Allama Iqbal Open University, Islamabad.

Academic Year 2022 -2024

(Semester: Spring, 2022)

Department: (Department of Business Administration)

Assignment # 01

(Unit 1-5)

Full Name: Sadia Bashir

Roll No: 0000261963

Programme: M.COM

Subject: Management Theory and Practice- 8506

Date of Submission: 14-08-2022

Submitted to: Fariha Saleem

Q .1 Explain Mintzberg’s managerial roles in details.
Answer:
Henry Mintzberg, a Canadian management expert and author, came up with the idea of
interweaving practical experience with business theory. In his 1990 book Mintzberg on
Management: Inside our Strange World of Organizations, he listed Cleary-defined roles for
managers to become effective team leaders.
The Mintzberg managerial roles are categorized under three sections interpersonal,
informational, and decisional. These three categories comprise 10 roles of a manager. To be a
good leader, you have to manage your teams by leveraging strengths, resolving conflicts, and
prioritizing tasks. Harappa Education’s Managing Teamwork course helps you navigate your
way around your workplace with proficiency.

Frameworks such as the Social Styles model and the 3Ps template teach you how to
accommodate different work styles and overcome challenges not as individuals, but as a team.
Let’s delve into the Henry Mintzberg managerial roles for professional success.

Mintzberg managerial roles comprise a variety of responsibilities that are attributed to a manager
across divisions. Some of these responsibilities are communication, time management, conflict
resolution, and decision-making. Mintzberg studies different types of organizations (a consulting
firm, a school, a teach firm, a consumer goods manufacturer, and a hospital) and identified 10
roles of a manager. He divided them into three categories:

 Interpersonal roles relating to a manager’s authority in an organization

 Informational roles involving communicating important information and data
 Decisional roles concerning decision-making, negotiations, and implementation


Mintzberg’s 10 managerial roles

Interpersonal roles:
 Figurehead
As the Figurehead, a manger is responsible for official and social duties that reflect their status
and authority in the organization. It’s about building strong relationship with peers and
subordinates. You can become a good role model by being empathetic and compassionate.

 Leader
The Leader inspires, encourages, and builds morale. Managers build lasting relationships with
team members by monitoring their performance and coaching them when needed. Emotional
intelligence can help you develop a trust-based relationship with your team.

 Liaison
A manager has to exchange informatiaon with various departments and teams as well as with
external stakeholders. Liaising with other organizations, competitors, and government
representatives equally important for professional development.

Informational roles:
 Monito
The Monitor is responsible for gathering Intel for sustained competitive advantage. To do that, a
manager has to assess the market for changes and collect relevant data that could impact the
organization. These are stages in the process of strategic management that helps an organization
to survive the competition.

 Disseminator
The Disseminator communicates useful and relevant information to team members and
Subordinates. It's important to invite feedback, Ideas, and views from each employee to keep an
open channel of communication.

 Spokesperson
Convey important information about the organization to external stakeholders. This could be for
PR purposes, addressing government policies, or dealing with suppliers. You must have a clear
idea of your company's brand image to become a successful spokesperson.

Decisional roles:
 Entrepreneur
Be prepared to take initiative as part of your managerial duties. Initiate projects and address
concerns with effective problem-solving skills. Icebreakers and team-building activities will help
you connect with your team.

 Disturbance handler
The Disturbance Handler ensures that everything runs smoothly. Key responsibilities include
resolving conflicts with mentoring sessions, identifying areas for improvement, and addressing
gaps in teamwork.
  Resource allocator
The Resource Allocator is concerned with fund allocation, cutting costs, and distributing
resources across the organization. You have to apportion available resources such as funding,
human resources and materials where needed.

 Negotiator
A successful negotiation leads to a win-win outcome. A manager has to participate in
negotiations with team members and other stakeholders to reach a favorable outcome for both
parties. This role distinguishes you from other managers because you have to consider your team
s best interests.

