plan for the resources which will be needed. 2. Organising: tasks must be delegated to others in the business as a manager cannot do everything. It is a managers responsibility to organise people and resource effectively.

Roles of Managers 3. Coordinating: ‘bringing together’. A good manager will make sure that all departments in the organisation work together to achieve the plans originally set by the manager. 4. Commanding: managers have to make sure that all employees are keeping to targets and deadlines. Instructions and guidance must be provided by managers and they must make sure that the tasks are carried out by those responsible for the work.

Roles of Managers 5. Controlling: Managers must try to measure and evaluate the work of all individuals and groups to make sure they are on target. 6. Communication: A manager is the middle person in between the top management level and the team that reports to her. S/he has to ensure that communication is smooth and conveyed clearly to avoid misinterpretations and dissatisfaction. It's useful to develop your negotiation and customer service skills, especially if you deal with clients.

Roles of Managers 7. Delegating: Determining what needs to be done in a situation and getting people to do it. 8. Measuring and setting performance: People like to know how they are performing. Managers can develop an effective performance goal setting and performance measurement system that gives them this information. (see also controlling).

Roles of Managers 9. Motivation: Motivation is also a kind of basic function of management, because without motivation, employees may not work effectively. If motivation doesn't take place in an organisation, then employees may not contribute to the other functions (which are usually set by top level management).

Levels of Management The management of a large organisation may have about five levels: Senior management (or "top management" or "upper management") Middle management Low-level management, such as supervisors or team- leaders Foreman Rank and File

Top-level Management eg CEO Require an extensive knowledge of management roles and skills. They have to be very aware of external factors such as markets. Their decisions are generally of a long-term nature They are responsible for strategic decisions. They are responsible for long term planning. They are executive in nature.

Middle Management Mid-level managers have a specialised understanding of certain managerial tasks. They are responsible for carrying out the decisions made by top-level management. Finance, marketing etc comes under middle level management

Lower Management This level of management ensures that the decisions and plans taken by the other two are carried out. Lower-level managers' decisions are generally short- term ones. Foreman / lead hand They are people who have direct supervision over the working force in office, factory, sales field, or other workgroup or area of activity. Rank and File The responsibilities of the persons belonging to this group are even more restricted and more specific than those of the foreman.

Foreman / lead hand They are people who have direct supervision over the working force in office, factory, sales field, or other workgroup or area of activity.

Rank and File The responsibilities of the persons belonging to this group are even more restricted and more specific than those of the foreman.

AuthoritarianPaternalistic DemocraticLaissez-faire Styles of Management

Styles of Management Authoritarian or Autocratic Managers make decision alone, without consulting staff

Styles of Management Paternalistic Managers make decisions themselves, but after consultation with workers

Styles of Management Democratic Managers allow the workforce some influence over decisions

Styles of Management Laissez-Faire Managers allow workers to perform tasks as they see fit, offering help if needed.

Formal Leaders Formal leaders are given leadership based on their position with a business. They are actually assigned to be leaders as part of their role in the business, such as a manger in a business. The formal leader has a job to organise and direct employees to meet the goals of the business. Formal leaders are often the best leaders in a business but that's not always the case.

Informal Leaders The ability for an informal leader to influence or lead others rests on the ability of that person to evoke respect, confidence, and trust in others, and it is not uncommon for an informal leader to NOT intentionally try to lead. Informal leaders can be exceedingly valuable to businesses, and to the success of formal leaders, OR, if informal leaders do not support the formal leaders and their agendas and vision, they can function as barriers in the organisation.

Informal Leaders (continued) An informal leader is someone within an business who, by virtue of how he or she is perceived by his peers (or others in the organisation) is seen as worthy of paying attention to, or following. The major thing that distinguishes an informal leader from a formal one is that the informal leader does NOT hold a position of power or formal authority over those that choose to follow him or her.

Understanding the difference between formal and informal leaders The difference between a formal and informal leader goes well beyond just the fact that the formal leader has been given official authority to lead the group. It is important for formal leaders and informal leaders to figure out a way to work together if a group is going to truly have solid leadership.

Understanding the difference between formal and informal leaders Creating a positive balance between informal and formal leaders begins with an understand of their different roles. Formal leaders direct individuals in meeting the goals of the company, organisation or team. Informal leaders may or may not do this as they tend to follow their own agenda. They are each the best leader in their respective areas.

McGregor’s X and Y Management Theory McGregor developed two theories of human behaviour at work: Theory and X and Theory Y. McGregor’s Theory X (boss-centred leadership) & Theory Y (subordinated-centred leadership): 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.

McGregor’s X Management Theory Theory X workers could be described as follows: Individuals who dislike work and avoid it where possible Individuals who lack ambition, dislike responsibility and prefer to be led Individuals who desire security The management implications for Theory X workers were that, to achieve organisational objectives, a business would need to impose a management system of coercion, control and punishment.

Management implications for Theory X The Theory X manager tends to believe that everything must end in blaming someone. He or she thinks all prospective employees are only out for themselves. Usually these managers feel the sole purpose of the employee's interest in the job is money. They will blame the person first in most situations, without questioning whether it may be the system, policy, or lack of training that deserves the blame.

Management implications for Theory X (continued) A Theory X manager believes that his or her employees do not really want to work, that they would rather avoid responsibility and that it is the manager's job to structure the work and energise the employee. Rewards of varying kinds are likely to be the most popular motivator. One major flaw of this management style is it is much more likely to cause Diseconomies of Scale in large businesses.

McGregor’s Y Management Theory Theory Y workers were characterised by McGregor as: Management assumes employees may be ambitious and self-motivated and exercise self-control. Consider effort at work as just like rest or play Depending on the working conditions, work could be considered a source of satisfaction or punishment Individuals who seek responsibility (if they are motivated)

Management implications for Theory Y Theory Y managers are more likely than Theory X managers to develop the climate of trust with employees that is required for human resource development. This would include managers communicating openly with employees, minimising the difference between manager-employee relationships, creating a comfortable environment in which employees can develop and use their abilities.

Management implications for Theory Y (continued) This climate would include the sharing of decision making so that employees have a say in decisions that influence them. This theory is a positive view of the employees, meaning that the employer is under a lot less pressure than someone who is influenced by a theory X management style. The challenge for management with Theory Y workers is to create a working environment (or culture) where workers can show and develop their creativity.

Does leadership contribute to different outcomes? It is largely recognised and accepted by practitioners and researchers that leadership is important, and research supports the notion that leaders do contribute to key organisational outcomes Successful business is reliant on effective leadership, according to Businesslink.gov.

Does leadership contribute to different outcomes? Effective leadership in business is able to cast vision, motivate employees and implement positive change. The leadership in a business has a direct affect on the corporate culture, organisational development and management style. Effective leadership in business produces productive systems, satisfied employees and a positive public image.

Does leadership contribute to different outcomes? The role of effective leadership in business is to create a highly productive and enjoyable working environment. The leadership’s role is to define the business' vision statement, goals and standards the company will uphold. The outcome of effective leadership in business is an effective organisational structure, satisfied employees and a positive public image.