3.4 Flashcards
What is Short-termism
Is a quick financial reward
-monthly profit
-weekly sales
Corporate timescales
Corporate timescales refer to strategy, and the expectation of when a return on investment will be achieved
Management is likely to focus on:
-pursuing growth in sales
-Increasing profit
-Driving unit cost down
-improving return on capital employment (ROCE)
What causes short-termsim
- Plc is often under pressure to produce dividends for the stakeholder
-Many benefits, perks and financial rewards in businesses are based on meetings, short-term goals e.g. Daily sales target
-there are any changes in leadership or strategy, maybe major or takeover, the management may want to put their own stamp on direction
Disadvantages of short-termism
- Doesn’t focus on building a sustainable competitive advantage, overtime
-Is reluctant to invest in the business e.g. Training, capacity, research and development
-A decision in short term may not be good for long-term
Advantage of short termism
-Good for immediate shareholders
-Good for immediate growth
What is long-termism
-Corporate timescale refers to strategy and the expectation of when it return on investment will be achieved
-Long-termism is a whole business approach
-incorporates corporate social responsibility
-Considers ethical behaviour of the business in decision-making
-Staff development is seen as a long-term objective of the business to retain and develop staff
-Long-term investment tech investment secure data for the future
-Showing care is important
What is evidence based decision-making?
-Decisions relating to the business are based on evidence and data, which is valid and trusted information. scientific in its approach. But can be time-consuming.
-evidence based approach, including:
Sales forecasting
Investment appraisal
Decision Tree
What is subjective decision-making
-decision relating to a business which are based on personal perspectives, feelings and opinions
Corporate culture
- A businesses culture and their beliefs can guide their practices. Corporate culture could even inform the mission statement or vision statement.
features of strong culture
-strong cultures have good communications with employees
-they focus on core value
-the recruitment/training tries to find individuals who best fit the culture of the bus
features of weak culture
-a weak culture often leads to bus failure
-it will have a demotivated workforce
-there will be inconsistent customer service
-it may be poorly managed
-it will be very bureaucratic and lack flexibility to respond to dynamic markets
Handy four classes of culture
-power culture
-role culture
-task culture
-person culture
Power culture
-in a power coach that is a central figure that will make decisions
-There are a few rules and procedures
-there is a competitive attitude among employees to gain power
Role culture
-decisions in a role culture are made through well established rules and procedures
-power to make decisions in a role culture comes from the job title e.g. Marketing director.
-This is very bureaucratic culture and may evolve lots of paperwork
Task culture
-in a task culture, the focus is on a project that needs to be completed
-The power in the task culture comes from those who can accomplish the tasks and have expertise e.g. car design
-this involves team on a project a team of expert working together
Person culture
-in a person culture that are grouping of similar skills, people who share experts and knowledge
-These all work on client by client basis, rather than project by project basis (task culture)
-e.g. Lawyers, accountant, doctors
how do you think culture is formed with a bus
-Rola found as an owners are key decision skills based around their ethics or influence
-The nature of business and its sells
-The degree to which products have changed overtime
-The business environment when it started
-The recruitment process of key staff
-Working hours
-attitude to customer service
Stakeholders
A party that has an interest in a company and can either affect or be affected by the bus
shareholders
a person, company, or institution that owns at least one share of a company stock
internal stakeholders
A group or individual within an organisation who have an interest in the bus
-employees
-managers
-owners
External stakeholders
Group/individuals outside an organisation who have an interest in the bus
-suppliers
-customers
-society
stakeholders vs the directors
-The directors as well as being responsible for the running of the business or responsible to the stakeholders and act on their behalf
-as such they sent the shareholders interest, this can lead to conflict
Bus ethics
The moral principles, polices, and values that govern the way bus and individuals engage in bus activity
Ethical trading policy
is a code of practice for a business:
-Commitment in terms of adequate budget
-Checks to ensure all parts of the supply chain are adhering to the policy
-Corrective action to make sure that when problems are identify, the actions has taken
-Communication to make sure that every member of staff is on board with the policy