Henry Mintzberg managerial roles are useful to assess your strengths and weaknesses as a
manager. You can improve your managerial duties with practice and experience.
Strengthen your managerial responsibilities:
Once you have identified your roles and responsibilities, it's time to put those management skills
to use. There are several steps you can take to become a good and effective manager while
making room for career advancement:

 Decision-making
Sound decision-making skills are essential, especially for managers and team leaders. From
leading critical meetings to overseeing team responsibilities, being an effective manager means
analyzing complex business problems and implementing a sound plan moving forward.

 Self-awareness
Healthy self-awareness is what makes you a high-performing individual. It’s because you use
emotional intelligence and empathy to navigate your workplace relationships. By assessing
yourself you can gain insight into your strengths and weaknesses and use them to reflect on your
interactions with your teams. It even helps you enhance professional development.

 Build trust
The core tenet of successful teams is establishing trust and credibility. If you want your
employees to be on the same page and function together with minimal conflicts, you need to be
able to build trust-rich relationships. The more individuals trust each other, the easier it is to
promote teamwork and collaboration.

Q.2 Describe maximax , maximin and minimax decision making approaches.

Answer:
Below are some of the most common approaches used by decision-makers (particularly
managers):

 Expected Value Method

 Maxi Max Method
 Maxi- Min Method
 Mini-Max Method

 Expected Value
If there are two possible results, each may have an identifiable probability of occurrence.
Likewise, each potential outcome may have an expected value.

So, a manager can multiply the probability (let’s say 80% or 80) by the value of the potential
outcome (let’s say S2M).
The value of this choice is $1.6M ($2M x 80). If the other potential outcome is a 20%
Likelihood, but the value of this possible outcome is $10M, the expected value is $2M.

In summary, an expected value calculation is a valuable approach employed when the level of
certainty of multiple options can be estimated. Generally, the manager will make the decision
that produces the highest expected value.

 Maximax Decision
Maxımax is an approach to a potential decision that attempts to maximize the potential return. If
there is more than one potential outcome to a decision and the probability of each Occurrence is
not predictable or irrelevant to the decision-maker, this approach will simply look at the stated
value of the outcome.

A maximax approach would take the decision based upon the biggest potential outcome. This
choice is generally employed by optimists who go for the highest payout with concern for the
probability of occurrence. For example, someone playing the lottery when the payout is at a
record high is focusing on the potential reward rather than the probability of winning it.

 Maximin Decision
The maximin approach is when the managers, presented with one of several courses of action,
looks at the worst possible result for each course of action. This assumes that there are multiple
potential results for each potential choice. The manager chooses the highest payout out of the
worst potential outcomes for each choice. This is effectively choosing the best of the worst-case
scenario.
This is a common course of action for a pessimist- as she assumes the worst outcome will be
realized. An example would be a hypothetical investor who is choosing between two or more
courses of action. Venture capital investment may have a huge payout or total loss. Stocks may
have a good result or equivalent losses. Treasure Bonds will have a low return but will also not
lose much money.
The maximin approach would choose the bonds, as this is the highest value for the worst
possible outcome (an economy where venture capital and stocks perform poorly).

 Minimax Decision
The Minimax approach seeks to minimize the regret they feel for a course of action. To do this,
the manager will look at the potential result for multiple courses of action. For example:
 Choice A: 10, 15, 50, 65
 Choice B: 20, 20, 40, 60
 Choice C: 15, 35, 25 50
This set shows an equal probability for each column. That is, the probability of A: 10, B: 20, and
C: 15 is equal. She will then identity the best outcome in each course of action. In this sequence,
it is A: 40, B: 65, C: 60. Then, she will deduct the best result for each probability from the other
probabilities in that Column. Thus, there will be a zero and the rest negatives in each column.
Here is the payout table: Choice A: -10, -20, 0, 0 Choice B: 0, 15, -10, -5 Choice C: -5, 0, -25, -
15

Now, the manager will want to choose the best option that minimizes her regret. Regret is what
she could have received if she made a different choice. The manager will 1dentify the largest
loss under each choice (A: -20, B: -15, C: -25). You then make the choice with the smallest loss
of these available choices Choice B will minimize the potential regret that you have. 1

Q.3 Explain why strategic flexibility is important. Also describe e-business strategies.
Answer:
Strategic flexibility is the capability of an organization to respond to major changes that take
place in its external environment by committing the resources necessary to respond to those
changes. More importantly, the organization should be able to identify change markers so that it
can go back to its previous state when the external environmental change is reversed. Strategic
flexibility can be a major asset to a firm because of its ability to react to changes effectively.
Strategic flexibility can be used by organizations as both an offense and defense mechanism,
depending on the nature of change and its impact on the organization.

