Different styles of management

Management is the process of achieving the objectives of the business by using its available resources
effectively.

(Resources could be labour or finance, raw materials, assets, furniture…ANYTHNG!)

In a small business, the owner is likely to be the manager as well, responsible for all the managerial tasks.
However, as a business grows, then some of these tasks can be delegated to others. The main functions of
management are:

1. Planning: setting clear objectives.

2. Organising: dividing the work into smaller tasks and delegating to others.
3. Staffing: having the 'right' person in the 'right' job (known as Human Resource Management).
4. Directing: decision-making and giving instructions to others.
5. Budgeting: preparing a detailed financial plan for the next trading year.
6. Co-ordinating: Bringing the various parts of the business together.
Purpose of leadership
Leadership is a way of focusing and motivating a group to enable them to achieve their aims.
It also involves being accountable and responsible for the group as a whole. They should
- provide continuity and momentum
- be flexible in allowing changes of direction

Ideally, a leader should be a few steps ahead of their team, but not too far for the team to be able to understand
and follow them.

Directors
- The board  is appointed to act on behalf of the shareholders (accountable to them). They deal with
business and financial issues
- At the AGM, they provide a report to shareholders on the performance, future plans.
- The board of directors' key purpose is to ensure the company's prosperity by collectively directing the
company's affairs, whilst meeting the interests of its stakeholders.
- They also must deal with challenges and issues relating to corporate governance, corporate social
responsibility and corporate ethics.

A General Manager has broad, overall responsibility for a business/organization (all areas)

Senior Manager is responsible for planning and directing the work of a group of individuals,

A Manager is the person responsible for planning and directing the work of a group of individuals, monitoring
their work, and taking corrective action when necessary. For many people, this is their first step into a
management career.

Managers may direct workers directly or they may direct several supervisors who direct the workers. The
manager must be familiar with the work of all the groups he/she supervises, but does not need to be the best in
any or all of the areas.

A supervisor is the lowest, or most-junior, management position responsible for the daily activities of a group.
McGregor’s Theory X and Theory Y are what managers believe motivates people.
This will affect their management style accordingly

McGregor’s theory focuses on the view managers have not HOW the managers will act.

As a result, Theory X managers will be autocratic and Theory Y ones will be more democratic.

Theory X mode of managing could lead to a waste of human talent and potential. Like a dictatorship which
doesn't take into account the ideas and creativity of employees. In a situation like this theory Y would benefit a
company much more.

Although big organizations may find that adopting Theory X is unavoidable due to the sheer number of
people that they employ and the tight deadlines that they have to meet.

In a large corporation such as Coca Cola, the production division, employees which are involved in
manufacturing of the bottle, Theory X here would be more beneficial as there is no need for innovation or
creativity. It will help control, manage the costs and ensure an even quality.

In the marketing division, innovation and creativity are essential for success and hence Theory Y must be used
there
Goleman’s 4 competencies (EI)

Emotional intelligence is the capacity to be aware of, control, and express one's emotions, and to handle
interpersonal relationships judiciously and empathetically.

A manager/leader needs to be aware of himself first and learn how to manage himself before he can learn
SOCIAL SKILLS.

Self-awareness - The ability to recognize and understand personal moods and emotions and drives, as well as
their effect on others.

Self-regulation - The ability to control or redirect disruptive impulses and moods, and the tendency to suspend
judgment and to think before acting.

Social awareness - The ability to understand the emotional makeup of other people. A skill in treating people
according to their emotional reactions

Social skills - Expertise in managing relationships and building networks, and an ability to find common
ground and build rapport.
Indicators of high motivation
- Better productivity (amount produced per employee). This can lead to lower unit costs of production and so
enable a firm to sell its product at a lower price
- Lower levels of absenteeism as the employees are content with their working lives
- Lower levels of staff turnover (employees leaving the business). This leads to lower training and other costs
- Improved industrial relations with trade unions
- Contented workers give the firm a good reputation as an employer so making it easier to recruit the best
- Motivated employees are likely to improve product quality or the customer service associated with a product

