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Business Theme 3 and 4 > 3.4 > Flashcards

3.4 Flashcards

1
Q

Define Short-termism

A

Where a business prioritises short-term rather than long-term performance

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2
Q

What performance measures does short-termism emphasise?

A

-Maximise short term profits
-Minimise R&D investment
-Maximise returns to shareholders
-Pursue external growth
-Invest less in HR

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3
Q

Problems faced bt short-termism businesses?

A

-Loss of profitability & competitive edge as lucrative long term opportunities ignored
-Need to produce regular financial reports so managers lack time to consider long term strategic decisions
-Higher than necessary costs due to reliance on short term contracts

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4
Q

What are some key features of long-termism businesses?

A

-Long term investment on R&D
-Investment into workforce eg recruitment, training & staff retention
-Establishing lasting relationships with suppliers

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5
Q

Define subjective decision making

A

Based on intuition and gut feeling, quick but hard to justify

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6
Q

Define evidence based decision making

A

Making decisions based on analysis & evaluation of evidence and adopting a systematic approach

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7
Q

Define Corporate culture

A

The values, attitudes, beliefs, meaning and norms shared by people within an organisation

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8
Q

What are Handy’s four classes of culture?

A

-Power
-Role
-Task
-Person

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9
Q

Features of a Power culture?

A

-Concentrates power among a few at top of hirachy where decisions are made
-Few rules and little bureaucracy
-Swift decisons are posible

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10
Q

Features of Role culture

A

-Power derives from a persons job title
-Clear hierachal structure
-Employees adhere to rules & understand roles
-May find it difficult to adapt to changing market conditions

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11
Q

Features of Task culture

A

-Decisions made by teams made up of employee with specific skills
-Power lies with those with task related skills
-Teams created & dissolved as projects completed
-Emphasis on adaptability & team work

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12
Q

Features of Person culture

A

-Individuals have significant levels of power to determine their own decision making
-Common in firms of professionals

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13
Q

What leadership style is power culture?

A

Autocratic

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14
Q

What leadership style is Role Culture?

A

Autocratic or Paternalistic

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15
Q

What leadership style in Task culture?

A

Paternalistic / democratic

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16
Q

What leadership style in Person culture?

A

Democratic

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17
Q

Why do businesses change culture?

A

-Improve business performance
-Respond to significant change

18
Q

Signs that culture may need changing?

A

-Internal fighting
-High levels of staff turnover
-Greater absenteeism
-Innovation no longer valued
-Declining customer service

19
Q

Features of a weak culture?

A

-Little alignment with business values
-Inconsistent behaviour
-A need for extensive bureaucracy & procedures

19
Q

Define Stakeholder

A

Any individual or organisation who has a vested interest in the activities and decision making of a business

19
Q

Define Shareholder

A

Owns the business, may also work in the business. Interested in growing the value of their shareholding.

19
Q

Define Internal stakeholder

A

Individuals inside the business eg employees, mangers and owners

19
Q

What are Shareholders/Owners interest in?

A

-Return on investment
-Success and growth of business
-Provide an income

19
Q

What are Employees interested in?

A

-Rewards
-Job security & working conditions
-Promotion opportunities

19
Q

What are Customers interested in?

A

-Value of money
-Product quality & customer service

19
Q

What are Suppliers interested in?

A

-Businesses to pay what it owes promptly
-Establish long term contracts

20
Q

What is the Government invested in?

A

-Creation of jobs
-Correct collection and payment of taxes
-Compliance with business legislation

21
Q

What is Stakeholder conflict?

A

A situation in which the interests or goals of different stakeholders in an organisation are in conflict with one another.

22
Q

Define Ethics

A

Moral guidelines which govern acceptable behaviour

23
Q

What is the ethical code of practice?

A

-Informs decision making and sets out how businesses behave responsibly regarding the environment, animals and adopt fair working practises.

24
Q

Advantages of behaving ethically?

A

-Higher revenues
-Improved brand awareness & recognition
-Better employee motivation
-New sources of finance eg ethical investors

25
Q

Disadvantages of behaving ethically

A

-Higher costs
-Danger of building fake expectations
-All elements of supply chain must comply

26
Q

What do salaries, wages & financial rewards play an important role in?

A

-Rewarding and motivating existing staff
-Attracting new employees
-Maximising productivity levels

27
Q

What is Corporate social responsibility?

A

Conducting business activities in an ethical way & balancing the interest of shareholders with those of wider community.

28
Q

How does supply chain effect business ethics?

A

A business can’t claim to be ethical if it ignores unethical practices by its suppliers eg use of child labour

29
Q

Features of a strong culture

A

Values, attitudes easily recognised and embedded in the way the business operates

30
Q

Define External stakholder

A

Outside the business eg customers, suppliers, Gov, community

31
Q

What is the stakeholder apporach?

A

-Business recognises impacts it has on stakeholders
-Communicates effectively with stakeholders
-Tries to minimise negative impacts on stakeholders

32
Q

What is the shareholder approach?

A

-Focuses on meeting needs of shareholders
-Maximising profits to increase dividends and improve share price

33
Q

Examples of socially responsible activities?

A

-Sustainable sourcing of raw materials
-Responsible marketing
-Protecting the environment
-Responsible customer service

34
Q

Benefits of Corporate Social responsibility

A

-Enhance business images & reputation
-Helps recruit strong candidates
-Improves employee motivation & productivity
-CSR is attractive to many stakeholders

Business Theme 3 and 4 (10 decks)

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