Outline two features of an autocratic leadership style.

Apply Daniel Pink’s motivation theory to the programmers at Gen Y.

Explain one reason, other than increased sales revenue, why it is important that Gen Y generates new revenue streams.

Discuss whether Zack should sell Petra half of his shares with her conditions.

• Decision making in an organization is restricted to a very small group of select individuals.
• No consultation and discussion between management and employees. Employees are told about the decisions which are taken by an autocratic leadership.
• Communication tends to be downward and one-way only.

Award [1] for each correct feature identified.

Daniel Pink’s motivation theory identifies that there are three key drivers, or factors, that influence motivation for cognitive or thinking tasks leading to improved performance for a business. The three key drivers are:
• mastery
• autonomy
• purpose.

From the stimulus we can argue that, before Petra’s potential involvement, Gen Y allows for:
• Autonomy – Gen Y allows for employees to work on individual dream projects. They are also empowered to make their own decisions. The autonomy is evident in terms of time especially extra time given to work on dream projects, tasks, techniques to be used as well as trust, empowerment and delegation by the management.
• Mastery – there is evidence from the stimulus that Gen Y has used cognitive training. This would presumably build or enhance capacity to develop and refine the programmers’ skills. The programmers and the coders are encouraged to be intrapreneurs and to take risks. as stated above, Gen Y supports employees to eliminate fear and anxiety about failure and boosting motivation according to Pink and allowing them to be more creative. The ‘dream’ project time also adds to this.
• Purpose – the meaning of purpose in the stimulus is connecting to something larger than oneself that drives the highest motivation. The programmers and the coders develop the required sense of purpose that enhances motivation. Their ability to create high-quality reports providing innovative market research for other people. Work for its clients possibly creates purpose maximisation rather than just profit maximization. The employees can clearly see their contribution to the wider community, more than just themselves. This would act as a motivator for Gen Y programmers as they are carrying out ground-breaking work.

Mark as 2 + 2 + 2.

Award [1] for each relevant factor/drive explained and [1] for appropriate application to the organization to a maximum of [2].

[2] cannot be awarded for each factor/drive used if the response lacks either explanation and / or application.
For example:
For an identification or a description of a factor/drive with or without application [1].
For explanation of a factor/drive with no application [1].

For explanation of a factor/ drive and application [2].

Just mentioning the name of the business does not constitute application.

The question is about new revenue stream. Gen Y’s core business is the creation of innovative market research data reports. The business also allows employees to work on “dream projects” during the working week and provides cognitive training, which are all very expensive

To remain innovative and sustainable Gen Y will need to secure new finance through new revenue streams as the current single revenue stream is not profitable.
Gen Y should also find other sources of revenue generators, diversify into other markets or products to reduce the risk of relying on just one service/ product.

Accept any of the above as one valid reason.

Mark as 2
Award [1] for each relevant reason explained and [1] for appropriate application to Gen Y to a maximum of [2].

[2] cannot be awarded for each reason used if the response lacks either explanation and / or application.
For example: For an identification or a description of a reason with or without application [1].
For explanation of a reason with no application [1].
For explanation of a reason and application [2].

By selling his shares to Petra, Zack faces concerns not only of ownership but also that the culture of Gen Y – which by assumption has led to the success and motivation of employees – will have to be systematically changed. It is uncertain at this stage whether this change in culture will bring forward any improvements.

In common with many other start-ups, profit for Gen Y remains elusive despite the considerable sums invested. Zack has tried to finance dream projects to turn inventions into innovation but without success. The harsh reality is that without funding coming into the business, the long-term sustainability of Gen Y is in doubt. If he does not take some action now and invite Petra into the business, then all jobs and intellectual property at Gen Y are under threat. Some programmers may leave the company if they sense that for some reason the opportunity to work on dream projects is cut back. Taking on Petra as a partner will-weaken Zack’s control. Both will have equal power in decision making. However, it will ensure in the short term that Gen Y remains viable. Gen Y is in urgent need of finance so perhaps Zack does not have much of a choice.
The importance of the venture capitalists’ view is also valid as with the sale they would now have the swing votes on important decisions. Does their exit strategy look better with Petra or Zack?

