COURSE WORKBOOK FOR

Principles of Leadership &

Management
LEVEL3 DIPLOMA IN BUSINESS ADMINISTRATION

LEARNING OUTCOMES
1. Understand the principles of eff ective decision-making
2. Understand leadership styles and models
3. Understand the role, functions and processes of management
4. Understand performance measurement

©Results Consortium Ltd. All rights reserved

www.resultsco.org.uk
Page 2

HOW TO USE THIS WORKBOOK?

• Read each question carefully and highlight key words such as analyse, describe, discuss, explain, identify,
justify, and recommend with reasons and state. Please refer to the ‘Glossary of Key Words’ below
• There is not always a single correct answer for a question and marks will be awarded for all valid responses
• Penalties for contravention of the rules relating to plagiarism and collaboration - Please refer to college’s
plagiarism policy provided in the student handbook

CONTENTS
Decision Making------------------------------------------------------ ------------ Page 3 - 5

Leadership Styles------------------------------------------------------ ----------- Page 6

Motivation Theories----------------------------------------------- --------------- Page 7 - 10

Roles & Fucntions of Management------------------------------------------- Page 11 - 14

Management & Leadership Theories------------------------------------------Page 15 - 16

Performance Management----------------------------------------------------- Page 17 - 19

Management Information Systems------------------------------- ----------- Page 20 - 21

LEARNER DECLARATION
FULL NAME
STUDENT ID BATCH

I declare that this assignment is my own work and that I have correctly acknowledged the work of others

SIGNATURE DATE
Page 3

GLOSSARY OF TERMS
Meaning Example

Analyse
Separate information into
components and identify their
characteristics.
Discuss the pros and cons
(advantages and
disadvantages) of a topic or
argument and make reasoned
comment.
A chair is used for sitting on. It can be used for standing on to reach
something but its most common purpose is to be sat on. It normally
comprises a seat; a backrest and is supported by legs.
Most chairs have four legs spaced to give stability to the chair. Chairs can
have three legs, again it is the positioning of the legs under the seat which
provides the stability and makes a chair fit for purpose.
Chairs can be made in many different styles and use a variety of materials.
The design and material choice are reflected in the cost of the chair.
Traditionally chairs were made of wood however there is now a vast array
of materials used in chair production such as metal, plastic, rubber and
fabric. The material used will affect the weight of the chair. Chairs are often
used alongside a table, for example whilst eating or working. They are
used to support body
weight in a sitting position. The height of a chair is very important as if it
was too high or too low it would not function at a table and may be
uncomfortable.

The chair I am considering has several strengths. It is made from a material

Evaluate
Make a qualitative judgement
considering different factors
and using available
knowledge / experience /
evidence
which is hardwearing and with maintenance and care this chair could last
me a lifetime. If the chair got marked, chipped or damaged it could be
remedied by me, at home. This would avoid having to find a specialist and
having to travel to or haul the chair a great distance, at great cost. Another
strength the chair has is its design. Because the back rest is moulded to an
adult spine, it is possible to remain sitting on it for hours without feeling any
discomfort.

The main weakness of the chair is its colour. It is made from a light wood
and as a long-term investment this may not compliment the shades and
style of the room, as it develops. Also, there is some intricate design on the
back rest which could make cleaning difficult. This could result in a build-up
of dust which would look unsightly.

A chair is used for sitting on. It normally comprises a seat; a backrest and is
Explain supported by legs. The legs are positioned in such a way to balance the
chair, so that when it is sat upon it does not collapse or become unstable.
To give account of the Chairs can be made in many different styles and use a variety of materials.
purposes or reasons The design and material choice are reflected in the cost of the chair. Chairs
are often used alongside a table, to support body weight at a convenient
height whilst doing something at the table. Chairs can be produced in
different sizes to make them suitable for individuals e.g. a child.
Page 4
DECISION MAKING
Decision making process

We make decisions all and every day. What to wear, what we have to do at work, what do to with
the children when we pick them up from school and so on and so on… let's face it - our lives are full
of decisions. Some we can make on autopilot as they are simply not that involved, while others take
careful planning and thought processes to ensure we make the best decision possible. Usually this
is because the decision that needs to be made is one that has significant impact if we make the
incorrect one.

1 Defining the Problem 3 Develop Potential Alternatives

The first step is to define the problem, or we
could say, 'What are we trying to fix?' For our
purposes, we will use someone who wants to
purchase their first home, a pretty big step in
a person's life and something that we have to
give a lot of thought to in order to make sure
we pick the right house.
Just wanting to purchase your first home is
not really a problem; thus, the problem
needs to be defined more. So, in this case,
the problem is we are tired of renting an
apartment and want a place of our own so
we can get some equity and not just pay rent
each month and get nothing from it.
Here you will be looking at what alternatives
are available to help you get to your goal.
Since we know our limiting factors, we can
now develop alternatives to help us address
those factors and help us with our problem.
For example, we could review the following
potential alternatives:
• Stay where you are and not buy a home
(though that's really not solving the problem)
• If the house you really like is more money
than you can afford, you can cut back on
other expenses or get a roommate to help
pay the monthly mortgage.
• You could purchase a bike and ride to the
bus stop if it's not close enough