For example: When a new player enters the market with a new product, it is a major change in
the external environment of an existing organization. If the existing organization takes steps after
a new player has entered the market, such as investing more in research and development (R&D)
and or sales, then it is a defense mechanism to protect its assets. On the other hand, if the
organization takes these steps as a preventive measure before a potential new player has entered
the market, then it is an offense mechanism.

Depending on the external change, there are four major aspects that need to be taken into account
while formulating strategic flexibility:

 The amount of time available to respond to a major change;

 The range of different solutions available;
 The perspective of the organization with respect to the change; and
 The focus area of the flexibility that was created.
Managers have to take into account these four aspects while formulating a strategy; however,
this process is not easy because there are still many uncertainties within the internal as well as

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decision-making
external environments. Psychological and organizational biases further compound potential
issues and make it that much more difficult for managers to identify changes and take
appropriate actions within a quick time frame. The onus is on the managers to identify changes
and take appropriate resources to handle them; therefore, having a competent management team
ensures the right decisions are being made as much as possible and resources are not being spent
on unworthy projects that could be detrimental to the organization. The ability to demonstrate
strategic flexibility can increase the value of an organization as the business is able to more
quickly adapt to change and therefore better manage risk. 2

Strategic flexibility can be source of competitive advantage for companies. That allows
Competitors not to go beyond the company when the environment changes. That way, the
company will remain competitive.

The external environment is beyond the control of the company. Thus, companies cannot Change
it and direct changes as they wish. They can only adapt.

Changes in tastes and preferences are one aspect of change in the business environment. And in
general, business environment factors consist of:

 Politics such as changes in policy direction, political unrest, and coups.

 Economics such as economic growth, interest rates, inflation, and exchange rate.
 Social demographics, for example, population growth, age distribution, and health
awareness.
 Technology, for instance, the internet.
 Environmental, for example, natural disasters and climate change.
 Legal changes such as tax regulations, trade restrictions and capital controls. Competitive
environment such as rivalry between existing companies and the threat of new entrants,
bargaining power of suppliers, bargaining power of buyers, and the risk of substitution)
Changes to those factors can have an impact on the company s strategic competitiveness.
Thus, companies need to make flexibility as part of the company's competitive strategy.
Learning gives companies new and most current set of skills. It allows them to adapt to
changing business environments. Organizational learning capacity depends on the
company’s human resources. Having a competent and enthusiastic management team is
necessary. That makes it possible to identify changes and assign appropriate resources to
handle them.
 So, the key to successful strategic flexibility depends on the company s ability to:
 Scan the environment and identity changes in the external environment. They may be
opportunities or threats
 Determine the magnitude of the effect of these changes on the company
 Rank the resources needed to adapt
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  Make significant strategic change. To do this, requires strong leadership and operational
flexibility. 3

Q.4 Describe each of the five forms of departmentalization.

Answer:
Departmentalization is defined as process group’s activities into different departments. These
departments are created that tasks can be performed by specialization within the
organization. You will find it in both private and public organizations. Departmentalize also
refers to an organization’s formal structure that includes several departments and positions
and their respective relationship with each other. To achieve he common goal of an
organization, the company combines teams under different departments. These have several
employees who carry out a similar type of activities for the betterment of their company. It
groups individuals as per the functions and activities they will be performing in a single
department. If you see a corporate ladder, you will find that all the levels that come under the
top and all the subsequent ones have been departmentalized.

The departments are headed by senior executives who are also known as managers in some
cases of their department. They are responsible for delegating duties and tasks to the
employees in their department.

The employees of every department are accountable to their department head for their
performance.

Types of Departmentalization:
 Functional departmentalization
In this kind of departmentalization, the company creates departments based on the functions;
they perform for the company. For example, you will head together all the specialists related
to finance under a finance department and with marketing under that department and not
vice-versa.
Functional departmentalization is beneficial for the company as it integrates expertise and
maximizes efficiency and productivity. As all related activities are conducted by a group of like-
minded and shared knowledge and skilled people in one place, you can expect specialized
activities and great results.