(Write the opposite for poor motivation)

Motivational theories
There are two basic theories of motivation; content theories and process theories. Content theories focus on
what motivates people, they study the needs that must be satisfied in order for the employee to be motivated.
The need is either satisfied by an extrinsic reward (e.g. pay) or an intrinsic reward (e.g. recognition and
praise). the Scientific (Taylor), the Human Relations (Mayo), and the Neo-Human Relations (Maslow,
Herzberg) schools of management thought are all content theories.
 Content Theorists

Maslow

A person’s basic needs must be fulfilled before the higher ones can be achieved. They don’t have to be rigidly
followed but usually follow the order.
How to apply it to the workplace
In order to get the most out of your team, you should also make sure you support them in other aspects of
their lives outside work. Perhaps you could offer flexible working hours to give employees time to focus on
their families and make sure they are paid fairly to help them feel financially stable.

Taylor
Taylor put forward the idea that workers are motivated mainly by pay.
His Theory of Scientific Management argued the following:
- Workers do not naturally enjoy work and so need close supervision and control (Theory X)
- Therefore managers should break down production into a series of small tasks
- Workers should be given appropriate training/tools so they can work as efficiently as possible
- Workers are then paid according to the number of items they produce in a set period of time/piece-rate pay.
- As a result workers are encouraged to work hard and maximise their productivity

Taylor's methods were widely adopted as businesses saw the benefits of increased productivity levels and lower
unit costs. They are very basic and not applicable nowadays but was a good starting point and very scientific
when it was first introduced in the 1920s.
Mayo
The researchers changed a number of physical conditions over the course of the experiments including lighting,
working hours and breaks (Hawthorne Effect).
In all cases, employee productivity increased when a change was made (not just the best conditions).
The researchers concluded that employees became motivated to work harder as a response to the attention
being paid to them, rather than the actual physical changes themselves.

How to apply it to the workplace

The Hawthorne Effect studies suggest that employees will work harder if they know they’re being observed.
The firm shouldn’t be on their heads but must provide regular feedback.
Showing your employees that you care about them and their working conditions may also motivate them to
work harder. Encourage your team to give you feedback and suggestions about their workspace and
development.

Herzberg’s Two Factor Theory

Herzberg's theory was that there are many factors, such as work hours and conditions, responsibility,
achievement, a challenging work environment and personal growth that motivate workers other than money

He divided these factors into 2 types

- Hygiene factors – These are expected and not considered a motivation. However if they are missing they will
demotivate the worker e.g. good working conditions, food,
- Motivators – these actually motivate a worker to try to do better. E.g. challenges so they feel achievement.
Financial rewards initially are and SEEM like they are motivators, but when workers get used to them and
expect them, they become hygiene factors

Impact of Herzberg’s theory on the workplace

Herzberg felt that productivity can be increased through worker satisfaction and that this comes from a
variety of factors. For example, jobs should be challenging enough so that workers are utilized to their full
ability, and workers who are successful should be given more responsibility.
McClelland
David McClelland's Human Motivation Theory gives you a way of identifying people's motivating drivers.
This can then help you to give effective praise and feedback effectively, assign them suitable tasks, and keep
them motivated.

The three motivators are achievement, affiliation, and power.

McClelland says that, regardless of our gender, culture, or age, we all have three motivating drivers, and one of
these will be our dominant motivating driver. This dominant motivator is largely dependent on our culture and
life experiences.

People will have different characteristics depending on their dominant motivator.

Achievement
• Has a strong need to set and accomplish challenging goals.
• Likes to receive regular feedback on their progress.
Affiliation
• Wants to belong to the group.
• Will often go along with whatever the rest of the group wants to do.
• Doesn't like high risk or uncertainty.
Power
• Wants to control and influence others.
• Enjoys status, competition and winning.

How to use it in the workplace

Step 1: Identify Drivers (n-ach, n-pow or n-affil)
Step 2: Structure Your Approach (give work, feedback and praise accordingly)

Using McClelland's theory helps personalize the feedback for the person. You would have known that your
team member's main motivational driver is affiliation. So, your feedback would have been far more effective,
and appreciated, if you had praised her in private.

