Principles of
Management 6
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,UNIT 6
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Getting to know your unit
Managers are vital to the running of any business; they shape and
Assessm ent influence it through their managerial performance and leadership.
This unit is extern ally In this unit, you will examine how businesses adapt their approaches to
assesse d using a management in response to challenges in their environment. Depending
pre-release task-based on their roles and responsibilities, managers need to develop skill sets
assessm ent marke d and that enable them to work effectively in areas such as people, financial,
set by Pearson . resource and quality management, and managing change. You will
investigate some of the issues that managers and leaders have to deal
with in the workplace to make businesses more efficient and ensure
their survival and growth. The effective planning and organising of a
business’ activity can significantly influence the success of a business.
This unit will help you to progress either to employment, by considering
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a career working in supervision and management and/or to vocational
training. Additionally you might move on to related higher education
having developed a knowledge and understanding of management.
This unit will enable you to understand how the role of management
and leadership in the workplace contributes towards business success.
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How you will be assessed
This unit is assessed under supervised conditions. You will be given a case study two
weeks before the supervised assessment period so that you can carry out research.
The supervised assessment period is a maximum of three hours, which may be spread
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out over several sessions. During this period, you will carry out a task which is set and
marked by Pearson. The total number of marks for the unit is 88.
This table lists the essential content areas that you must be familiar with prior to
assessment.
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Essential content
A The definitions and functions of managemet
B Management and leadership styles and skills
C Managing human resources
D Factors influencing management, motivation and performance of the workforce
E Impact of change
F Quality management
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Getting started
Identify what you already know about the principles of management.
For example, what do you mean by management, does it differ from
leadership? Reflect on the business experience you already have and
consider the types of managers you have encountered.
As you work through this unit, develop your ideas and initial impressions
and extend your explorations across a wider business culture.
A The definitions and functions of management
Definitions of management and leadership
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Managers are often required to also be leaders as the two functions go hand in
hand, but in the business world there is a distinction between being a manager and
being a leader. Leaders are often considered the innovators of the business, while the
manager’s job is to plan, organise and coordinate.
Conflicts exist between the definitions and functions of management and leadership.
In essence, managers are usually responsible for making things happen, but those
things are mostly determined by leaders. Managers will identify resources needed for
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an action to occur, including:
▸▸ physical – equipment required for the task
▸▸ human – the people best suited to the task
▸▸ financial – working within a budget.
Leaders focus on the bigger picture, such as where the business fits within the global
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marketplace. Leaders plan ahead longer term, while managers have a shorter-term
view and focus on getting the job done now and its fairly immediate consequences.
In effect, everyone is a manager of something as they have responsibility, not only for
themselves and their actions, but also a responsibility to others and the aims of the
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business. A manager usually has authority over somebody or something which means
they can make decisions about business practice, for example a retailer offering a
discount.
Employees have responsibilities but may not have the authority to make decisions
without consulting others. The same is true of managers, according to their level of
responsibility and hierarchy within an organisation. Having responsibility without
authority can be difficult to manage but likewise, when you have the authority you are
also responsible for the impact and outcome of the decisions you make.
Management by objectives
Management by objectives (MBO) is a business term for a system of agreeing
objectives so that everyone moves forward in a consistent manner. Managers set and
pass on objectives that have been put in place to help achieve business goals. These
objectives must be linked to strategic plans set out by those managers or leaders at the
top of the hierarchical structure. It is then the responsibility of managers to work out
how the strategies will be implemented by identifying the objectives, for example to
promote a new product or service.
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, Managers do not spend their entire time giving orders and delegating responsibility
Key term
for achieving tasks. Managers are responsible for defining the purpose of tasks so that
Delegate – (when used as the workforce understand why they are completing something, and so are likely to act
a verb) to assign a task or more enthusiastically.
responsibility to another
person. Situational and contingency
Continuum – something Situational and contingency leadership is a theory introduced by Blanchard and Hersey
that continues with gradual in 1969 about how the situation is related to a leader’s (or manager’s) personality and
change over time. behaviours. For example, just as you are likely to vary your personality or behaviour
according to any given situation, so will a manager or leader. Consider if you were a
customer in a bank and just about to pay some money into your account, when the
bank was suddenly under threat of robbery. You would be highly likely to change your
behaviour to match the situation, or find a contingency for what you thought best
matched the situation. Managers and leaders have to react to situations in a similar way.
We shall explore several different management and leadership styles later in the unit
in the section Management and leadership styles.
Functional and action centred
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John Adair developed a model for team leadership and management in 1979
Task demonstrating in a simple, Venn diagram-type model the roles of a leader or manager.
Adair defines action-centred management by three core responsibilities, which are
represented in Figure 6.1:
Team Individual ▸▸ achieving the task
▸▸ managing the team or group, and
▸▸ managing individuals.