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Some of the common and popular functional departments are Logistics, finance, manufacturing,
accounting, marketing, IT, and human resource. All important positions are filled with experts
that facilitate better integration and coordination.

 Geographic departmentalize

When a company organizes departments along geographic lines, it is called geographic

departmentalization. Multinational firms have their offices all around the world, and they have
created departments based on the regions to handle company activities.

The geographical departmentalization ensures that a cultural, social, and political need of the
region is met. When managers are sent from one location to another, they also gain expert
training to handle different scenarios.

This type of departmentalization allows the company to benefit from the low cost
of operations as they can easily capitalize on the local conditions as per their requirements.

 Product departmentalize

This type of departmentalization is perfect for a large-scale company that deals with multi-
products. It groups all the activities related to the delivery and development of products in a
specific department.
Product departmentalization becomes vital when manufacturing, marketing, and handling of each
product hold due significance for the company. It gives full onus to every product and ensures
specialized production facilities.

 Process departmentalize

When a company groups activities by the production processes, it is known as Process

Departmentalization. The departments will need adequate material and manpower to conduct
their operations and tasks smoothly.

 Customer departmentalization

When a company puts its focus on customer needs and wants, it creates departments in
accordance with different class or type of clients and customers. This is known as customer
departmentalization.

It pays attention to customer satisfaction to enhance the sales figure and brand image of a
company.
Advantages of using it:

The numerous advantages of departmentalization are as follows-

1. Departmentalization is an effective grouping that enables meaningful work.

2. It is easy to coordinate different work in the same department.
3. Departmentalization results in the integration of work.
4. Achieves economic advantage.
5. Departmentalization enables utilization of local conditions via low operational costs.
6. Simplifies training.
7. Utilizes special skills and specialized training to increase personal as well as company
productivity.
8. Departmentalization helps the company to gain the benefit of specialization.
9. There is a feeling of autonomy as the manager is granted the power to take independent
decisions.
10. It increases the chance of growth and expansion.
11. Departments are created to fix the role of every person involved. Responsibilities are clear
and .precise, and every person is now accountable for his/her action.
12. All departments are specific, and workers within it have a greater chance of uplifting and
further learning of the skills. It actually acts as on-the-job training. If the manager comes
across someone in his group who he thinks to need specialized training, he can easily
arrange for it.
13. It becomes easy to evaluate managerial performance as tasks are allotted department wise.
14. Departmentalization results in better administrative control.

Disadvantages of departmentalization:

The disadvantages of departmentalization are as follows:

1. As departments continue to grow it creates less adaptability within the organization.

2. When a company groups activities and people in one specific department there is little
room for flexibility.
3. Difficulty in coordination between different departments.
4. Less responsibility and accountability as the departments are concerned with their own
space and not the company as a whole.
5. Too much emphasis on specialization.
 6. Rising conflicts between different departments.4

Q. 5 Describe charismatic and visionary leadership.

ANSWER:

 Charismatic management:

Charismatic management or leadership is a form of professional guidance or management built

on a foundation of strong communication skills, persuasiveness, and maybe even a little bit of
charm to help them get the most out of everyone that works for them. They tend to be passionate,
have charisma (hence the charismatic title), and have strong convictions with a deep connection
to the work that they’re doing—which, in turn, inspires the same conviction in others. Because of
a charismatic leader’s intense commitment to their work, they tend to evoke strong emotions
from their followers and teams. This encourages devotion, action, and strong problem-solving
skills.