2 Identifying Limiting Factors 4 Analyze the Alternatives

Next we have to identify limiting factors. For
this step, we need to review all the factors
that could stop us from actually solving the
problem - basically, things that would get in
our way to stop us from fixing the issue that
we want to fix.
For our purposes, we will assume you have
the money to put down and are ready to
become a homeowner. Now, let's say we
have the following limiting factors:
• You can only afford £600.00 a month for a
mortgage payment
• You do not own a car and have to take the
bus to work, so the house needs to be near a
bus station
• You need three bedrooms and two
bathrooms
You will take each alternative you have and try
to determine, in order, what is the most
feasible to the least feasible.
• You might not be able to find a roommate
you can actually live with
• You might realize that two bedrooms is
simply not going to work for the space you
need
• Cutting back on expenses is something you
could do and work with while you find ways
to solve the other issues as time goes by
5 Implement the Alternative
Thus, if you start looking for homes and
realize the one you want that fits all your
criteria except for monthly mortgage is higher
than you would like, your best alternative is to
cut back on your expenses to afford the home.
Page 5
DECISION MAKING
Read the following case study and answer the questions in the next page

Case Study

Manuel wants to open a restaurant. The first step is to define the goal. He realises that he needs a
physical location for his kitchen and a dining room for his customers. Therefore, Manuel must decide
on a way to acquire a space for his restaurant.

Now that Manuel has defined the goal, he needs to collect the relevant information. This is to identify
his options. He needs to collect information to make an informed decision. Manuel will turn to
research to find the information. It's also important that he knows what type of information is
relevant. He'll need information on restaurant spaces and real estate options, such as purchasing and
leasing. He'll also want information on his target market.

Once Manuel has collected all the relevant information, he can determine his alternatives. Manuel
could rent a building or purchase a building for his restaurant. He also must consider different
locations. After Manuel has identified all his options, he needs to analyse them. He will do this
considering his overall goals, the feasibility of each alternative and the costs and benefits of each
alternative. For example, Manuel may want to open a trendy fine dining establishment catering to
young, urban professionals

He also must consider feasibility. This means he need to weigh positives and negatives of each
options. Manuel may not have the funds available to buy or lease space in the trendiest part of the
city. One of the most important things he will do is weigh the relative costs and benefits of each
alternative. For example, there will be advantages and disadvantages in owning a building compared
to leasing space. The costs involved in owning may well outweigh the benefits for a new restaurant.
He’ll pick the most feasible alternative that meets his goal and has the most benefits for the least cost.
For example, he may opt to lease a building in an old but trendy area of city that is undergoing an
urban renewal with up-and-coming young professionals as its occupants. This alternative reaches his
target market better than suburban locations and is cheaper than the rent in the city.

The next step for Manuel is simply to implement his decision. He'll find a location in his target area
that's for lease and attempt to negotiate lease terms beneficial for him. After leasing the property,
Manuel can start getting it ready for his new restaurant.

The final step in Manuel's decision-making process is to review and assess his decision. Manuel will
review his decision. He will assess his choice against his goals to figure out whether the decision was
feasible and determine the costs and benefits arising out of the decision. For example, Manuel will
assess whether the revenue generated by his restaurant can support the rent and whether the
location brings in his target market.

After his assessment, Manuel will adjust his decision as needed. For example, if he determines that his
rent is too high given his revenue, he may opt to seek a different location after his current lease
expires or raise his menu prices.
Page 6
DECISION MAKING
Explain the importance of Manuel defining the objectives, scope and success criteria of the
1.1
decisionsto be taken?
Defining an objective will help Manuel to work towards achieving his goal and helps him
achieve the goal. Before getting into the business, he should assess the scope and weigh
the positives and negatives of each options to be successful. Once Manuel set the goal
and scope, he can start identifying the challenges which could develop in the stages of the
decision making process so that he will be able to solve the problems. In order to
understand that, he can collect information regarding the opportunities, strength, weakness
and threats and review his decision and adjust it if needed.
Assess the importance of Manuel analysing the potential impact of decision making? 1.2

Manuel should consider the positives and negatives of each option before he opens a
restaurant to analyse the risks of owning a business and to see if there are any other
alternatives. For example, considering the advantages and disadvantages in owning a
building compared to leasing space. The costs involved in owning a restaurant may well
outweigh the benefits for a new restaurant. So he can choose a lease option in an old but
trendy area of city which could develop in the future where he may get young customers as
Explain the importance of Manuel obtaining sufficient valid information to enable effective
its occupants. 1.3
decision-making?
Collecting valid information will help him to understand more about the advantages and
disadvantages of starting a new restaurant, so that he can take a better decision looking at
the other options or alternatives.

Explain the importance of Manuel aligning decisions with his restaurants’s objectives, values
1.4
and policies?

Else, the business will not be successful. For example, if the location is perfect to open a
new restaurant but he does not have enough fund to purchase the property in that place,
he has to look for other alternatives and take decisions accordingly.

Explain how can Manuel validate information used in the decision-making process? 1.5

He can review and assess the decision and recheck whether his decision if it is appropriate
by collecting the opinion and views of people living in the area and by weighing the
advantages and disadvantages of each.

