Page 104 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 2 People in business

■ The time available to make a decision – if a decision needs to be taken quickly,
then there will be no time to discuss the situation with workers. This will require
an autocratic approach to management. However, if there is time to consult and
for workers to participate in the decision-making process, then a more democratic
management style may be used.
■ The personality of the manager – some managers are naturally autocratic or
naturally democratic. It can be very difficult to use a management style which is

opposite to their own personal style.
■ The task to be completed – you have already seen how workers whose tasks
require them to be innovative and creative may be more motivated with a laissez-
faire leadership style. The nature of the task, for example complex, simple or

creative, may require different leadership styles.
Managers should try to use a management style that takes these factors into
account. Perhaps the best approach is for managers to realise that they may have to
use different styles in different circumstances. For example a manager may usually

use a democratic style of management, but if a crisis situation happens, which
places the business at some risk, then a more autocratic style may be needed.

CASE STUDY Leadership styles in the oil and gas industry

The production of oil and gas is an important industry in the

primary sector of several countries throughout the world. Th e industry,
which can be a dangerous one to work in, employs people in many diff erent
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types of jobs. Managers must use the most appropriate management
styles to ensure worker safety and the best solutions to problems.
A key role in the industry is the Installations Manager. Th is manager
is responsible for the safety and well-being of everyone working within
the installation. Employees must comply with instructions at all times
due to the nature of the work. Rules and procedures must be followed to
ensure safety.
However, the Installations Manager may also have to take
complex decisions about shutting down a piece of equipment

and the effect this may have on other areas of production. Such

decisions may require a different approach. The Installations Manager

may not have all the knowledge or skills needed to take such a
decision alone. An Installations Manager in the
oil and gas industry

TASK
a The production of oil and gas is in the primary sector. State the other two sectors.
b What is meant by a ‘manager’?
c What is the most appropriate leadership style for an Installations Manager? Justify your answer.

TEST YOURSELF

1 Outline the main difference between an autocratic leadership style and a democratic
leadership style.
2 Identify one circumstance when a laissez-faire leadership style might be
appropriate.