Charismatic management and leadership style is similar to transformational leadership. In

transformational leadership, managers are known for using inspirational motivation and
intellectual stimulation to empower their followers in doing their best work. But where the two
approaches differ is in how charismatic leaders focus on working within the status quo to make it
better, as opposed to creating an entirely new path.
Some of the skills, traits, and actions that may define a good leader that utilizes charisma would
include:

 Forward-thinking goal setting: Because these great leaders are able to see the bigger picture,
charismatic leaders excel at setting project milestones well into the future to help keep teams
motivated and encourage continued advancements.
 Articulation: Being well spoken, a strong communicator, and capable of detailing company plans
in an engaging way ensures followers are on board at every level of production. This trait is key
for charismatic leaders.
 Ability to tap into people’s emotions: Encouragement and inspiration are one thing, but the trait
of emotionally connecting followers to a cause with your charisma can create a stronger sense of
devotion to the work.
 Openness to taking risks: As much as leaders with charisma work within the status quo, they’re
still willing to explore unique opportunities or approaches that could result in big gains.
 Clear vision: Knowing the desired outcome of a project, and the pathway to getting there, gives
followers a stronger sense of support as they work.
 Utilization of unconventional behavior: Maybe they employ off-the-wall team-building
exercises, maybe they encourage a hybrid office/remote approach to work, or maybe they try
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 every bananas idea an employee comes up with. Leaders with charisma aren’t afraid to try
everything to get results.
 Grace under pressure: Leaders with charisma can often find themselves in high-pressure
situations that can challenge them to keep everyone committed and motivated, even in the face of
seemingly insurmountable odds.
 Sensitivity to their environment and the needs of the team: Empathy is another important quality
that can help charismatic leaders navigate sensitive situations and intensive production
schedules.
 Strong engagement skills: From upper management to lower-tier employees, charismatic leaders
know how to connect with everyone at every level of the professional totem pole.5

 Visionary leadership:

Visionary leaders are usually brought in during a unique time in an

organization. Transformational leaders may be invited to an organization to encourage
employee motivation and create leaders.

CHARACTERISTAICS OF VISIONARY LEADERSHIP:

1. Favorable Toward Innovation

Visionary leaders are focused on moving past the status quo and ushering in new projects,
acquisitions, or initiatives. As a result, visionary leaders need to be comfortable with failure
and volatile effects due to changes.
2. Resilience
Leaders who were brought in to guide companies through tumultuous times have to have
tenacity and determination. They could likely be dealing with situations where they have to
fight against old ideas, company politics, and external pressures.
3. Strategic Thinker
Visions have to be planned for and thought about strategically. Good visionary leaders will
prepare for what they want the organization to look like and create strategies for how they
can move towards it. Again, they might not have all the technical details, but they can see
and plan for the big picture.
4. Intelligent Risk Takers
Moving toward a new goal or addressing a vision is a risk. There is no guarantee that
strategies will work, but visionaries are comfortable with the uncertainty and take as many
measures possible to ensure the plan is successful.

5. Skilled Communicators

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Effective visionary leaders have the ability to cause others to see where they are going and
agree to the move toward the new vision. They will likely use their charisma to cause others
to understand the larger picture.
6. Expert Organizers
Unlike transformational and charismatic leaders, there is an emphasis on visionary leaders
creating the team around them. They will be a part of the process to put together
departments, functions, and operations that help them reach the new vision.
7. Intensely Focused and Enthusiastic
In the pursuit to improve performance and spur change, visionary leaders are intensely
focused. Their eyes are set toward the goal, and they will do all in their power to create a
pathway to accomplishing it. Visionary leaders have the self-control and self-discipline to
effect position change and inspire those who report to them. It is hard to follow a leader that
does not exhibit the traits they want to see in others, and good visionary leaders understand
this. One of the most important characteristics a visionary leader can display is enthusiasm
for the vision. Their passion and zeal should reach others and inspire them to feel the same. 6

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leadership/#:~:text=Visionary%20leaders%20are%20usually%20brought,employee%20motivation%20an
d%20create%20leaders.
Bibliography
1
https://thebusinessprofessor.com/en_US/management-leadership-organizational-behavior/methods-of-
decision-making
2
https://www.divestopedia.com/definition/4906/strategic-flexibility
3
https://penpoin.com/strategic-flexibility/
4
https://www.marketing91.com/departmentalization/
5
https://www.wgu.edu/blog/charismatic-leadership2103.html#close
6
https://status.net/articles/visionary-
leadership/#:~:text=Visionary%20leaders%20are%20usually%20brought,employee%20motivation%20and%20crea
te%20leaders