Explain how can Manuel address issues that hamper the achievement of targets and quality
1.6
standards?
Manuel has to make adjustments in his decision as needed if there arises any issue that
hampets achieving the target. For example, if he feels the rent is too high given his
revenue, he may opt to seek a different location after his current lease expires or raise his
menu prices.
Page 7

2.2
LEADERSHIP STYLES
Leadership styles & its fit in the workplace

As a leader, it's important that you find and develop a leadership style that works best for the type of
business environment that you are in. Let's take an in-depth look at several styles of leadership
including authoritative, participative, laissez-faire, situational, and bureaucratic; and what type of
workplace environment is the best fit for each.
Can you recall a time that you may have witnessed a drill sergeant barking orders to members of the
military? It was clearly evident that the drill sergeant was in complete control and in a position of
authority. This is an example of the authoritative leadership style, which can be defined as a style
where a leader has total control over subordinates (those who report to the leader) and is the sole
authority figure that makes decisions with minimal or no input from others.
When people participate in something, it means that they are involved with others or with a specific
thing. The participative leadership style is when a leader involves subordinates and others when
making important decisions for a business, but the leader has the final say in the decision. This style
of leadership centers around the fact that although others may participate and give their opinions,
the final decision still lies with the leader.
The leader acts as a facilitator and supplies any materials or resources the subordinates may need to
complete the task. The characteristics of the laissez-faire leadership style include having the ability
to trust those around you, believing in a hands-off approach, and having little to no anxiety issues.

Below are three scenarios which demonstrates various leadership styles. You must identify the
leadership style used in each situation and evaluate the suitability and impact of different
leadership styles in different contexts

Scenarios Leadership style, its

suitability & impact
Imagine that you are employed as the manager of a software Laissez-faire leadership
company. You and your team have been tasked with
designing a program to help children learn to read and write. Team members approach the
You have decided that each employee has the right to create leader only if they have any
their own programs, as long as they meet the requirements of doubts or concerns as they have
educating children. You have provided no other rules or the right to create their own
regulations, and the team does not have to consult you at all programmes.
unless they have questions

Authoritative leadership. The

A forklift has its forks raised in the air to put some material in supervisor is being harsh while
the racks. An employee darts under the forks (safety violation) advising the employee not to
repeat the mistake again and
so he can get back to his workstation in time. As the
noting it in his log.
supervisor you tell him very sternly not to ever do that again
and notes it in his log.

Participative leadership. The

You lead a team of research scientist working on new ways to team is innovative, yet the final
decision is made by the team
use plastic. Although the team discusses the merits of each
leader.
ideal and project, you retains the final decision making
authority.
Page 8
MOTIVATION THEORIES
Maslow’s Hierarchy of Needs

Needs theories attempt to identify internal factors that motivate an individual's behavior and are
based on the premise that people are motivated by unfulfilled needs. One of the most popular
needs theories is Abraham Maslow's hierarchy of needs theory. Maslow proposed that motivation is
the result of a person's attempt at fulfilling five basic needs: physiological, safety, social, esteem and
self-actualization.
• Physiological needs are those needs required for human survival such as air, food, water, shelter,
clothing and sleep.
• Safety needs include those needs that provide a person with a sense of security and well-being.
Personal security, financial security, good health and protection from accidents, harm and their
adverse effects are all included in safety needs.
• Social needs, also called love and belonging, refer to the need to feel a sense of belonging and
acceptance. Social needs are important to humans so that they do not feel alone, isolated and
depressed. Friendships, family and intimacy all work to fulfill social needs.
• Esteem needs refer to the need for self-esteem and respect, with self-respect being slightly more
important than gaining respect and admiration from others.
• Self-actualization needs describe a person's need to reach his or her full potential.

The following story of John will help you understand Maslow’s Hierarchy of Needs in a simpler
context.

John is a young boy who just started his summer vacation and cannot wait to go outside and play
with his friends. As he walks towards the door he hears his stomach growl and realizes that in his
excitement he forgot to eat. John knows that he won't be able to have fun playing outside if he is
hungry, so he stops off at the fridge and grabs a bite to eat, as well as a bottle of water to take with
him outside in case he gets thirty.
John has now satisfied his basic physiological needs.

Once outside John notices a creepy individual in a van sitting down the street who is offering his
friends some bottled water to drink. Just then, John realizes he left his bottle of water sitting on the
kitchen counter. John sure is thirsty, but this man makes him feel unsafe. Unfortunately, the need to
satisfy his thirst is stronger than his need for safety, so John approaches the van and asks the man
for some water to drink. When the man turns around, John sees that the man is none other than his
teacher Mr. Jenkins. John's need for safety was fulfilled once he recognized that he was no longer in
danger, but even if this need was not met, John still would have been able to fulfill the lower-level
physiological need by getting water (even if the guy did not turn out to be someone John knew)

After playing outside for a few more hours with his friends, which satisfies John's social needs, a
new kid on the block joins them. John's friend Mark introduces the new kid as Bruno. Bruno starts
to bully John, which makes John feel unsafe. Even though John wants to continue to fulfill his social
need by hanging out with his friends, he chooses to go back inside because his need for safety
overrules his social needs. When John gets back inside, he reflects on how much self-respect he has
and knows that he did not deserve to be treated like that by Bruno. He gets bored quickly and feels
left out, so he heads back outside. John's social needs become more important than his esteem
needs; while John knows Bruno will continue to insult him, he cares more about fulfilling his social
needs by hanging out with the larger group.
Page 9
MOTIVATION THEORIES
John’s story - Continued ...

John really wants to be the most popular kid in his group; this is John's self-actualization need. He
sees that goal getting closer when Bruno starts to pick on Mark, who currently holds the title of
'most popular'. John knows he could join Bruno and show that he is cooler than Mark and thus,
more popular. However, John fears this may cause Mark to dislike him, and John's need for esteem
and respect are more important to him than his need for self-actualization. So, he asks Bruno to
stop teasing Mark. John knows there will be other chances to steal the title of 'most popular,' which
won't tarnish his reputation as a nice guy.

