3.4 - Influences on Decisions

Question 1

Short termism

Answer 1

Business strategy that prioritises immediate financial gains, quick returns, and short-term performance over long-term growth and sustainability

Question 2

Advantages of short termism

Answer 2

1. Quick returns
2. Easier to secure funding
3. Flexibility

Question 3

Disadvantages of short termism

Answer 3

1. Employee and customer dissatisfaction
2. Can neglect innovation and sustainability
3. Reputation damage

Question 4

Long termism

Answer 4

Business strategy that prioritises sustained growth, innovation, and stakeholder value over immediate short-term gains. Companies that adopt long-termism focus on future success rather than quarterly profits

Question 5

Advantages of long termism

Answer 5

1. Better employee retention
2. Stronger competitive advantage
3. Financial stability

Question 6

Disadvantages of long termism

Answer 6

1. Slower profits
2. Investor pressure
3. Long-term plans can be disrupted by unforeseen economic changes

Question 7

Evidence based decision making

Answer 7

When business decisions are based on data, research and factual evidence

Question 8

Advantages of evidence based decision making

Answer 8

1. Minimises uncertainty by using proven facts
2. Decisions are based on actual customer needs improving customer satisfaction
3. Managers can justify their choices with evidence

Question 9

Disadvantages of evidence based decision making

Answer 9

1. Can be time consuming
2. Too much information can complicate decision making
3. Some decisions must be made quickly without sufficient evidence

Question 10

Subjective based decision making

Answer 10

When business decisions are based on personal opinions, experiences and intuition

Question 11

Advantages of subjective based decision making

Answer 11

1. Faster decision making
2. Useful for experienced managers who rely on past knowledge
3. Useful in unpredictable situations

Question 12

Disadvantages of subjective based decision making

Answer 12

1. Higher risk of bias
2. Less reliable as lacks factual backing
3. Difficult to justify to stakeholders

Question 13

Big data

Answer 13

Process of collecting and analysing large data sets from traditional and digital sources to identify trends and patterns that could be used in decision making

Question 14

Data mining

Answer 14

Process of analysing data from different perspectives and summarising it into useful information, including discovery of previously unknown interesting patterns, unusual records or dependencies

Question 15

Features of a strong culture

Answer 15

1. Clear mission and values
2. Strong communication and engaged employees
3. Recruitment and training aims to find individuals who best fit the culture of the business

Question 16

Features of a weak culture

Answer 16

1. Inconsistent customer service
2. Demotivated workforce
3. Poor leadership and management

Question 17

Handy’s four classes of culture

Answer 17

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

Question 18

Power culture

Answer 18

When power is concentrated amongst a few individuals, usually at the top of the organistion. These key decision makers control the business and employees follow their direction

Question 19

Advantages of power culture

Answer 19

1. Fast decision making
2. Clear direction
3. Strong leadership

Question 20

Disadvantages of power culture

Answer 20

1. Demotivating for employees as may feel powerless and disengaged
2. Lack of stability as if the leader leaves business can struggle
3. Can be autocratic

Question 21

Role culture

Answer 21

Structured and hierarchical business culture where power and responsibilities are defined by formal job roles and procedures. Relies on rules, job descriptions and clear chain of command

Question 22

Advantages of role culture

Answer 22

1. Defined roles ensure consistency in operations
2. Fair treatment as promotions and rewards are based on qualifications not favouritism
3. Works well in businesses that need strict organisation, such as banks and government offices

Question 23

Disadvantages of role culture

Answer 23

1. Lack of flexibility as employees may struggle to adapt to changes
2. Bureaucracy can delay important business decisions
3. Employees may feel restricted by rules reducing creativity and innovation

Question 24

Task culture

Answer 24

When teams are formed to complete specific tasks or projects. Power is distributed based on expertise rather than hierarchy and success is measured by results rather than job titles

Question 25

Advantages of task culture

Answer 25

1. Encourages innovation 2. Workers feel valued because their skills directly impact outcomes 3. Brings together experts from different areas to tackle issues efficiently

Question 26

Disadvantages of task culture

Answer 26

1. Teams form and disband frequently leading to uncertainty 2. Disagreements may arise between team members 3. Requires strong project management and skilled employees

Question 27

Person culture

Answer 27

When focus is on individuals rather than organisations as a whole. Employees have high autonomy and the organisation exists primarily to support them rather than having strict structures or hierarchies

Question 28

Advantages of person culture

Answer 28

1. High employee satisfaction as employees have control over their work and careers 2. Encourages creativity and expertise as individuals have freedom to innovate 3. Attracts skilled professionals due to the autonomy and freedom

Question 29

Disadvantages of person culture

Answer 29

1. Lack of direction meaning strategic goals may be unclear 2. Employees may prioritise their own goals over the company's 3. Person cultures don't work well in large organisations

Question 30

Reasons to change culture

Answer 30

1. Improve business performance 2. Respond to significant change

Question 31

Signs organisational culture may need changing

Answer 31

1. Internal fighting 2. Greater absenteeism 3. High levels of staff turnover

Question 32

Stakeholder

Answer 32

Any individual, group or organisation that has an interest in or is affected by a business' activities and decisions

Question 33

Potential conflicts between stakeholders

Answer 33

1. Cutting jobs to reduce costs, may be supported by shareholders but likely to be opposed by employees 2. Introduce new machinery to replace manual work, could be supported by customers and shareholders but likely to be opposed by employees 3. Increase selling price to improve profit margins, likely supported by shareholders but opposed by customers

Question 34

Ethics

Answer 34

Moral guidelines which govern acceptable behaviour

Question 35

Benefits of behaving ethically

Answer 35

1. Higher revenues from positive consumer support increasing demand 2. Improved brand awareness and recognition 3. Better employee motivation and recruitment

Question 36

Drawbacks of behaving ethically

Answer 36

1. Higher costs, such as sourcing from Fairtrade suppliers rather than lowest price 2. Higher overheads, such as training and communication of ethical policy 3. Danger of building up false expectations

Question 37

Amoral business

Answer 37

Seeks to win at all costs and anything is acceptable

Question 38

Legalistic business

Answer 38

Will obey the law but no more than that

Question 39

Responsive business

Answer 39

Accepts that being ethical can pay off

Question 40

Ethical business

Answer 40

Ethical practice is at the core of the business

Question 41

Pressure group

Answer 41

An organisation that seeks to influence business or government decisions without seeking political power. They campaign on specific issues such as the environment, worker's rights, or ethical business practices

Question 42

Corporate Social Responsibility

Answer 42

The extent to which a business addresses the concerns and obligations of its wider stakeholders

Question 43

Benefits of Corporate Social Responsibility

Answer 43

1. Improves brand image and customer loyalty 2. Attracts investors who support ethical businesses 3. Motivates employees and enhances workplace culture

Question 44

Drawbacks of Corporate Social Responsibility

Answer 44

1. Can be costly and reduce short-term profits 2. Some companies may use it for marketing without real action (greenwashing) 3. Difficult to measure the direct impact