Content theorists ( like Maslow, Herzberg) look at the needs and the resulting effort expended to fulfil them,
Vroom's expectancy theory separates effort (which arises from motivation), performance, and outcomes.
 Process Theorists
Theses DON’T LOOK AT the needs to achieve motivation but the thought-processes that influence workers.

Vroom's expectancy theory assumes that behavior results from conscious choices among alternatives
whose purpose it is to maximize pleasure and to minimize pain. Vroom realized that an employee's
performance is based on individual factors such as personality, skills, knowledge, experience and abilities. He
stated that effort, performance and motivation are linked in a person's motivation.

Expectancy is the belief that increased effort will lead to increased performance
i.e. if I work harder, then this will be better.
This is affected by such things as:
-Having the right resources available (e.g. raw materials, time)
-Having the right skills to do the job
-Having the necessary support to get the job done (e.g. supervisor support, or correct information on the job)

Instrumentality is the belief that if you perform well, you get a valued outcome.
i.e. if I do a good job, will I get a reward?

This is affected by
- Trust in the people who decide who gets what outcome. No unfairness e.g. nepotism, choosing their favourite.
- Transparency of the process that decides who gets what outcome

Valence is the importance of the expected outcome.

For the valence to be positive, the person must value the outcome to not attaining it.
E.g. if someone is mainly motivated by money, he or she might not value offers of additional time off.

Vroom's expectancy theory separates effort (which arises from motivation), performance (ability) and
outcomes.
USE THIS TO ASSESS WHETHER YOUR WORKERS ARE ADEQUATELY MOTIVATED!
Financial motivation

Salary - A set amount is paid to each employee per time period, regardless of the output.
+ They are simple to calculate and + you will know exactly how much you are paying

Time-rate - This payment method involves the employee receiving a basic rate of pay per time period that he
works (e.g. £5 per hour, £50 per day, £400 per week). The pay is not related to output or productivity.
+ He can do over-time to earn more. But he can - work slowly to increase the time

Piece-rate schemes- This payment method involves per unit (or per 'piece') that he produces. Therefore his pay
is directly linked to his productivity level.
+ He can boost his earnings by making more but, may - reduce the quality per unit, so that he can produce
more output in a given period of time.

Rate schemes encourage productivity, are cost effective (if you pay more, you definitely are getting more work)
BUT the quality may decrease

Commission- This is a common method of payment for salesmen (e.g. insurance, telesales). The employee
receives a very small percentage (say 0.5%) of the value of the goods that he manages to sell in a period of time.
This will +encourage more sales BUT may - encourage an aggressive approach to sales by the salespeople.

Performance-related pay- This is related to the employee achieving a number of targets over the past year.
This is common with managerial and professional workers. Employees will work for that extra cash.

Bonus - A single payment made at the end of the performance period (typically a year) to reward
extraordinary effort or achievement.
They attract more skilled workers (who will probably stay on longer with the firm BUT its expensive for the
firm to pay these rewards

In analysing, always mention the advantages of financial rewards by linking it to Maslow’s lower needs and
Taylor. THEN give the drawbacks, by mentioning Mayo (non financial rewards increase efficiency more),
Herzberg (financial rewards can become hygiene factors) and Maslow’s higher needs.
Non-Financial Methods

Training- It is the process by which people are taught critical skills. Participants gain knowledge to carry out
their current responsibilities. To goal is to improve performance in the short term. Training usually refers to
organized group events, such as workshops, classes or seminars that have a beginning and end date.

Development - Development activities, on the other hand, tend to prepare people for additional job roles for the
long term. Development tends to refer to more personalized, individualized experiences, such as a certification
process, job rotation period, coaching or mentoring.

