3.4 Influences on Business Decisions Glossary

Question 1

Asset Stripping

Answer 1

The practice of buying businesses and breaking them up. The profitable parts are sold for cash and the rest are closed down.

Question 2

Evidence-Based Decision

Answer 2

An approach to decision making that involves gathering information and using a systematic and rational approach to reach a conclusion.

Question 3

Making

Answer 3

The time period where decisions have an impact on the vision, mission and objectives of a business-typically longer than five years.

Question 4

Long Term

Answer 4

The time period where decisions have an impact on the vision, mission and objectives of a business-typically longer than five years.

Question 5

Short Term

Answer 5

The time period where decisions only have an impact on the operations activities of a business-typically less than five years.

Question 6

Strategic Decisions

Answer 6

Decisions concerning policy that can have a long-term impact on a business. Can be risky.

Question 7

Subjective Decision Making

Answer 7

An approach to decision making where the personal opinions of the key decision maker strongly influence the course of action chosen.

Question 8

Cultural Dimensions

Answer 8

A set of characteristics that form the international context of business culture.

Question 9

Organisational, Organisation, Corporate or Business Culture

Answer 9

The values, attitudes, beliefs, meanings and norms that are shared by people and groups within an organisation.

Question 10

Strong Culture

Answer 10

A culture where the values, beliefs and ways of working are deeply embedded within the business and its employees.

Question 11

Weak Culture

Answer 11

Difficulties in identifying the factors that form the culture or where a wide range of sub-cultures exist making the culture difficult to define.

Question 12

Power Culture

Answer 12

One where there is a central source of power responsible for decision making

Question 13

Role Culture

Answer 13

Decisions are made through well-established rules and procedures, power is associated with a role rather than with an individual.

Question 14

Task Culture

Answer 14

Power is given to those who can accomplish tasks; power therefore lies within expertise rather than with a role.

Question 15

Person Culture

Answer 15

A culture where there are a number of individuals in the business who have expertise, but who don’t necessarily work together particularly closely.

Question 16

External Stakeholders

Answer 16

Groups outside a business with an interest in its activities.

Question 17

Internal Stakeholders

Answer 17

Groups inside a business with an interest in its activities.

Question 18

Shareholder Value

Answer 18

A measure of company performance that combines the size of dividends with the share price.

Question 19

Stakeholders

Answer 19

Those with an interest in the activities of a business.

Question 20

Corporate Social Responsibility (CSR)

Answer 20

A business assessing and taking responsibility for its effects on the environment and its impact on social welfare. It involves the idea that businesses bear a responsibility that stretches beyond their shareholders.

Question 21

Ethical codes of practice

Answer 21

Statements about how employees in a business should behave in particular circumstances where ethical issues arise.

Question 22

Ethics

Answer 22

In the context of business ethics, consideration of the moral and “rights and wrongs” of a decision at an often strategic level, in accordance with the law, and a business’s code of conduct in relationship to Corporate Social Responsibility.

Question 23

Living Wage

Answer 23

An hourly rate of pay based on the basic cost of living, set independently of government and updated annually.

Question 24

National Minimum Wage

Answer 24

The minimum pay per hour all workers are entitled to by law.

Question 25

Remuneration

Answer 25

The reward for work in the form of pay, salary or wages, including allowances and benefits, such as company cars, health insurance, pension bonuses and non-cash incentives.

Question 26

Sanctions or Trade Embargoes

Answer 26

Sanctions are restrictions imposed on trade or investment with the aim of influencing a policy change in another in another country. Trade embargoes can be included in sanctions, where commercial shipments are banned in and out of a particular country, or where an embargo is placed on a particular product.