However, to receive this funding, Petra has added conditions that Zack must accept. These conditions will not be popular in an organization that has strong links to Daniel Pink’s motivational theory. A leadership style change to autocratic will impact on the autonomy currently enjoyed by the employees. The purpose may also be affected, as Petra will wish to have a strong influence in the type of vision or direction she wishes to see Gen Y move to. The ending of innovative and revolutionary dream projects may be the first casualty. Motivation could be destroyed. Given the culture and the level of motivation one may judge this issue as extremely significant. The stimulus states ‘To retain the best programmers...’. Those departing may turn into competitors.

Further, the insistence on specific targets for programmers may impose deadlines/restrictions, which may be too much for the employees to take as they have been empowered to make their own decisions. A change of culture which will impact on creativity, innovation and motivation may have dire consequences in the medium to long term. Autocratic leadership styles and setting targets are opposing factors according to Pink compared to being motivated. Gen Y relies on its employees’ creativity, innovation and motivation for success.

Accept any other argument for and against.

Overall, the short-term situation is difficult for Zack. He has to balance the financial issues present in the case study with the idealism and motivation of his workforce. Petra’s conditions, whilst restrictive, may save Gen Y. Zack may be forced to sell this idea of Petra receiving half his shares to his employees. Some employees may quit and be hired by competitors but perhaps they may not have been committed to Gen Y and Zack’s purpose. Either way, Zack will find it difficult to turn down Petra’s offer.

Candidates might offer different solutions like not accepting Petra’s offer and look for venture capitalists with different views on what motivates employees. Or simply ask the existing VC’s to increase their stake in return for a more gradual focus on strategies emphasising the bottom-line.

It is expected that candidates provide a conclusion with a substantiated judgment.

Candidates can provide any conclusion and judgment as long as it is substantiated.

Accept any substantiated judgment.

Marks should be allocated according to the Paper 2 markbands for May 2016 forward.

Examiners’ judgment should be based not just on the number of the arguments in terms of balance but on the quality/ clarity /relevance of the argument.

For one relevant issue that is one-sided, award up to [3]. For more than one relevant issue that is one-sided, award up to a maximum of [4].

A balanced response is one that provides at least one argument for and one argument against each the option.

Award a maximum of [6] if the answer is of a standard that shows balanced analysis and understanding throughout the response with reference to the stimulus material but there is no judgment/conclusion.

Candidates cannot reach the [7–8] markband if they give judgment/conclusions that are not based on analysis/explanation already given in their answer.

This question was well answered. However, some candidates discussed the organisational structure associated with a particular style of leadership. As in previous questions students should be encouraged not to look at these structures in absolute terms. A flat or decentralised structure may well give the opportunity for more democratic leadership but it is not always the case. Many other factors come into play, such as, the type of industry, size of the company, prevailing internal culture etc.

The main area of difficulty for candidates lay in applying the Purpose element of Pink’s theory. Purpose in any job role is suggestive of something bigger than self and the immediate surroundings, namely something external. In this question’s context therefore, some reference to the clients (external) and what the programmers were achieving for them, was necessary for the full marks.

The main reason was diversification of risk. Application was expected to identify that Gen Y had only one revenue stream or that this was unprofitable, hence the need to find more profitable streams. Some credit was given to the fact that additional revenue might protect the jobs of those currently employed as it helped to offset fixed overheads.

Unlike the previous Section B questions, this question did not have 2 options to compare but needed to weigh up the advantages and disadvantages of a single decision. With a decision to sell came several preconditions set by Petra. Whilst many candidates discussed the advantages and disadvantages in a generic manner very few explicitly addressed the conditions that Petra was setting. Obviously, these conditions only had relevance in the event that Dan sells his shares so it might be expected that this side of the argument be perhaps longer than the other. Candidates were not expected to discuss the reasons behind Petra wanting to invest, however it was a reasonable assumption that Petra would wish for a financial return on her investment and therefore the question of profitability needed to be addressed. As in previous questions, substantiated judgments were lacking and therefore candidates rarely achieved level 4 or 5 of the markband for this question.