Benefits of training and development

Providing training and management-development programs to employees benefits employers by developing the
team skills required to achieve organizational goals.
Training programs motivate employees to reach higher standards, improve operational efficiency and
increase customer satisfaction.
Longer term, management-development programs prepare employees for promotional opportunities and tend
to decrease employee turnover, increase morale and spark innovation and creativity.
Successful small-business owners use training and management development to grow and expand their
business by developing their staff.

Induction – Or orientation. This is for new workers so they can familiarize themselves with the place and feel
comfortable. If not, they feel alienated, lost and hence de-motivated.

Opportunities for promotion – The employee must know there is opportunity for promotion. If they reach the
highest post (for example in a family business where only a family member can get the top posts, they will get
demotivated and leave.

Status – Recognition/job title

Delegation. This occurs when managers pass a degree of authority down the hierarchy to their subordinates.

Job redesign. Job redesign is an effort where job responsibilities and tasks are reviewed, and possibly re-
allocated among staff, to improve output. Redesigning jobs can lead to improvements in both productivity and
job satisfaction.

Teamworking. This is the opposite production technique to an assembly-line which uses an extreme division of
labour. Teamworking involves a number of employees combining to produce a product, with each employee
specialising in a few tasks.

Advantages and disadvantages of teamwork

+ Workload shared - Every person is not a team player (some work better alone)
+ Can result in synergy (collective output - Possibility of conflict
better than a sum of individual output) - Different levels of ability (smarter ones will be slowed)
+ Different skills and ideas give better results - Less motivated people demoralize the team
+ Improves communication and coordination skills
Empowerment. This involves a manager giving his subordinates a degree of power over their work (i.e. it
enables the subordinates to be responsible and to decide for themselves the best way to approach a problem).

Job enrichment. This is a method of motivating employees by giving them more responsibilities and the
opportunity to use their initiative. Makes some workers feel important hence motivated.

Job rotation – Switching jobs to prevent boredom and monotony (but jobs must be of the similar standard)

Perks – Can be such as private health schemes, pension schemes, subsidised meals, discounts on holidays and
travel, cheap mortgages and loans, company cars and discounts when buying the company's products.

Symptoms of poor motivation amongst the workforce include high rates of absenteeism and labour turnover,
poor timekeeping, high rates of waste, low quality output and an increasing number of disciplinary problems.

Ways of Participation of Employees in Decision-Making

Participation of workers in decision-making process by creating a sense of ownership in the company, instills a
sense of pride and motivates employees to increase productivity. Employees who participate in the decisions of
the company feel like they are a part of a team with a common goal, and find their sense of self-esteem and
creative fulfillment heightened.

Participation at the Board Level: Also known as industrial democracy. The representative can put all the
problems and issues of the employees in front of management and guide the board members to invest in
employee benefit schemes.

Participation through Ownership: The other way of ensuring workers’ participation in organizational
decision making is making them shareholders of the company. Inducing them to buy equity shares, advancing
loans, giving financial assistance to enable them to buy equity shares are some of the ways to keep them
involved in decision-making.

Participation through Suggestion Schemes: Encouraging your employees to come up with unique ideas can
work wonders especially on matters such as cost cutting, waste management, safety measures, reward system,
etc.

Participation through Job Enrichment: Job enrichment offers freedom to employees to exploit their wisdom
and use their judgment while handling day-to-day business problems.

Participation through Quality Circles: A quality circle is a group of five to ten people who are experts in a
particular work area. They meet regularly to identify, analyze and solve the problems arising in their area of
operation. Anyone, from the organization, who is an expert of that particular field, can become its member. It is
an ideal way to identify the problem areas and work upon them to improve working conditions of the
organization.

Link each to Maslow (financial are lower needs, non-financial higher needs)
Link to Herzberg; motivators can become hygiene factors.
 Human Resource Planning (H.R.P) is the process of forecasting the workforce requirements of the
business for future years.

It looks at how many employees the business will require in the future, as well as the type of employee that will
be required (e.g. graduate trainees, skilled-manual and supervisors). H.R.P. also ensures that the 'right'
employee is in the 'right' job, to ensure maximum efficiency and effectiveness of the workforce.