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As you work through this unit, you will learn more about how managers and leaders
▸▸ Figure 6.1: John Adair’s action- do this and the skills they need to achieve the planned outcome.
centred model
Transformational and transactional
These are two types of leadership or management approach which are distinctly
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different, as shown in Table 6.1. It could be argued that one style complements the other.
▸▸ Table 6.1: Transformational and transactional styles of leadership
Transformational style Transactional style
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Considers the much bigger picture and takes a Concerned about getting the job done with
more strategic view to achieving greater goals. little disruption to normal operations. Likely
This style adopts an approach of investing time to follow process and systems and will use
and effort now to reap rewards in the longer various techniques or incentives to encourage
term. Targets are important to push employees employees to give their best by being motivated.
to aspire to greater things and receive rewards Generally short-term goal focused and responds
which are commensurate. This style is likely to quickly.
produce tomorrow’s managers and leaders.
Discussion
In a small group discuss the advantages and disadvantages of each style of
leadership: transformational and transactional.
The concept of leadership continuum for management behaviour
Leadership continuum is a concept originally defined by Tannenbaum and Schmidt
in 1958 and updated in 1973. Like many theories on management and leadership, it
has been studied and critiqued by theorists and concepts vary according to situational
factors and developments in business practice.
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This theory suggests an imaginary line along which various styles of management or
leadership can be placed to help explain how behaviours influence the decisions made.
Autocratic Free reign
▸▸ Figure 6.2: The leadership continuum
For example, a manager or leader who lets their subordinates suggest or try out new
ways of working sits at the far right hand side of the continuum. However a manager
Key term
who likes to keep control and tell their subordinates how it will be done, sits on the far
left hand side and adopts an autocratic style. There are several stages in the process Autocratic – controlling, not
along the continuum which will vary according to behaviours. It is suggested that taking views of others into
the more successful and effective managers are those who know which behaviour is account.
appropriate to the situation. Douglas McGregor developed ‘Theory X’ and ‘Theory Y’ in
the 1960s. They are management theories that describe two models of how managers
motivate their workforce. Theory X stresses the importance of strict supervision,
external rewards and penalities. Theory Y, on the other hand, stresses the importance
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of job satisfaction and working without direct supervision.
Reflect
What style of management do you think you would prefer to work under? Why?
Functions of management and leadership
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You have considered some differences and similarities between managers and leaders
and will now explore the functions relating to those roles.
Functions of management
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Planning
Planning is a management function. Managers need to plan to implement strategic
objectives. As suggested earlier, part of a management role is to ensure a task can be
carried out within pre-determined boundaries. For example, when BT decided they
should move some of their off-shore overseas call centres back to the UK, following
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perceived customer service issues, it would be the managers’ responsibility to make
this happen. To initiate a plan to execute this large-scale operation, managers would
have needed to consider many different factors, although this would be the case
regardless of the size of the operation.
Organising
The plan provides a framework for managers, which in this example of BT would
involve several managers, to organise teams, schedules, resources, budgets, and every
other aspect of the operation. Managers would need to organise a series of events
before moving their call centres to UK sites. The plan would need to ensure sufficient
stages were in place so that customers could still continue to make contact with BT
without disruption to services.
Coordinating
The team of managers in this example, would need to work together to coordinate
such a large task. On a much smaller scale, for example a department manager in a
store such as House of Fraser, the manager would be responsible for coordinating the
entire operation and would delegate duties to team members.
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, Controlling
An important function of management is taking control of different parts of the
business. This could be a manager controlling their team, ensuring they are all working
effectively and behaving appropriately. Managers also often have control of projects
or particular business functions and within this the budgets and processes of those
projects and functions. It is important that managers understand what they need to
control and take appropriate steps in order to do so.
Monitoring
Every plan requires monitoring to review its effectiveness and progress towards
meeting objectives within the timeframe, just as you and your tutor monitor your
progress to ensure you meet your deadlines. Managers will need to monitor the
effectiveness of teams, evaluate what is working well and where gaps or weaknesses
appear. Plans may need to be changed and milestones shifted.
Reflect
What skills do you think are crucial for managers? How effective are your skills in
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these areas?
Delegating
A key part of a manager’s role is to delegate. All managers will have tasks and elements
of the job they must do themselves, for which they are given responsibility, but it is
also their job to delegate some tasks to their subordinates. Managers will often be
delegated tasks by their own senior managers, but part of a manager’s role is to act
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as an interface and identify the best-suited subordinate for certain tasks. This might
include identifying who has capacity, the skills or even who already has that sort of
task as part of their job description.
P ause point Cover this page and draw a mind map of the different functions of management.
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Hint Think about a manager’s day-to-day job. What functions do you think they use the most?
