2.1 Factors Effecting The Operation Of Business- Understanding Buiness

Question 1

Corporate culture

Answer 1

It is the beliefs and behaviours which mangers and employees adopt to enable the business to achieve its aims. Usually it is not specifically defined but develops organically over time and become the unwritten rules and values of the business.

Question 2

Advantages of corporate culture

Answer 2

Employees experience a sense of belonging to the organisation which improves their motivation and morale.
Employees will be more loyal to the business .
Employee relationship should be stronger and positive which should lead to smoother working.

Question 3

Disadvantages of corporate culture

Answer 3

Time and effort required to maintain the citrus and for new staff to adapt.
It may stifle creative thinking.

Question 4

Strategic decisions

Answer 4

They set out the aims and objectives of an organisation.

The decisions are made by senior managers as they possess knowledge of the organisation.

Question 5

Tactical decisions

Answer 5

The tend to affect the medium term position of an organisation.
Tactical decisions set out how objectives laid out in strategic decisions are to be achieved.
Tactical decisions are usually made by middle managers.

Question 6

Operational decisions

Answer 6

Are short term day-to-day decisions. They allow daily operations to run smoothly.
They are often made in response to changing circumstances.
They are made by managers at any level, but are more likely to occur at junior management level.

Question 7

‘SWOT’ analysis

Answer 7

Strengths and Weaknesses of its internal factors and Opportunities and Threats presented by external factors (PESTEC).

Question 8

Internal factors- Strengths and Weaknesses (SWot)

Answer 8

Strengths and weaknesses reflect the current position of an organisation. They are internal, so the organisation has a more direct control over them. An organisation should try an capitalise on and develop strengths, and try an minimise or eliminate weaknesses.

Question 9

Examples of internal factors (Strengths and weaknesses)

Answer 9

Marketing management, operations management, financial management, Human Resources management, managerial strengths and internal structures.

Question 10

External influences- Opportunities (swOt)

Answer 10

An organisation has no direct control over external factors but should seek to exploit business opportunities e.g. to break into new markets , or take steps to overcome threats.

Question 11

Examples of external influences- Opportunities

Answer 11

Changes in law, booming economy, socio-cultural trends creates demand for certain products, progress in technology, environmental factors, weak or failing competition can create a new customer base.

Question 12

External influences- Threats (swoT)

Answer 12

They come from a less favourable external environment.

Question 13

Examples of external influences- Threats

Answer 13

Change in law (minimum wage), unemployment in an economic recession can reduce consumer spending power, changing lifestyles may force employers to offer more attractive working conditions, expensive technological progress, pressure groups may force businesses to amend their product range, competitors may result in an organisation losing its market share.

Question 14

Factors affecting the quality of decisions

Answer 14

Quality and quantity of information used, training and experience of the decision maker, degree of acceptable risk, personal attributes of the decision maker.