Clearly the process of H.R.P. requires that the business make estimates of the number of workers that it believes
it will require at all levels in the business in the future. This can be done in a number of ways:

1. Using past data

2. Analysing the expected future levels of customer demand and sales
3. Estimating the level of labour turnover.
4. Expected changes in working practices ( labour-intensive to capital-intensive or vice versa)

There are a number of factors, however, that will affect the availability of external labour for a business:

1. The rate of unemployment in the area.

2. The extent of the infrastructure in the area (e.g. price and availability of housing or availability of public
transport).
3. Government incentives and subsidies (paying the training costs for the business).
4. The availability of workers with the necessary skills and qualifications.
5. The number of competitors in the area.
 The Human Resource Management (H.R.M) Process

HRM is the management of the employees within the business, by recruiting, training and retaining
employees with the necessary skills and competencies to perform their jobs effectively. 

It covers the following areas:

1. Recruitment and selection of new employees (hiring internally or externally)

- If vacancy available (labour turnover or expansion)
- A job description needs to be written, this outlines the job title, as well as the tasks and the responsibilities
that will be covered by the successful applicant.
- Job specification needs to be written, this goes beyond a description of the job, and it lists the physical and
mental attributes that will be desirable or essential for the successful applicant
- Job advertisements - Appropriate media if hiring internally or externally)
- It is vitally important that the application form is tailored to the specific post that is being advertised, as well
as asking questions that are relevant, legal, inoffensive and essential.
- Candidates short-listed and then asked for an interview. If successful, contract offered.
- Contract of Employment offered (a written statement covering the terms and the conditions of employment)
(e.g. date employment commences, job title, pay, hours of work, holiday and pension entitlements), as well as
the process for disciplinary and grievance procedures.
Necessary for legal issues if need arises.

2. Induction (orientation) – type of non financial motivation. This induction training covers the basics of the
new employee's job, as well as the background details and the history of the business

3. Performance appraisal – feedback; can link to Goleman.

This is the process of measuring the effectiveness of an employee, often using it as the basis for a
promotion or a pay rise. After a period of time working for a business, each employee is likely to be
appraised in order to measure their strengths, weaknesses, qualities and value of their contributions to the
success of the business.
It is common for employees to be appraised annually (BUT time, cost, subjective, qualification)

4. Remuneration packages (salary, pay etc) Financial motivation

5. Disciplinary procedures.
Disciplinary and grievance procedures are frameworks which provide  clear and transparent structures for
dealing with difficulties which may arise as part of the working relationship from either the employer’s or
employee’s perspective.
 let employees know what is expected of them in terms of standards of performance
 identify obstacles to achieving the required standards (for example training needs, clarity of job
requirements, additional support) to enable employers to take appropriate action.
 enable employers and employees agree suitable goals and timescales for improvement in an
individual's performance or conduct.
 try to resolve matters without resorting to courts and litigation
 act as a point of reference for a court case should someone make a complaint about the way they have
been dismissed.

6. Health and Safety issues. Motivation and legal issues

7. Looking after the employees' welfare. Motivation and legal issues

8. Redundancy or dismissal The final role of the H.R.M. department is to make the termination of the
employees' contracts of employment as smooth and efficient as possible.

9. Redundancy. (no longer needed) It will be necessary at certain times (e.g. during a recession, or a
decline in the industry) for a business to 'downsize' its workforce (make a certain proportion of them
redundant).
This process could be done in several ways, voluntary redundancy (where workers opt for a redundancy
package), compulsory redundancy, 'last-in-first-out' (where the most recent appointments are the first to
be made redundant), or retention by merit (where the least effective employees are made redundant).
Dismissal (firing for not doing job properly). This is where the employee is deemed to have broken their
contract of employment, and told that their services are no longer required by the business. Fair
dismissal can be on the grounds of sexual harassment, racial harassment, bad timekeeping, sleeping on
the job, and destruction of business property
Retirement. At the end of their working-life, employees will wish to retire and stop offering their
services to the business. In return, they will often receive a lump-sum payout, as well as both their state
pension and their private pension.
Transfers and Resignation. This occurs when an employee leaves the business and transfers their
services to another business (the employee may apply for a more senior job at another business).

