3.4 Influences on Decision Making

Question 1

Short termism

Answer 1

Quick financial reward- Profit and Sales
Management focus on pursuing growth in sales , increasing sales and driving costs down

Question 2

Causes of Short termism

Answer 2

PLC’s under pressure to show profit for shareholders- dividends
Benefits and perks to employers to meet sales target
Changes in leadership, merger or takeover

Question 3

Effects on business of Short termism

Answer 3

Doesn’t focus on building a sustainable competitive advantage
Reluctant to invest in business
Short term may not be best for long term

Question 4

Long termism

Answer 4

CSR
R+D have long term goals
Staff development is important
Most care for the business

Question 5

Culture

Answer 5

The norms and values of a business

Question 6

Strong business cultures

Answer 6

Good comm with employees
Recruitment and training tries to find individuals who fit the culture of the business
Based around owners/ founders

Question 7

Weak culture

Answer 7

Leads to business failure
Demotivated workforce
Inconsistent customer service
Poorly managed
Flexibility to respond to dynamic markets

Question 8

Power culture

Answer 8

Central figure that will make decisions
Few rules and procedures
There is a competitive attitude amongst employees to gain power

Question 9

Role culture

Answer 9

Decisions made through well established rules and procedures
Power to make decisions comes from job title
Bureaucratic culture and may involve lots of paperwork

Question 10

Task culture

Answer 10

Focus on a project to be completed
Power resides with those who can accomplish the task and have the expertise

Question 11

Person Culture

Answer 11

Grouping of similar skilled people to share expertise and knowledge
These all work on a client by client basis
E.g. lawyers

Question 12

Stakeholder

Answer 12

Anyone who has an interest in the business or who may be affected by the activities of the business

Question 13

Shareholder

Answer 13

Someone who owns shares in the business

Question 14

Business Ethics

Answer 14

The professional ethics that examine the principles and moral problems that they face

Question 15

Ethical trading policy

Answer 15

Commitment in an adequate budget
Checks to ensure all parts of supply chain are adhering to the policy
Communication to make sure every member of staff in on board with the ethical trading policy

Question 16

Corporate Social Responsibility

Answer 16

When companies integrate social and environmental concerns into their business operations and in their interaction with their stakeholders on a voluntary basis.

Question 17

Benefits of Good ethics

Answer 17

Invite ethical investment
Contracting benefits- motivate, train and recruit employees
Lower production costs- Packaging and energy