Extend Consider how the plans for the Olympic Stadium were monitored to ensure work
was completed on time and within budget. Which function do you think is most
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important to a manager on a project of that scale?
Functions of leadership
Inspiring
Key term Leaders are expected to inspire and innovate. They are the driving force of the business,
Autonomy – the freedom looking at the long-term vision and devising strategies to achieve the business goals.
to make decisions and take They make the top level decisions which directly affect the business and have the power
action, independent of to change the business’ direction by challenging suitability of decisions. Leaders look at
others. the bigger picture. They have much more autonomy than managers.
Energising
Leaders must energise their teams. What this means is by bringing inspiration and
innovation to business ideas, they indirectly inspire. Leaders have direct responsibility
and management of those immediately below them who are managers. Depending
on the structure of the organisation, there can be few or many managers and in a very
large organisation they may have managers beneath them. Consider the BT scenario
where there are thousands of managers employed. Leaders will energise their direct
subordinates and expect managers to cascade that energy downwards.
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Influencing stakeholders
Another leadership function is to influence stakeholders. Stakeholders take an interest in
the business and want to know whether the products or service they purchased are secure.
It is up to leaders to influence stakeholders in their view that the business is going in the
right direction. If the business is like BT and has shareholders, they will pay particularly
close interest to the business as they want to see a greater return on their investments.
Envisioning
This is the term for looking to the future to envision what the consequences of actions
and proposals are likely to be. Leaders will rely on having credible information to base
their judgements on, such as a financial forecast or analysis of competitors’ operations.
Determining best path/route to achieve success
It is the leader’s responsibility to determine the best path or route to achieve business
success. They will need to convey their intentions to managers in order for the vision
to become reality. Leaders need to have a complete overview of business operations
– what has worked, what has not worked and why. Based on this knowledge, which
is established by frequent monitoring and evaluation of sales figures, productivity,
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profits, costs, market share etc leaders can make informed decisions which affect the
success of the business.
Business culture
Definition
Business culture can be defined as the way in which things are done in a company or
organisation – its style or ethos. As a model of business operations, business culture
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will influence how employees deal with customers, other staff and management. Take,
for example, the business culture of McDonald’s or various different travel agents and
the major cruise lines, where employees are valued and recognised for a job well done
through recognition schemes (‘employee of the week/month’), just as the retail sector
often offers staff discounts. This recognition fosters a culture and a sense of belonging, like
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a large family, which bonds employees and has a positive effect on customer relations.
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▸▸ The Tupperware ‘family’ spread across the world in the 1960s
American-founded business Tupperware became a household name in the UK
during the 1960s. Despite being sold directly to the public through home parties by
individuals known as Tupperware dealers, the ethos of belonging to the Tupperware
family was a well-engrained culture.
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, Business vision, mission and values/ethos
Key term
A business culture is determined by its vision, mission, and associated values or ethos.
Model – copy, behave in A positive business culture can easily be destroyed, so it is crucial to communicate the
a similar way, replicate the vision so it is understood by all stakeholders. Consider how well staff in McDonald’s
intentions of the vision. model the values and ethos of the business; while in a similar vein, it is claimed that
Intonation – what can be the workforce for a major soft drinks brand are not allowed to be seen drinking their
inferred from, or is implied major competitor’s brand.
by, an indication of intention
Influence of business culture on management practices
of a communication.
The business culture influences management practices, for example, the way managers
Paternalistic – a
communicate, behave and value their employees and customers. Consider the
management approach that
business culture of Volkswagen with the 2015 revelation that vehicle emissions were
involves a dominant figure
fraudulently portrayed. It takes a strong management team to instil confidence back
who treats employees like
into its teams and stakeholders in such adverse circumstances.
members of an extended
family and expects loyalty, Link
trust and obedience in return.
When you consider the positive practice by management and employees in the
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Little Italy Case Study in Unit 1: Exploring Business, the influence of business culture
is evident.
Policies and procedures
Business culture influences policies and procedures. Although these are built around
a framework of legislation and regulations, how they are interpreted represents the
culture of the business. For example, consider the notices you might have observed
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when visiting a hospital or perhaps a doctor’s surgery around the zero tolerance of
any aggressive behaviour towards staff members. Messages conveyed represent the
culture of the organisation and influence how its employees are likely to behave.
Discussion
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Discuss the message or intonation of some policies from part-time jobs or places
of study and the business culture they reflect. Do you see any similarities or
differences between the types of companies?
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Management styles
Business culture affects and influences management styles. First, the country and
demographic has an effect, which is seen when considering the examples of McDonald’s
and Tupperware. American-born leaders and companies often encourage use of first
names and a friendly manner whereas in Germany, this might be considered to be
impolite. In some British businesses, the use of titles and last names is still common, such
as senior airline staff and some doctors’ surgeries, dental practices and solicitors.