Maslow’s Hierarchy of Needs

Frederick Herzberg studied the connection between workplace motivation and employee
attitude. His research led him to develop the two-factor theory, which is based on the assumption
that there are two sets of factors that influence motivation in the workplace by either enhancing
employee satisfaction or hindering it. The first of the two is called hygiene factors, which cause
dissatisfaction in the workplace, are extrinsic to the work itself, and are linked to things such as
compensation, job security, organizational politics, working conditions, quality of leadership, and
relationships between supervisors, subordinates, and peers. The second factor is motivators or
satisfiers. These are linked to employee motivation and arise from intrinsic conditions of the job
itself. Factors for satisfaction include responsibility, job satisfaction, recognition, achievement,
opportunities for growth, and advancement.

Applying Herzberg's Two-Factor Theory

One would think that an easy way to improve employee motivation would be to decrease things
that cause dissatisfaction and increase those things that cause satisfaction. However, it is not that
simple. Herzberg argued that remedying the causes of dissatisfaction does not lead to satisfaction.
Nor will adding satisfiers eliminate dissatisfaction. That is because the opposite of satisfaction is no
satisfaction, and the opposite of dissatisfaction is no dissatisfaction.

Frederick Herzberg developed the two-factor theory.

Frederick Herzberg
While I understand Herzberg did not put this into the simplest of terms, a clearer explanation of this
idea can be seen in this scenario: You work in an office where the roof is constantly leaking, the
computers are always shorting out, and you never seem to be able to catch up on your work
because of it. Suddenly, you are informed that you will be receiving an award for meeting last
month's sales quota. The award, which is a satisfier, would not eliminate your dissatisfaction with
the inadequate working conditions. While you might be happy for a short moment when you
receive your award, once you return to your office and realize that the roof is still leaking, your
computer doesn't work properly, and you're still behind, you will quickly remember how unhappy
you are.

A manager must be sure to provide sufficient hygiene factors while at the same time building
satisfiers or motivators into employee jobs. In essence, hygiene factors are necessary to be sure a
subordinate is not dissatisfied, and satisfiers are needed to motivate an employee to work towards
a higher level of performance. Much like making your peanut butter and jelly sandwich, it's all
about finding the right balance.
2.
Page 10
MOTIVATION THEORIES
To begin eliminating things that are causing employee dissatisfaction, the manager needs to fix
problems related to things such as ineffective policies, noncompetitive wages, and job insecurity.
Then, a manager should begin to foster a supportive culture, provide meaningful and challenging
work, and offer effective leadership, showing respect and dignity for subordinates. Each of these
activities helps a manager to reduce job dissatisfaction and make the first step towards motivation.

To create satisfaction, a manager needs to provide job enrichment by addressing what motivates
employees to do their job, then finding out how to make it better and more satisfying for the
employee. This is accomplished by designing jobs to be challenging and rewarding. Employees
should be given opportunities for growth, provided professional development activities to ensure
achievement, be given more responsibility, and acknowledged for their contribution to the
organization and team. Essentially, employees should be given the opportunity to excel at what they
do best.

As a manager, you should be sure to take the time to get to know your employees. Find out why they
are happy and why they are dissatisfied. Offer your employees the opportunity to take on additional
challenges and reward them accordingly. In essence, make sure you give your employees their wings.

Comparison of Herzberg and Maslow Models

Both the models are dealing with the same problem. Maslow
talks in term of human needs whereas Herzberg talks of goals
which satisfy those needs. Maslow describes various factors
which impel a person to behave as he does whereas Herzberg
tells us what makes a man satisfied or dissatisfied with his job,
which depends very much on factors available on or off the job.
Both models represent the two sides of the same coin.

Maslow is helpful in identifying needs or motives and Herzberg

provides us with insights into goals and incentives that tend to
satisfy these needs. If we know the high strength needs
(Maslow Theory) of individual which we want to influence, then
we should be able to determine what goals (Herzberg) we Abraham Maslow
could provide in the situation to motivate those individuals. On
the other hand, if we know the goals of the people, the want to
satisfy, we can very well predict their high priority needs.
Hersey and Blanchard have combined these two things (needs
and goals).

Physiological, safety, social and part of the esteem and status

needs under Maslow Model are all hygiene factors under
Herzberg model. The esteem needs are divided because there
is a different between status and recognition. Status may be
classified with physiological, safety and social needs as a
hygiene factor while recognition is classified with esteem as a
motivational factors.
Frederick Herzberg
Page 11
MOTIVATION THEORIES
Keith Davis (1964) has shown integrated relationship between Maslow's theory and Herzberg's
theory as shown below :

Maslow’s Hierarchy of Needs Herzberg’s Two Factor Theory

Work itself
Self-Actualisation

M o tivato r s
Achievement
Possibility of growth
Responsibility
Esteem Needs
Advancement
Recognition
Status
Social Needs
Interpersonal relationship with
Hygiene factors

supervisors and subordinates

Technical supervision
Safety Needs
Company policy
Job security
Physiological Needs Working conditions
Salary

Analyse theories and models of motivation and their application in the workplace

Maslow's hierarchy of needs and Herzberg's two factor theory are very useful for employee
motivation at work place.

