3.4 Influences On Business Decision

Question 1

What are long term decisions?

Answer 1

Long term decisions are likely to affect the long term mission and vision of the business over a period of time

Question 2

What are short term decisions?

Answer 2

Short term decisions are more likely to impact objectives and tactics over the next few years

Question 3

What is included in the short termination approach?

Answer 3

1. Maximise short term profits
2. Minimise R&D investment
3. Maximise returns to shareholders
4. Pursue rapid external rather than organic growth
5. Invest less in Human Resources
6. Prioritise short term supply contracts

Question 4

What is included in the long term approach?

Answer 4

1. Investment in R&D
2. Less emphasis on frequent financial reporting
3. Investment into recruitment and training
4. Meaningful and lasting relationships with suppliers

Question 5

What is evidence based decision making?

Answer 5

Evidence based decision making involves taking a systematic and facts based approach when determining objectives

Question 6

What is subjective decision making?

Answer 6

Subjective decision making is guided principally by the personal opinions and experience of key decision maker

Question 7

What is a company culture?

Answer 7

A company culture is the personality and character commonly referred to as the way things are done here

Question 8

What are the 4 types of company culture Charles handy identified?

Answer 8

1. Power culture
2. Role culture
3. Person culture
4. Task culture

Question 9

What is power culture?

Answer 9

Power culture is decision making carried out by one or a small number of powerful individuals usually at the top of the business

Question 10

What is role culture?

Answer 10

Role culture is where key decisions are made by those with specific job roles

Question 11

What is task culture?

Answer 11

Task culture is where decisions are made by teams made up of employees with specific skills

Question 12

What is person culture?

Answer 12

Person culture is where individuals with extensive experience and skills are loosely brought together

Question 13

What are the factors contributing to corporate culture?

Answer 13

Leadership style
Type of ownership
Human resource policies

Question 14

What are the difficulties in changing established corporate cultures?

Answer 14

1. Identifying contributing factors
2. Existence of sub cultures
3. Overcoming resistance to change

Question 15

What is an internal stakeholder?

Answer 15

Individuals or groups inside the business
Employees, etc

Question 16

What are external stakeholders?

Answer 16

Individuals outside of a businesss
Customers, etc

Question 17

What is a stakeholder approach?

Answer 17

A stakeholder approach focuses on interdependencies between stakeholder groups and take steps to ensure that the benefits and drawbacks of its operations are shared equally

Question 18

What is the shareholder approach?

Answer 18

Increased media scrutiny of business operations has meant that it has become good business practice to be socially responsible

Question 19

What are business ethic ?

Answer 19

Ethics relates to the rights or wrongs of making a strategic decision that are beyond legal requirements and in accordance with a businesses corporate responsibility principles

Question 20

What is corporate social responsibility?

Answer 20

Conducting business activity in an ethical way and balancing the interests of shareholders with those of the wider community

Question 21

What are the benefits of CSR?

Answer 21

1. Improve brand image and reputation
2. Attractive to many stakeholders
3. Can be profitable as it adds value for many stakeholders
4. May improve employee motivation and productivity
5. Recruit strong candidates for jobs
6. Help solve social problems