The structure of a business is often influenced by national characteristics and this is
likely to be reflected in both the way the business operates and the titles used. In parts
of Asia and Europe, the management style is likely to be autocratic, whereas in the
United Arab Emirates (UAE) the style is directive and paternalistic, where instructions
are given and it is expected that they will be followed.
Structure of the workforce
The structure of the workforce also reflects the business culture. Where individuals are
placed on the organisational structure reflects and impacts on the business culture.
Hierarchical structures tend to have very few people, sometimes only one person, in
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charge of the entire workforce or with a single layer of managers in between. As this
type of structure is associated with one person in overall charge, and speedy decision-
making, it is likely to generate a culture that is autocratic. On the other hand, a holocratic
structure encourages a business culture which is open and democratic.
Link
You will have covered holocratic structures in Unit 1: Exploring Business. Take a
look at Figure 1.5 to remind yourself.
Research
Carry out research into at least one business for each type of management and
leadership style. Suggest reasons why these businesses use the style they do.
How people work
Organisational structure impacts on the way people work. Consider an example of an
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open and democratic structure with a culture that encourages new ideas, proposing
changes and creating new opportunities. Employees are likely to be motivated and willing
to try new things. This can be seen at Google, where staff are encouraged to be innovative
and to propose ideas through the use of creative workspaces in multiple environments
(for example, outside spaces). Staff members there might be more likely to demonstrate
creativity and propose new ways of working, whereas this may be less likely in a more
autocratic business culture. Many companies operate somewhere in the middle, where
people are often willing to offer ideas but not at the expense of business success.
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The way a business treats its employees also impacts on how employees feel. For
example, Virgin, despite their huge workforce, often report employees feeling as
though they are part of a family.
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Discussion ▸▸ How does it help a business if
employees feel part of a family?
In a small group or pairs, discuss the type of culture in your place of study or work
and its relationship with the way people work.
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Case study
About turn!
Within the armed forces the functions and culture of its people are clearly defined.
The British Army consists of the General Staff and the deployable Field Army
and the Regional Forces that support them, as well as Joint Elements that work
with the Royal Navy and Royal Air Force. The Army carries out tasks given to
it by the UK government. Its primary task is to help defend the interests of the
UK, which consists of England, Wales, Scotland and Northern Ireland.
The command structure is hierarchical with divisions and brigades responsible
for administering groupings of smaller units. Major Units are regiment or
battalion-sized with minor units being smaller, either company sized sub-units
or platoons. All units within the service are either Regular (full-time) or Army
Reserve (part-time), or a combination with sub-units of each type.
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, Unit names differ for historical reasons. An infantry regiment is an
administrative and ceremonial organisation only and may include several
battalions. An infantry battalion is equivalent to a cavalry regiment. For
operational tasks a battle group will be formed around a combat unit,
supported by units or sub-units from other areas. Such an example would be
a squadron of tanks attached to an armoured infantry battle group, together
with a reconnaissance troop, artillery battery and engineering support.
The Army Reserve has two clearly defined roles. Firstly, it provides highly
trained soldiers who can work alongside the Regulars on missions in the UK
and overseas. Secondly, it gives people who have specialist skills, like medics
and engineers, a range of exciting opportunities to use them in new ways.
Each unit is reliant on clear goals and directive leadership, drawing on
multiple skills. New recruits are transformed into fully trained and highly
skilled personnel. Management and leadership roles are functional and
action-centred, with the ability to perform multiple functions, from careful
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planning through to execution of every manoeuvre. Leaders closely monitor
the effectiveness of individuals and how they interact as teams. They are
expected to inspire and energise and use an enormous amount of personal
energy on motivating their teams. Most of all they need to ensure success and
will involve teams in deciding upon the most appropriate route and suitable
contingencies. In essence they are risk managers.
Being able to form teams who can work efficiently and effectively together
requires refined observation skills and the ability to interpret behaviours
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and anticipate reactions. Managers and leaders expect full compliance
with the policies and procedures and employ strategies to ensure they are
implemented for maximum impact. For example, they will need to undertake
risk assessments to make allowances for different situational factors according
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to the terrain or the territory, whether at home or overseas. They need to plan
for, and coordinate, resources and delegate tasks to teams and individuals.
Check your knowledge
1 How would you define the management and leadership in this example
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of the Army Reserve?
2 What are the main functions of the officers as managers?
3 Why do officers and troops need to plan thoroughly for their
manoeuvres?
4 What contributes to the culture of the Army Reserve?
5 What are the main functions of the officers as leaders?
Think about your centre’s management or leadership team. List the functions of
P ause point
management they use within their jobs.
Hint Does your centre have a mission or vision statement? How does this impact on how
managers or leaders work within your centre?
Extend What sort of impact do you think a new leader would have on a business’ culture?
70 Principles of Management