Herzberg's motivation theory is based more on money/rewards, incentives, achievement,

however this theory does not fully explain the different types of needs an employee have in the
different stages of their work life. Many employees may feel monotonous doing the same job
without any progression. But if they get enough recognition and appreciation, they will be
motivated.

On the other side, Maslow's theory focuses on motivating people based on their desired needs
such as psychological needs, safety needs, self esteem needs, social needs and self
actualization needs. Each organization should identify the current requirements and needs of
an employee before planning for motivational strategies because workers might be in different
levels of their needs.

An individual may revert to increase the satisfaction of a lower-level need if a higher- level
need aggravates. Maslow gives priority to different types human needs at a time, whereas
Herzberg looks at external factors, but both theories are related to motivating the employees at
work place.
Page 12
ROLE & FUNCTIONS OF MANAGEMENT

Functions of management

Management involves far more than just telling others what to do. Before any of you decide that
you think you can do your boss's job, let's take a look into more of what a manager does. The major
functions that a manager completes can be categorized into four different functions known as
planning, organizing, leading, and controlling. For some of us, we only see the final two - leading
and controlling - but you should know that for every managerial behavior you do see, there is an
equal amount that you do not. Behind the manager's closed door, he or she spends a good deal of
his or her time planning and organizing, so that he or she can effectively carry out the functions of
leading and controlling.

Given below is the example of Melissa, a Marketing Manager, exercising various functions of
management in order to increase the sales.

Planning Organising

Melissa needs to first spend time mapping out the
necessary steps she and her team of sales
representatives must take so that they can
increase sales numbers.
These steps might include things like increasing
advertisements in a particular region, placing
some items on sale, increasing the amount of
required customer-to-sales rep contact, or
contacting prior customers to see if they are
interested in purchasing additional products.
The steps are then organized into a logical pattern
so that Melissa and her team can follow them.
This step requires Melissa to determine how
she will distribute resources and organize her
employees according to the plan.
Melissa will need to identify different roles
and ensure that she assigns the right amount
of employees to carry out her plan.
She will also need to delegate authority,
assign work, and provide direction so that
her team of sales representatives can work
towards higher sales numbers without
having barriers in their way.

Leading Controlling

In this step, Melissa spends time connecting with
her employees on an interpersonal level. This goes
beyond simply managing tasks; rather, it involves
communicating, motivating, inspiring, and
encouraging employees towards a higher level of
productivity. Not all managers are leaders.
An employee will follow the directions of a
manager because they have to, but an employee
will voluntarily follow the directions of a leader
because they believe in who he or she is as a
person, what he or she stands for, and for the
manner in which they are inspired by the leader.
In this step the manager evaluates the
results against the goals. If a goal is not
being met, the manager must also take
any necessary corrective actions to
continue to work towards that goal.
For example, if Melissa noticed that her
team was behind in their sales half way
through February, she will need to put in
place necessary provisions to ensure the
second half of February is twice as
productive as the first half so that by the
end the month, the original sales goal will
be met or exceeded.
Page 13

3.1
ROLE & FUNCTIONS OF MANAGEMENT
Below are questions to test your understanding of manager’s responsibilities for planning,
coordinating and controlling work

Scenarios Please choose the right answer

Tom is a project manager at an IT company and is

✔ determining how he should distribute resources and
allocate roles.
Tom is a manager at a large PR company and he is trying
Pick the answer choice that to determine which people he should hire to work on his
represents an example of company's new promotional line.
organizing: Tom is a director at a large IT company and he is trying
to determine how his employees have performed in the
past quarter.
Tom is a lawyer at a large PR company and is preparing
all of his co-workers for depositions that they will have
to face.
How is Tom’s role helping organisation to achieve it’s goal?

Because Daniel is micromanaging

Daniel manages a team that has missed their his employees.
production goals for the past three months. After Because somebody will likely get
reviewing each employee's performance record, fired as a result of this analysis.
Daniel adjusted the sales goal to take additional Because Daniel acted as a leader and
quality control measures into consideration. Why took responsibility for the project.
is this an example of controlling? Because Daniel looked at team results
✔ and took appropriate corrective action.

How did Daniel’s action contributed to the team and organisational objective?

Matthew manages a mobile phone retail store. He has set a specific sales Organizing
goal for his team to achieve by the end of the month. Matthew created a
Distributing
detailed action plan to help reach the sales goal. Which managerial
function has Matthew performed? ✔ Planning
Creating

How did Mathew’s action contributed to the store’s objective?

Mathew, being the Marketing Manager, exercises various functions management like
organising, controlling, planing in order to increase the sales, which is the store's objective.
Page 14
3.2
ROLE & FUNCTIONS OF MANAGEMENT
Role of Leaders & Managers in organisational success

Successful organizations need both inspirational leaders and sound managers. In order to achieve
increased and sustainable results, organizations need to execute strategies and engage employees.
Success is measured by analyzing where the organization is in regards to its goals and its mission.
Organizations need to think about the future of their business and think of better ways to be
successful. Organizations can either view their challenges as competition with others or as
opportunities to push them closer to reaching their full potential. What route they choose to take
determines if they are successful or not.

With this in mind, here are four steps leaders can use to ensure that their organizations are not
simply reacting to what challenges come their way but that they have a clear understanding of
what their organization needs to do to succeed:

Set clear goals Define plans that fit the organization

An organization's goals should be clear and in line
with the mission. The goals are used to measure at
certain intervals whether the organization is
moving in the right direction
An organization needs to develop a unique
plan and to remain in line with its own
mission and goals. Many organizations have
failed, not because of poor leaders or
managers, but because their plan did not
align with the mission or goals that they set.