In any case, the contract ends.

However, if an employee feels that they have been unfairly dismissed (e.g. on the grounds of pregnancy,
ethnic background, or union membership), they can take legal action (and may be compensated and/get
their job back)

In all areas of the activities of the business, but especially it seems within Human Resource
Management, the business must ensure that it abides by every piece of legislation, regardless of the
stakeholder group which the legislation protects (e.g. employees and customers).

10. Training (see motivation for details)

How to keep employee morale high
Compared to employees who are motivated, disengaged workers are less efficient, miss more workdays and
cost their employers thousands of dollars in lost productivity. Keeping employee morale high is one of the
best things you can do to instill loyalty and maintain a productive workplace.

Hiring the right people in the first place. Don’t hire, regret and fire.
First, make sure that your people clearly understand their role, their impact on customers, and how they
bring value to the organization. This can be achieved by effective training, orientation and communication.

- Tell employees your objectives for the company and promptly share news that affects the organization.
- Let staff know clearly what your expectations are, and explain the reason for rules or changes.
- Ask workers what motivates them.
- Involve employees as equal members of your team. Make them feel valued and connected.
- Challenge your workforce with new opportunities to use and develop their skills.
- Consult employees before implementing policies that will affect them. Instead of handing down rules like
a dictator, allow staff to give input into creating their own environment.
-Acknowledge, respect and appreciate staff. Recognize small successes with kind and encouraging words
for a job well done. You can reinforce commendable behaviour further by giving inexpensive rewards like
“thank you” cards or larger ones like gift certificates.
- Provide adequate tools and staffing levels to get the job done. If you don’t, they'll feel they're wasting
time and energy on a futile effort.
-Care about your employees, not just about your business. Show an interest in their personal lives and
get to know what's important to them, so you can help them achieve their goals.
- Be fair about discipline. Address performance issues privately and apply discipline consistently, without
favouritism.

Most importantly, be an effective leader. Be honest, fair, and accessible; interact with staff frequently; and
display a positive demeanour whenever possible. Show your employees that yours is a workplace to be
proud of, where great things can happen, and that their efforts are a major factor in its success.

Work-life balance
It is a concept including the proper prioritization between work (career and ambition) and lifestyle
(health, pleasure, leisure, family).
Pressure on employees have increased due to the following reasons
- The concept of 24/7 customer service
- Globalisation has increased the competition
Demands on the workers have increased therefore. Long, unsociable working hours can lead to stress and
ill-health. Work-life balance will reduce stress AND improve the motivation (and hence efficiency) of
workers.
It is suggested to use the following methods to allow for more leisure
- Flexible working. It is a way of working that is tailored to suit the employee's needs and is an alternative
to traditional set working hours. It could include working from home or flexible start and finish times.
- Teleworking. Working from home/via a computer
- Job sharing. 2 people work on the same job and receive half the salary
- Sabbaticals. A period of leave (paid or unpaid) where your job is guaranteed but you can take time off to
pursue other interests.

Policies for diversity and equality

Diversity policy are practices which are a commitment to anti-discriminatory practices to create a mixed
workforce, from different races, religions and genders.

Equality policy is where everyone in the firm is treated fairly and has the same opportunities.
(Many countries have laws that include these)

The advantages of equality

- Promotes an environment with high motivation as you are rewarded for your hard work only.
- Good ethical reputation
- Better qualified candidates will apply there.
- Motivation will rise as everyone knows they will get a fair chance on good performance
- Consumers are more ethically aware and will prefer the firm
The advantages of diversity
- Different perspectives, ideas and creativity
- Can appeal to international consumers (can understand their language and culture) e.g. Harrods will have
Arabic speaking employees and halal food because many Arabs visit it.
- If people with different mother tongues hired, the firm can market products internationally.
- Improves your image with more ethically aware customers