Communicate and review work progress

Don't let external factors shift focus
often to keep everyone on track

External factors can, certainly, effect or even justify
changes to the goals from time to time. However,
external factors should have little or no effect on
the organization's objectives towards achieving its
core mission.
While this should be a given, the reality is
departmental and team silos are still the
norm in many organizations today. For an
organization to succeed, it's critical that
mangers break down these silos and make
it easier for employees to point out
potential problems or issues as well as
encourage those in senior level positions
to be more forthcoming about possible
changes being discussed and to address
new realities and conditions in the market.

Explain how managers ensure that team objectives are met?

Managers set clear goals for each departments or teams and make sure that the organization
is moving in the right direction. They outline the plan for each team, matching the mission and
goals of the company. It is the duty of the managers to offer training to the team members
and motivate them. Managers also take feedback from the team members to ensure that the
needs of the employees ar met because job satisfaction leads to achieving objectives.
Page 15
ROLE & FUNCTIONS OF MANAGEMENT

Below questions test your understanding on how leaders and managers role in meeting
objectives of the team and goal of the organisation.

Questions Pick the the most suitable answer

A capable leader provides Insight

which of the following to his
employees? Direction

Resources

✔ All of these answers are correct

To comply with state goal-setting regulations

They are used to measure, at certain intervals, whether

Why do organizations set ✔ the organization is moving in the right direction
goals?
To give the employees something to do

They can be used by the managers instead of a mission

statement.

Which of the following are the

Do not let external factors shift the focus
steps leaders can use to
ensure their organization's Define plans that fit the organization
success?

Set clear goals

All of these answers are correct

✔

Successful organizations need

both ________ leaders and ✔ Inspirational, sound
_______ managers.
Inspirational, tough

Tough, sound

capable, capable
Page 16
MANAGEMENT & LEADERSHIP THEORIES
Functions of management
Age-old debates surrounding leadership posits questions like, 'What characteristics make someone
a leader?' and 'Are leaders born or made?' There have been many theories concerning what makes a
leader a leader - the most widely known leadership theories are trait theory, behavior theory,
contingency theory, and transformational theory.
Given below is the example of Melissa, a Marketing Manager, exercising various functions of
management in order to increase the sales.
Trait Theories
Some theorists believe that there are certain traits,
or personal characteristics, that leaders have and
that others do not. These traits include:
• Charisma
• Intelligence
• Self-confidence
• Determination
• Integrity
• Energy
• Sociability
Trait theory is useful in identifying leadership
potential in people. Many organizations also use
this principle to help make hiring decisions;
however, this theory has been highly criticized for
its simplicity and exclusion of many other factors.
Contingency Theories
Contingency theories suggest that leaders behave
differently depending on the situation.
For example, a leader may use a team approach on
a day-to-day basis; however, during periods of
crisis, he or she may choose to become more
authoritative. The most effective leaders are those
who can be flexible and adapt to a wide variety of
situations.
Can you think of a time when you had to change
your leadership style to fit the situation?
Behavior Theories
Behavior theories focus on what leaders do,
as opposed to who they are. Leadership
behaviors can be divided into two
dimensions: task-oriented behaviors and
people-oriented behaviors.
Some leaders are more concerned with
getting the tasks at hand completed
successfully. Other leaders favor creating
solid interpersonal relationships with their
employees.
For example, if you have a high concern for
the task and achieving results coupled with
little concern for maintaining relationships
with people, you would be an
authority-obedience manager. Consider a
time when you were in a leadership position
- what was your leadership style?
Transformational Theories
Transformational theories are concerned
with how leaders motivate, stimulate, and
inspire others. Nearly synonymous with
transformational leadership is the
personality trait charisma. They use this
trait to inspire others, and they set high
moral standards and high expectations for
their followers. These leaders have a clear
vision, and they empower others to reach
their full potential. In essence,
transformational leaders are able to
transform followers into better people.
Some well-known transformational leaders
are Gandhi and Oprah Winfrey.
Page 17

3.4 3.5
MANAGEMENT & LEADERSHIP THEORIES
Below questions test your understanding on how leaders and managers role in meeting
objectives of the team and goal of the organisation.

Questions Pick the the most suitable answer

Adam is a CEO of a major healthcare organization.

He is typically calm, cool, and collected and likes to
take the time to evaluate all of his options before
making a decision. When Adam went to work on ✔ Contingency
Monday, he was faced with survivors being brought
in from three different traumas (a plane crash, a Trait
high-rise fire, and a multi-vehicle accident). He was
Behavior
forced to become more authoritative and to quickly
delegate tasks to some of his more senior staff, such Transformational
as setting up a mobile trauma unit in one of the
parking lots. This is an example of what leadership
theory?

Richard Branson, the founder of the Virgin Group, is

known for having the ability to help his followers to consistent
be able to look at old problems in new ways. He also transactional
pays attention to his followers' needs while inspiring
them to put forth additional effort in order to situational
achieve the goals of the group. Richard Branson is an
example of a _____ leader. ✔ transformational

Analyse the strengths and weaknesses of each theories identified above.

Trait theories provide benchmark of identifying true leaders who has different type of
qualities, ability to categorize, observe and measure the behavior of individuals. Trait theory
is useful in identifying leadership potential in people. The weakness is that the theory focuses
on leader centric approach and it is one of the traditional theories.

Contingency theory states the leaders behave differently based on the situation, but
behavioral theory suggests that leadership traits can be learned through development and
experience and promotes the value of leadership styles with an emphasis on concern for
people and collaboration; however, this theory concentrate on what leaders actually do rather
Assess
than on how
theirAdam’s skills is helping to make improvements to his organisation
qualities.

Adam has antheory

Contingency authoritative
emphasisleadership tratit thatofhelps
the importance him handle
a leader's the situation
style based quickly. Even
on the situations. It
his senior
does staffexplain
not fully respectwhy
hissome
wordspeople
as he is
arevery
morefexible and adapt
effective leaderstoin
a some
wide variety of but not
situations,
situations.
in others.

As per the Contingency

Transformational theory,
theories thestrong
suggest leaders behave differently
leadership traits withbased
strongon the situation,
self-belief, which is
activist
very much
mindset andappreciated
they alwaysinfind
an organisational
a better way ofsetting.
doing things. Most times, their potential can be
exploited.
Page 18

4.1 4.3 3.3

PERFORMANCE MANAGEMENT
What are Key Performance Indicators (KPIs)

Key Performance Indicators, or KPIs, are measurable values that a business track in order to
determine how successful it is at reaching its goals and objectives. These will vary based on a
business' goals, industry, or departments. KPIs should be SMART. That is they should be specific,
measurable, achievable, realistic, and timely.

Some common KPIs used by different departments include new revenue (sales), cost per
acquisition (marketing), average resolution time (customer service), and employee turnover
(human resources). Key Performance Indicators are important in a business environment for several
reasons. First, they help manage employee and business performance by identifying what's
working and what's not. Second, they help the focus stay on business objectives, either by fulfilling
them or modifying them. KPIs are also useful for improving the morale of employees, who can see
the measurable results of their work and take pride in it.

Reas the scenario and write the mission, goal and objective of the business. Also, set a
departmental objective and KPI for the sales department (Please refer to the example)

Scenario Mission Statement

Greg runs a restaurant in

Customer Expectations and the Restaurants
Croydon, South London. It
has become one of the
popular restaurant in town
and is well known for its
special soup. Goal
Greg’s plan is to improve To become the leading restaurant group in the UK
the customer focus and
increase the sales by 20%
this year.

His long term aim is to

achieve 15% of the market
share in the next 10 years.
His ultimate aim is to
become one of the leading
restaurant group in the UK.
Objective
Sales growth
Ensure customer satisfaction
Improve quality of service

Customer Service Department Sales Department

Provide excellent customer Increase sales each year

Deparmental
Objective service and achieve 100%
customer satisfaction

1. All customer complaints to be Increase sales by 20% by next year

resolved within 24 Hrs
KPIs Achieve 30% of the market share
2. All customers to be served
in less than 5 years
within 5 minutes of arrival
Page 19

4.2 4.6 3.6

PERFORMANCE MANAGEMENT
Difference between outcome and output

Outputs: An output is the physical result of your work. If you consider the KPI’s set in the Greg’s
scenario, if the customer waiting time do not exceed 5 min, more customers can be served. The
total number of customer served is an output.

Outcomes: Outcomes record the changes that occur as a result of your function. If you consider the
previous example, the changes to the department that may happen due to the reduced waiting
time may be “improved customer satisfaction”.

Explain the distinction between output and outcome?

(E.g. Staffing levels, Allocation and procurement of resources and materials, Inability to gain loans
or financial backing from investors, banks, etc)

Outcomes are the difference made due to the output.

Example: Due to excellent staffing, more customers were served, resulting in improved
customer satisfaction.

Explain the features of performance management system?

(E.g. information needs to be quantitative, measurable, easily understood by everyone using the
system, visible and appropriately used, measures outputs as well as inputs, encourages trust
between parties using the system, measures only key indicators, is easy for the collection and
utilisation of information and data)

A performance management system is a set of activities that one use in an organisation to

achieve the organisation's goals and objectives.

The main aim of performance management system is to identify, eliminate and improve the
problems related to the performance of employees in an organization. The company's goal
and objectives need to be clearly communicated with the employees and they should be
motivated.

Monitoring
Explain the performance
the possible operationalofconstraints
the employees is crucial,
imposed which
by budgets is another
in Greg’s aim? feature of
performance management system. Such a system helps develop trust between the
(E.g. Staffing levels, Allocation and procurement of resources and materials, Inability to gain loans
employees ad managers and leaders in an organization.
or financial backing from investors, banks, etc)
Greg needs to analyse the constraints like cost implications, staffing levels, availability of
resources, customer demands, skills and competence of the staff, financial opportunities
like loans or support.

So, Greg has to decrease the number of staff to save the budget and provide coaching to
the existing talented staffs by allocating jobs and responsibilities matching their skills and
abilities. As he is planing to increase the sales growth by about 20% and aims to get 15%
market share in the future, he has to find new investors or stakeholders or approach banks
for financial support. He can also invest money on advertising.
Page 20

4.4
PERFORMANCE MANAGEMENT
You've probably received a work evaluation at your job. Often, performance is evaluated by
measuring an employee's specific traits or general behaviors. Do you come to work on time? Do you
make errors? Do you complete your work efficiently? Do you satisfy your clients? You might even
work on a team and receive a group evaluation. Does the team handle work-related stress well?
Corporations utilize performance appraisals to evaluate how a person or team acts, and what skills
and knowledge they have, in order to give a broader view of the performance and productivity of
individual employees, teams, business units, or entire corporations. There are many performance
appraisal methods. The balanced scorecard method provides a big picture of the organization and
how each part fits into and influences the whole organization.

Balance Scorecard (BSC) Explain tools and processes

for monitoring and reporting
The balanced scorecard (BSC) provides a clear description of business performance?
the goals and objectives for each segment of an
organization, but takes it one step further by tying in Balance scorecard is a performance
individual goals with organizational goals. The BSC management tool that is used by
demonstrates how the objectives of an individual employee managers to monitor the daily work
have an influence on his role as a member of a team and how of the employees and measure their
that team then contributes to the success of a business unit progress towards set targets.
and how that business unit's productivity affects the overall
goals of the organization. It also helps to prioritize projects and
communicate and motivate the team
Focus Areas
members as to what they need to
The BSC is often divided into four process areas: accomplish for the success of a
• Financial goals: What are the financial responsibilities and business unit that affects the overall
goals of each individual, department, and/or organizational goals of the organisation.
group?
• Customer satisfaction: What can each segment of the
organization do to increase customer satisfaction?
• Departmental and organizational processes: How do we
save time, money, or effort, or increase satisfaction or Explain tools and processes
revenue, by changing our processes? for monitoring and reporting
• Training and Learning Goals: What do we need to train on business performance?
or learn as an individual, department, or organization in
order to improve in the other areas?
You can imagine how much easier it is to work toward your
goals when you know how your actions affect the overall
goals of the organization for which you work. Conversely, it is
also much easier for management to determine the success
of different units when they, too, can see how all the pieces
fit into place and what must be done in order to be more
successful and productive as an organization.
As with any performance appraisals, the results are only
effective if they're used to improve. If an appraisal
determines that improvement is needed, it should always be
followed by a re-evaluation. When used correctly, the
balanced scorecard method of results-focused performance
appraisals can have a great impact on the productivity of an
individual, a team, and an organization.
Page 21
MANAGEMENT INFORMATION SYSTEMS
Applications of Management Information Systems
Many organizations are structured based on functional areas. This is often reflected in an
organizational chart. Typically, functional areas include finances, human resources, marketing, etc.
Many of these functional areas have their own Management Information System, or MIS.
Financial MIS
A financial MIS provides financial information for
managers to make daily decisions on operations
within the organization. Most systems provide
these functions:
• Integrate financial information from multiple
sources
• Provide easy access to financial information in
summarized form
• Enable financial analysis using easy-to-use tools
• Compare historic and current financial activity
A financial MIS often has a number of subsystems,
depending on the type of organization. These
include systems to analyze revenues, costs and
profits, auditing systems for both internal and
external purposes and systems to manage funds.
A financial MIS can also be used to prepare reports
for third parties, such as external auditors or
shareholders.
Manufacturing MIS
Manufacturing is one of the areas where
information systems have made a major impact. A
typical manufacturing MIS is used to monitor the
flow of materials and products throughout the
organization. In a manufacturing process, raw
materials or parts are transformed to finished
products, and a manufacturing MIS is used at
every stage. Consider the example of building an
airplane. How many different parts do you think
there are in an airplane? Many of those parts come
from suppliers and have to be ordered. Others are
made at the manufacturing plant itself. Now think
of the process that is needed to get all those parts
at the right place at the right time. And, all those
parts have to be carefully inspected before they
can be used in building the plane.
Marketing MIS
A marketing MIS supports activities
throughout the many activities of marketing
departments. Some of the typical
subsystems of a marketing MIS are
marketing research, product development
and delivery, promotion and advertising,
product pricing and sales analysis.
One of the most common uses of a
marketing MIS is to produce sales reports.
These are typically produced on a regular
schedule, such as by week, month and
quarter. Reports can be organized by sales
representative, product, customer or
geographic area. Such reports allow
managers to see which aspects of sales are
doing well and which ones need attention.
Human Resources MIS
A human resources MIS is concerned with
managing all the information related to
employees of the organization, including
previous, current and potential employees.
It is also called a personnel MIS. This
information system supports the many
activities of a human resources
department, such as workforce planning,
selection and recruiting, training, task
assignments and administration of salaries
and benefits. Consider the example again
of building an airplane. How many
different specialists are involved in the
design phase, the actual assembly and the
testing of the plane? Making sure the right
people are available at the right times
requires careful workforce planning.
Page 22
4.2 4.5 MANAGEMENT INFORMATION SYSTEMS
Management Accounting

Management accounting is the use of accounting data to assist the management team with
information useful in the decision-making process. This makes decision making more of a scientific
process and less of a guess. Management accounting provides the executive team with the
information necessary to make rational financial and managerial decisions.

Explain the use of management accounts and management information systems in performance
management?
Management accounting provides the executive team with necessary information to make
financial and managerial decisions, whereas the management information system is an
organized process which provides past, present, and projected information on internal and
external operations to support decision making.

For example, a retail store can track the products that sell best through MIS, so that they
can place orders well ahead of time before supplies run out to meet the customer demands.
Page 23

PROFESSIONAL DISCUSSION

STUDENT NAME
ASSESSOR NAME

STUDENT SIGNATURE DATE

ASSESSOR SIGNATURE DATE

Page 24

ASSESSMENT

STUDENT NAME
ASSESSOR NAME
FEEDBACK & JUDGEMENT

STUDENT SIGNATURE DATE

ASSESSOR SIGNATURE DATE

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